Employee representation at the workplace is primarily provided by the union representatives, or elected representative if there are no union representatives, rather than through statutory structures. Legislation gives union representatives the right to be involved in so-called “cooperation negotiations” in companies and other organisations with 20 or more employees. (The employment threshold was reduced from 30 in 2007.)
Workplace representation in Finland is essentially provided through the trade unions, with their high levels of membership. The workplace union representative together with his or her colleagues has the information and consultation rights, which in countries like Germany or Austria are exercised by works council members.
Trade union representatives are appointed on the basis of legally binding collective agreements signed between the employers and unions at national level rather than through specific laws. The first agreement specifically on union representation at the workplace was signed in 1969, and in 1970 legislation was adopted which included special protection for trade union representatives.
In 1978 a further key piece of legislation, the Act on Cooperation within Undertakings, was passed. This Act, including later amendments, provided a framework that gave union representatives information, consultation and, in some cases, co-decision making rights in companies employing 30 people or more (now 20, see below).
In the years that followed, there was criticism from the unions that in some cases the information and consultation rights provided by the Act on Cooperation were more formal than real and were often limited only to information about cuts in employee numbers. In 2003, therefore, the government agreed to reform the legislation, setting up a working party, with representatives of the unions, employers and government to do so.
This process produced a new Act on Cooperation within Undertakings, which came into force in July 2007 and completely replaced the previous legislation. As well as reducing the employment threshold before the law applies from 30 to 20 employees (from January 2008), it also aimed to set out more clearly the employer’s obligation to negotiate with the workforce before taking any decision which might affect employees, either directly or indirectly.
In 2019, the Act on Cooperation was again reviewed, with a working group producing an interim report on possible changes in June. The report from the working group, in which the unions were involved, found that the regulations were too complicated and focussed on formalities rather than genuine cooperation. Less formal procedures were therefore proposed, although it is likely that there will continue to be more precise rules where changes having a significant impact on the workforce, such as redundancies are being planned. It is intended that the government will come forward with proposals for new legislation in 2020.
Even under the current legislation, there is no requirement to set up a specific structure, or that employees should choose specific individuals for cooperation negotiations. In most cases the employee representatives involved in cooperation negotiations will be the existing union representatives. However, where a majority of employees are not entitled to participate in the election of a union representative (because they are either not covered by a collective agreement or are not union members), they can, if a majority of this group wish to do so, elect their own representative, for a period of two years. (They can also do this if they have chosen not to elect a union representative, even if they have a right to do so.) If there are no representatives, the employer can deal with all the employees.
In addition, under separate health and safety legislation, safety representatives must be elected when a workplace has 10 or more employees.
Figures from Eurofound’s 2013 European Company Survey show that 70% of establishments in Finland with at least 10 employees have some form of official employee representation. In most cases this will be through the unions at the company, but in some cases it will be the individuals involved in cooperation negotiations. The Finnish figure is more than double the EU28 average of 32%. As elsewhere in Europe, larger organisations are much more likely to have such a structure than smaller ones. The survey shows all establishments with more than 250 employees having representation, and 95% of those with between 50 and 249 employees. However even in smaller workplaces in Finland, those with between 10 and 49 employees, two thirds (68%) have employee representation.
Numbers and structure
The basic framework for the appointment of union representatives is set out in the national agreements. Each workplace has a senior trade union representative, who plays a crucial role, with additional trade union representatives for different departments and groups of employees. The exact numbers are fixed by agreement at either industry or company level. Because of the structure of the Finnish trade union movement there are normally separate unions representing the various groups of employees (manual workers, non-manual staff and more senior employees) and they usually have their own representatives.
All private companies which have 20 or more employees are covered by the 2007 Act on Cooperation within Undertakings, although some of the terms of the Act do not apply to organisations with between 20 and 29 employees. This threshold is calculated as an average of the previous two years, includingboth part-time and temporary employees.
As well as reducing the employment threshold, the 2007 Act also extended the coverage to non-commercial bodies such as foundations. The central government and public services provided by local government are not covered.
The Act states that there should be cooperation between the employer and the employees of the organisation, through “cooperation negotiations”. These take place between the employer and either the individual employee or, if several employees are involved, the representative of the group of employees concerned.
There is no requirement to set up a specific structure, or that employees should choose specific individuals for cooperation negotiations. In most cases the employee representatives involved in cooperation negotiations will be the existing union representatives. However, where a majority of employees are not entitled to participate in the election of a union representative (because they are either not covered by a collective agreement or are not union members), they can, if a majority of this group wish to do so, elect their own representative, for a period of two years. (They can also do this if they have chosen not to elect a union representative, even if they have a right to do so.) If there are no representatives, the employer can deal with all the employees.
If the issues to be discussed relate to more than one group of employees, there should be a joint meeting between the employer and the representatives of all the groups of employees involved. This procedure –dealing with issues at a joint meeting with representatives of all employee groups – can also be adopted for all matters, whether or not they relate to several groups of employees, but only if all those concerned have agreed to this. If the employer and the representative of the employee group choose to do so, they can set up a more permanent cooperation committee composed of representatives of the employees and the employer. Both sides must agree on its composition in a separate agreement, which generally has a six month notice period. However, it should be emphasised that cooperation committees are not obligatory.
Tasks and rights
Trade union representatives at the workplace both represent the interests of the union and its members to the employer and represent the union to its members. Specifically they ensure that the employer observes the terms of the appropriate collective agreements and can also be involved in negotiating new ones. At the same time, they must ensure that union members observe the collective agreements that bind them, as the union would be held responsible for any infringement of their terms.
Local trade union representatives also normally exercise the rights provided in the Act on Cooperation within Undertakings (334/2007). As already noted, this is very flexible in terms of the mechanism for cooperation. However, it is much more specific on the issues covered. Depending on the topic, employee representatives have a right to information, consultation – through involvement in cooperation negotiations – and, in some limited cases, they take the decisions, although within budgets set by the employer.
Employee representatives have a right to regular information on the financial position of the business/organisation. This includes the annual accounts, as presented to the appropriate authorities plus, at least once a year, a comprehensive report on the organisation’s financial position, including its prospects, employment, profitability and cost structure. If the employee representatives request it, the information on future prospects should be presented to all employees, and in companies with between 20 and 29 employees the whole report should be presented to the complete workforce. The employer should also give employee representatives statistical data on pay, including information broken down by occupational groups, and information on the numbers employed on a part-time and fixed-term basis, if requested. The employer should also present an annual report on the basis of which external labour, such as sub-contractors, is to be used, including details of where they are to be employed and for how long. Employee representatives also have a right to ask questions on the information they have received and the employer should respond “within a reasonable time”.
More specifically in the area of employment, the cooperation negotiations should cover:
- the use of temporary agency workers;,
- internal communications,; and
- other issues arising from other legislation, such as equality and alcohol and drugs policies.
On recruitment, the cooperation negotiations should cover the general principles and methods used in recruitment as well as the information to be provided to the new employee and expected from him or her. (This only applies in organisations employing 30 people or more.)
On training, the employer must draw up an annual plan in the cooperation negotiations covering personnel and training objectives. This should include information on the number of people employed and their level of development,, the principles behind the use of various forms of employment, an assessment of employees’ occupational skills, annual training objectives and the procedures to be used to implement the plan..
On the use of temporary agency workers, the employer should inform the employee representatives of those groups whose work would be affected by the use of agency staff and, if they object, the agency staff should not be taken on, until the cooperation negotiations have been concluded. (This delay does not apply to organisations employing fewer than 30 employees, where the work is urgent and short-term or where the permanent employees do not normally do the work which is to be given to agency workers.)
In organisations with 30 or more employees, there should also be cooperation negotiations on the methods to be used for internal communications.
and the following specific items: Other issues arising from other legislation – equality plans, drug and alcohol policies (including the use of drug testing), the use of surveillance equipment, rules on the use of e-mail, and setting up and ending profit bonus systems and personnel funds – should also be dealt with through cooperation negotiations (although only in organisations employing 30 or more)equality plans, drug and alcohol policies (including the use of drug testing), the use of surveillance equipment, rules on the use of e-mail, and setting up and ending profit bonus systems and personnel funds.
On all these employment issues, the cooperation negotiations should adopt the following format. The employer should take the initiative in informing the employee representatives about the issues “in good time” before the negotiations start, although the employee representatives can also ask for a particular issue to be raised. (The employer must either do this or provide a written report setting out why this is not necessary.) The employer should provide the information “necessary for handling the matter”, and, once an issue is being discussed, it should be dealt with “in the spirit of cooperation with the representatives of the personnel groups concerned in order to obtain consensus”. This should occur before any decision is taken. The result of the negotiations should be set out in the minutes of the meeting and the employer should either inform the employee representatives or the whole workforce as to what has been decided.
The legislation makes clear that there is no requirement for agreement to be reached on these issues and that the employer has fulfilled his or her obligations when the issue has been discussed in a spirit of cooperation based on information provided in good time.
Similar arrangements apply when employees are affected by changes in the way the business operates or organises its work. These changes include closures or relocation, purchase of machinery and equipment, changes in the products or services offered, other work changes or the use of external labour. The impact of these changes could be alterations in duties, working methods, working premises, as well as changes in working time or breaks. (Changes which involve cuts in staff numbers are dealt with under a different procedure.) In all these cases the employer should present the issue to employee representatives in good time and with adequate information and should discuss the issue in cooperation negotiations “in the spirit of cooperation to obtain consensus”. However, as with the employment issues listed above, there is no obligation to reach an agreement. Transfers and mergers are dealt with in the same way (except where jobs will be lost), although here both the organisation from which the employees are being transferred and the organisation to which they are going must provide information.
Where changes or transfers involve the loss of jobs, long-term lay-offs or a switch from full-time to part-time, the procedure is slightly different. The employer must provide information to employee representatives at least five days before the start of the cooperation negotiations (unless the collective agreement provides otherwise). The information should cover the reasons for the measures, an initial estimate of their extent (for example, the number of jobs to be lost), the method the employer proposes to use to select the employees affected, and a timetable for implementation. However, the employer is also required to provide employee representatives with a plan of action to promote employment, which should be drawn up with the public authorities, and the cooperation negotiations have to consider ways of limiting the numbers affected and mitigating the consequences for those who lose their jobs. The time scale is also spelled out more clearly where jobs are threatened. Where 10 or more jobs are to go, the cooperation negotiations must last six weeks (two weeks if fewer than 10 employees are to lose their jobs or the organisation only employs between 20 and 29 employees). At the end of the negotiations, which must be conducted in a “spirit of cooperation to obtain consensus” the decision remains with the employer.
There are, however, some areas where different rules apply, as they are seen as areas where agreement should be reached between the employer and the employee representatives if at all possible. These are:
- the amount and content of cooperation training to be provided;
- work rules – such as informing about absences, and the disciplinary code (only where 30 or more are employed);
- rules on suggestion schemes (30 or more employees);
- rules on the allocation of company accommodation (30 or more employees);
- the use of rooms for staff (canteens or workplace childcare facilities); and
- the use of funds allocated to recreational activities, such as sports clubs or cultural groups.
If no agreement can be reached, some issues are left to the employer to decide and some to the employee representatives. The employer is able to decide specific matters within the working rules, the rules of any suggestion scheme and the principles for the allocation of company accommodation. However, the employer has no right to confirm the working rules as a whole, and the employee representatives decide on the content of cooperation training, the actual allocation of company accommodation, the use of rooms for staff and the principles for the allocation of funds for recreational activities. (This decision-making power is limited by the fact that it is the employers who decide on the amount of money to be provided in these areas.)
Election and term of office
The trade union representatives are normally elected by union members in the workplace and their status as representatives is then confirmed by the local trade union organisation. The term of office is set by collective agreement.
Employee representatives, for the purposes of the Act on Cooperation within Undertakings, are normally the union representatives, although they may be the elected safety representatives, if the issue under discussion concerns health and safety. It is important to emphasise that there is no requirement to set up a specific structure, or that employees should choose specific individuals for cooperation negotiations. However, where there are no union representatives, or where non-union employees are in the majority in a particular group of workers, that group can elect someone to represent them for a period of two years. There are no specific rules in the legislation setting out any conditions for candidates or precise election procedures. The Act on Cooperation within Undertakings simply states that,“The election or other procedure for choosing the representative shall be so organised that all employees belonging to the aforesaid majority [the non-union employees] have anopportunity to take part in the election of the cooperation representative”.
Protection against dismissal
Trade union representatives and any other employee representatives can normally only be dismissed in cases of misconduct if a majority of the workers they represent agrees to their dismissal (Employment Contracts Act (Chapter 7, Section 10)). They can also be dismissed if the type of work they do no longer exists, for example because of a reduction in the demand for the work or because the employer is bankrupt. However, here dismissal is only lawful if their work ceases completely and no other suitable work is available.
The same protections apply to a non-union employee chosen as a representative in a non-union area to take part in cooperation negotiations under the Act on Cooperation within Undertakings.
Time-off and other resources
Trade union representatives have the right to sufficient paid time-off to undertake their duties. This is specified in collective agreements and in larger workplaces both the senior trade union representative and the elected safety representative may be fully released from their normal work.
The employer should by law provide a room for meetings during rest periods and outside working time and collective agreements often improve on this. Again in larger workplaces the senior trade union representative will have an office.
Employee representatives as specified in the Act on Cooperation (in practice these are normally union representatives) have a right to paid time-off from work to carry out their duties as employee representatives, as well as for cooperation training, although the time of the cooperation training has to be agreed with the employer. In addition they representatives. They also have the right to use experts, although these experts should normally be from within the organisation. They are given paid time off to prepare their expert advice.
Training rights for trade union members and representatives depend on agreements reached between the union and the employers. However, a number of trade unions and employers' federations agree an annual list of the courses for which participants can are paid compensation for loss of earnings during the course and where the meal costs of the training provider are reimbursed. The precise arrangements vary from industry to industry.
Employee representatives as specified in the Act on Cooperation, who, as already noted,are normally union representatives, have a legal right to paid time-off from work for cooperation training, although the time of the cooperation training has to be agreed with the employer.
Representation at group level
There is also a right to employee representation at group level in companies with 500 or more employees in Finland, and these rights have been strengthened by new legislation (Act on Finnish and Community-wide Groups of Undertakings) which came into force in 2007. The standard arrangements allow each company within the group with at least 20 employees to choose an employee representative to take part in the cooperation procedure at group level. The choice of employee representatives should ensure that there is at least one representative from each of the employee groups in the company (manual, non-manual and more senior staff).
However, under the standard rules, the cooperation procedure at group level is essentially limited to the provision of information. At group level the employer should provide:
- a comprehensive report on the financial position of the group;
- information on the groups prospects in terms of production, employment, profitability and cost structure, as well as likely changes in employment and the need for specific skills;
- plans for expansion, reduction or closure of any parts of the group's operations; and
- information on planned changes in product ranges or services, which might affect employees.
The information should be provided in such a way as to enable the cooperation negotiations at lower level (in individual companies) to function effectively.
Instead of these standard rules, the employee representatives and the group can, if they wish, agree other arrangements for cooperation at group level, covering both the choice of the employee representatives and the content and procedures for cooperation.
Eurofound (2015), Third European Company Survey – Overview report: Workplace practices – Patterns, performance and well-being, Figures for Table 44