How long do YT negotiations last in a small company?

How long do YT negotiations last in a small company?

Significant changes to the application of the Act on Cooperation within Undertakings (Cooperation Act) will take effect on July 1, 2025. The legislative amendment will modify the requirements and timelines for cooperation negotiations, particularly in small companies.

Going forward, the Finnish Employees Cooperation Act will be fully applied only to companies and communities that regularly employ at least 50 employees. The previous threshold for application was 20 employees. Companies with 20–49 employees will be subject to the negotiation obligation only in limited cases, such as when the dismissal of at least 20 employees is planned.

A significant change is also the shortening of the minimum duration of change negotiations. After the legislative reform, the minimum durations will be halved from the current ones. Going forward, the minimum duration of change negotiations concerning workforce reductions will be either seven days or three weeks, depending on the situation (previously 14 days or six weeks).

The smallest companies, with fewer than 20 employees, still remain completely outside the scope of the Co-determination Act.

What factors affect the duration of M&A negotiations?

The duration of YT negotiations is essentially influenced by company size and the nature of negotiations. With the amendment coming into effect on January 7, 2025, the scope and timelines will be as follows:

• In companies with at least 50 employees, the Co-determination Act applies in full.
• In companies with 20-49 employees, the dialogue obligation applies, as well as, in limited situations, the change negotiation obligation.
• The co-determination act does not apply at all to companies with 20 employees.

The minimum duration for change negotiations concerning workforce reductions will henceforth be either seven days or three weeks, depending on the scope of the negotiations. These periods are half the current minimum durations, enabling companies to respond more quickly to changing situations.

As a new element, the time to be allocated for investigating labor services must be taken into account. If the change negotiations concern the termination of at least ten employees for production and economic reasons, the employment contracts of the terminated employees may not end until 30 days have passed since the negotiation proposal was submitted to the labor authority.

Is the duration of M&A negotiations different in small and large companies?

Yes, with the reform, the differences between small and large companies will widen even further. The aim of the legislative change is to reduce the administrative burden, especially for SMEs, and to improve companies' operating conditions.

Effective January 7, 2025, the scope of the Co-determination Act (YT-laki) is as follows:

• Companies with at least 50 employees: The Finnish Limited Liability Companies Act is fully applicable (excluding the provisions concerning employee representatives on the board of directors, which only apply to companies with 150 employees)
• Companies with 20-49 employees: The obligation for continuous dialogue shall apply, but with lighter procedural rules. Change negotiations shall only take place in limited situations, such as when the termination of at least 20 employees is planned.
• Companies with 1-19 employees: The YT law does not apply at all

In situations related to workforce reductions, the minimum duration of negotiations will hereafter be shorter: either seven days or three weeks (previously 14 days or six weeks). This will enable more agile operations, especially for smaller companies.

The changes emphasize the employer's responsibility, as all required matters must still be addressed properly within the shorter negotiation period.

How do YT negotiations proceed step-by-step in a small business?

Co-determination negotiations begin negotiating proposal with preparation and delivery. Even after the legislative reform, this practice will continue, but it should be noted that as of July 1, 2025, only companies of a certain size will be subject to the negotiation obligation:

• Companies with at least 50 employees in all situations covered by the Co-determination Act
• Companies with 20-49 employees only in limited situations, such as when at least 20 employees are planned to be laid off

If the change negotiations concern a reduction in the use of labor, the employer must also submit a negotiation proposal to the labor authority. This relates to the new 30-day deadline: in situations where at least ten employees are to be laid off, employment contracts may not terminate until 30 days have passed since the negotiation proposal was submitted to the labor authority.

The minimum duration of actual negotiations will be halved due to the legislative amendment. The minimum time for negotiations concerning workforce reductions will henceforth be either 7 days or 3 weeks, depending on the situation. It will be the employer's responsibility to ensure that all required matters are covered even in a shorter timeframe.

After negotiations conclude, the employer makes decisions and communicates them. It is important to note that if decisions concern the dismissal of at least ten employees, the new 30-day period reserved for workforce services must be taken into account.

How should an employer prepare for co-determination negotiations from a time management perspective?

With the legal changes coming into effect on 1.7.2025, it is even more important for employers to determine in advance how the Co-determination Act applies to their own company. Special attention should be paid to the limits related to the size of the company:

• If the company has at least 50 employees, the Co-determination Act applies in full.
• If a company has 20-49 employees, the Co-determination Act applies to a more limited extent.
• If a company has fewer than 20 employees, the Co-determination Act does not apply.

With the reform, the minimum duration of change negotiations will be halved, but employers must still ensure that all necessary matters are properly addressed. Good preparation becomes even more important when less time is available.

If layoffs of at least ten employees are planned, a new 30-day period for exploring labor services must be taken into account. This period begins when the negotiation proposal is submitted to the labor authority, and employment relationships may not end before this period has elapsed.

When planning schedules, please consider the following times:

• Preliminaries (1-2 weeks)
• Preparation and submission of a negotiation proposal (at least 5 days before the start of negotiations)
• Actual negotiations (at least 7 days or 3 weeks depending on the situation)
• A possible 30-day period for determining employment services
• Decision-making and communication

Can YT negotiations be sped up in a small business?

Legal changes that will come into effect on 1.7.2025 will already significantly speed up co-determination negotiations on their own. The minimum duration of negotiations will be halved from the current, meaning that in the future, negotiations concerning workforce reductions will last at least 7 days or 3 weeks instead of the previous 14 days or 6 weeks.

In addition, a significant change is that companies with 20-49 employees will only be subject to the negotiation obligation in limited situations, such as when 20 or more employees are planned to be laid off.

With the reform, it is even more important to prepare for negotiations carefully, as the same matters will need to be handled in a shorter time than before. Good preparation and clear documentation will help to utilize the shorter negotiation times effectively.

It should also be noted that there is a new 30-day deadline for exploring labor services in cases of redundancy affecting at least ten employees. This period cannot be expedited, as employment relationships may not end before this period has elapsed.

YT Negotiations Schedule – Key Considerations for Small Businesses

The reform of the Co-Operation Act on July 1, 2025, brings significant changes, especially for small and medium-sized enterprises. The changes concern the scope of the act, the duration of negotiations, and procedures.

Key changes by company size:

• All 20 employee companies: The YT law does not apply at all
• Companies with 20-49 employees: The obligation for continuous dialogue shall only apply under simplified procedures. Changes negotiations are only required in limited situations, such as when redundancies for at least 20 employees are planned.
• Companies with at least 50 employees: The YT Act is suitable in its entirety

Changes to meeting times:

• The minimum duration of change negotiations concerning workforce reductions is halved: henceforth either 7 days or 3 weeks (previously 14 days or 6 weeks).
• As a new regulation, in situations where at least ten employees are dismissed, employment relationships may not end until 30 days have passed since the submission of the negotiation proposal to the labor authority.

The goal of the reform is to reduce the administrative burden, especially for SMEs, and to improve companies' ability to respond to changing situations. At the same time, the employer's responsibility is emphasized, as all necessary matters must be handled properly in a shorter time.

Companies should familiarize themselves with upcoming changes well in advance of their effective date of July 1, 2025, and assess how they will impact their own policies and processes. Companies with 20-49 employees, whose obligations will undergo the most significant changes, should pay particular attention to monitoring these developments.