Legal Alerts/18 Jun 2025
Major Changes to the Finnish Consultation Legislation Entering Into Force
The Finnish government has approved significant amendments to labour legislation as part of its efforts to reduce employment barriers and strengthen the operational conditions of small and medium-sized employers. These changes will particularly impact the Finnish Co-operation Act and the consultation obligations of employers. The changes to the Co-operation Act will enter into force on 1 July 2025.
New scope of application of the Co-operation Act
One of the most notable amendments to the Co-operation Act is the change in the scope of application of the Act from employers employing at least 20 employees to employers employing at least 50 employees. This means that, generally, employers with 20–49 employees will be exempt from the full application of the Co-operation Act and, e.g., consultation processes (change negotiations).
Obligations for employers with 20–49 employees
Although the scope of application of the Co-operation Act changes, some obligations of the Act remain in place for employers with 20–49 employees. These obligations include:
- A reduced obligation to engage in a continuous dialogue. Employers must establish documented workplace practices for regular continuous dialogues. The practices, and any subsequent changes, must be recorded and communicated to all employees.
- An obligation to carry out consultation processes in certain situations. Employers will have full consultation obligations if they plan to carry out reduction measures affecting at least 20 employees within a 90-day period. These measures include terminations, lay-offs based on termination grounds, reductions of working hours, or unilateral changes to material terms of employment.
- Unchanged obligations concerning transfers of business, mergers and divisions.
Reduced minimum consultation periods for consultation processes
The amendments to the Co-operation Act will also entail reduced minimum consultation periods. The general minimum consultation period will be reduced from six weeks to three weeks, while the shorter minimum consultation period will be reduced from 14 days to seven days.
Although the consultation process generally should last for at least three weeks, a seven-day consultation period applies when:
- The consultations concern the termination, lay-off, reduction of working hours, or unilateral change of material terms of employment affecting fewer than ten employees,
- The consultations concern lay-offs lasting no more than 90 days,
- The employer regularly employs fewer than 50 employees, or
- The employer is subject to restructuring proceedings.
However, it is vital to note that despite these reduced consultation periods, there will be no changes to the mandatory contents of the consultation process.
New provision on the time to be reserved for assessing employment services
A new provision introduces a mandatory 30-day period for employment service assessment when an employer issues a consultation proposal concerning the termination of at least ten employees on financial and production-related grounds. Under this new provision, the employment agreement of a terminated employee cannot expire before 30 days have passed from the date of delivery of the consultation proposal to the employment officials.
To keep in mind
With the Co-operation Act changing, there are several important matters for employers to keep in mind.
- Consultations initiated before the legislative changes enter into force will be conducted in accordance with the currently valid Co-operation Act.
- If grounds for consultations arise before the amendments to the Co-operation Act enter into force on 1 July 2025, the consultations should also be initiated before 1 July 2025 (if it is possible in terms of timing).
- The consultation obligation must still be fulfilled, even during shorter consultations.
- The different collective agreements can still contain consultation periods differing from the periods of the amended legislation.
If you have any questions concerning the amendments to the Co-operation Act, please contact the undersigned or other members of our Employment team.
