Weaker employment security for smaller companies



In smaller enterprises, employment security is on the wane. The Orpo-Purra Government is abolishing the obligations set out in the act on Co-operation within Undertakings for companies with less than 50 employees. This means that a greater number of employees will end up without the built-in security guaranteed under this law.

One of the expressed goals of the right-wing Government is to improve the prerequisites for the operation of small and medium-size undertakings. Paradoxically, the new legislation might have the opposite impact.

Jenniveera Tabell, a lawyer for the Industrial Union, says in an interview for this magazine (in Finnish, see page 8), that the situation of smaller companies will not improve for the better due to the new legislation. On the contrary, in some cases it might even turn out worse if employees looking for better employment security opt to work for bigger companies.

Right now, the act on Co-operation within Undertakings stipulates that it should be applied in companies with at least 20 employees. The Orpo-Purra government is raising the limit to at least 50 employees.

The treatment of employees would be based on the employer’s kindness and own volition.

Such a big rise would mean that given the changing situations affecting a company at any given time a large number of employees would be left outside some of the legal rules protecting employees, she says.

– Thus, the treatment of employees would be based on the employer’s kindness and own volition, Tabell says.

In Finland, according to the figures of 2022 by Statistics Finland, there are 550,000 companies with less than 20 employees. However, these figures include 185,000 self-employed, who seldom employ other people.

Currently, there are hundreds of thousands of employees outside the rules stipulated in the Co-operation Act. If by raising the level of required employees to 50, according to Statistics Finland, some 200,000 employees more will slip out of the regulations set under current law.


Law demands negotiations

The act on Co-operation within Undertakings stipulates the employer must give relevant information to employees. It regulates obligatory cooperation negotiations with employees in any situation where their position or work will undergo changes, like redundancies.

The law states when the employer must begin negotiations, how to proceed and for how long the negotiations must take.

The employer must follow the law carefully and employees shall be heard. If this does not happen, the law includes sanctions for employers. Without obligatory negotiations, the employer can quite freely present motivations for changes and redundancies as employees do not have the relevant information concerning the company’s true financial situation.

The Orpo-Purra Government will also scrap the duty to re-engage dismissed workers in businesses with fewer than 50 employees. The duty applies when an employee has previously been made redundant for reasons related to company economy or production.

If the employer needs inside 4 months an employee for the same or similar tasks to those of the redundant employee, the work must first be offered to the redundant employee. He or she has no obligation to take the job. But, in case of a missing job offer, the employee might have the right to compensation.