Finland Raises Co‑operation Act Thresholds and Streamlines Processes
Effective July 1, 2025, Finland's updated Co‑operation Act raises the employee threshold and shortens procedures for workplace change negotiations, easing compliance for SMEs while protecting worker rights.
🗓️ Effective: July 1, 2025From 1 July 2025, Finland’s Co-operation Act reform raises the full application threshold from 20 employees to 50 employees and shortens the minimum duration of change negotiations. Employers with 20–49 employees are no longer generally subject to the full Act, but they still have certain obligations, including lighter continuous dialogue and change negotiations in specific larger workforce reduction situations.
What Changed on 1 July 2025?
The reform is intended to reduce the administrative burden on smaller employers while allowing companies to respond faster to operational changes. For employers, the most important changes are the higher application threshold, the lighter obligations for employers with 20–49 employees, and shorter minimum change negotiation periods.
| Employer size | Position after the reform | Practical action |
|---|---|---|
| Fewer than 20 employees | Generally outside the Co-operation Act scope | Still follow general employment, consultation and documentation good practices. |
| 20–49 employees | Full Act no longer generally applies, but certain obligations remain | Maintain lighter continuous dialogue and check whether planned workforce reductions trigger change negotiations. |
| 50 or more employees | Full Co-operation Act applies | Maintain full dialogue practices and run change negotiations when required. |
What Employers With 20–49 Employees Still Need to Do
The reform does not mean that employers with 20–49 employees can ignore employee dialogue altogether. These employers should maintain workplace-specific practices for regular dialogue and review whether change negotiations are required when planning significant workforce reductions.
- Keep a documented practice for regular dialogue with employees or representatives.
- Check whether planned dismissals, layoffs, part-time arrangements, or unilateral material changes affect at least 20 employees within a 90-day period.
- Review whether the measure is based on financial or production-related grounds.
- Do not assume that all restructuring actions are exempt just because the company has fewer than 50 employees.
- Document the business rationale, employee impact and communication process.
Change Negotiations After the Reform
The 2025 reform shortens the minimum duration of change negotiations. For employers, this can make restructuring timelines more predictable, but it also increases the importance of preparation. Before starting negotiations, employers should prepare the business rationale, affected roles, proposed timeline, alternatives considered, and employee communication materials.
| Before the reform | After the reform | Employer planning point |
|---|---|---|
| Minimum periods could be six weeks or 14 days | Minimum periods may be three weeks or seven days | Prepare documents earlier because the negotiation window may be shorter. |
| Full Act generally applied from 20 employees | Full Act generally applies from 50 employees | Classify the Finnish workforce size before planning restructuring. |
| Smaller employers faced heavier formal requirements | 20–49 employers have lighter but not zero obligations | Maintain continuous dialogue and check special triggers. |
Employer Checklist Before Workforce Changes in Finland
- Confirm the regular employee headcount in Finland.
- Identify whether the company falls below 20, between 20–49, or at least 50 employees.
- Confirm whether the planned action is dismissal, layoff, part-time reduction, or unilateral material change.
- Count how many employees may be affected within a 90-day period.
- Prepare business reasons and alternatives before consultation begins.
- Check whether employee representatives must be involved.
- Keep written records of notices, meeting materials, discussions, and final decisions.
- Align termination, payroll, final pay, accrued leave, and statutory notice obligations.
What Global Employers Should Do
Global employers with Finnish employees should review local headcount before any restructuring, reduction in force, layoff, or material employment change. The reform may reduce procedural burden for smaller employers, but it does not remove the need for careful documentation, employee communication, payroll planning, and local legal review.
Companies hiring in Finland without a large local HR team should review whether payroll outsourcing, local HR compliance support, or an Employer of Record structure is appropriate for their workforce model.