What are change negotiations?

Change negotiations are statutory co-determination negotiations that employers are obliged to conduct with personnel before significant changes. They are part of the Co-determination Act and concern situations where dismissals or other substantial changes in operations are being considered. Change negotiations protect employees' rights and ensure that all parties are heard in the decision-making process.

What are change negotiations and when are they needed?

Change negotiations are negotiations in accordance with the Co-operation Act, which are conducted before significant personnel changes. The duty to negotiate arises, when an employer considers dismissing at least 10 employees for production and economic reasons. From July 2025, the threshold for applying the act on co-determination will rise to 50 employees, but companies with 20–49 employees will retain certain negotiation obligations.

Changes negotiations differ from ordinary co-determination negotiations in that they focus specifically on staff reductions or organizational changes. Negotiations must also be conducted in cases of business transfer, mergers, and demergers, regardless of the company's size. The employer must also provide the negotiation proposal to the labor authority so that it can prepare for the organization of unemployment security services.

With the reform, a 30-day timeframe will come into effect: employment contracts of laid-off employees may not expire before 30 days have passed since the submission of a negotiation proposal to the labor authority. Skilled HR support during change negotiations ensure the legality and smooth flow of the process.

In practice, how does the change negotiation process proceed?

The change negotiation process begins with the employer's initiative when a need for change has been identified. Negotiations must begin without delay after the decision to commence negotiations has been made. The employer must submit a written negotiation proposal to the personnel and the shop stewards, as well as to the employment authority.

The duration of negotiations depends on the number of employees being laid off. For layoffs of at least 10 but fewer than 100 employees, the negotiation period is 14 days, and for cases involving more than 100 employees, it is 90 days. With the reform, negotiation periods have been shortened, but the employer is still obligated to ensure that all required matters can be addressed within the timeframe.

During negotiations, the reasons for the change, alternatives to dismissals, the criteria for selecting those to be dismissed, and opportunities for redeployment of employees must be addressed. All negotiations must be carefully documented. Proper handling of the process often requires external expertise, which is why many companies utilize professional HR consulting to carry out the process.

What can be the consequences of neglecting change negotiations?

Failure to conduct or incorrectly implementing change negotiations will lead to serious legal and financial consequences. The employee has the right to demand compensation, if the duty to negotiate has not been properly observed. Compensation may be 3-24 months' salary depending on the severity of the breach and the employee's position.

Incorrectly implemented dismissals can lead to the employee returning to work, with the employer having to pay lost wages. Additionally, the employer may have to pay damages and legal costs. The Labor Court can order significant compensation if the process has been handled inadequately.

Main hazards can be long-lasting and affect a company's ability to recruit skilled employees in the future. Poorly managed change negotiations can also weaken the work atmosphere and the motivation of remaining employees. Therefore, it is important to ensure the proper execution of the process with the help of professionals.

Change negotiations are a complex process that requires in-depth knowledge of the law and careful planning. When implemented correctly, they protect the rights of both employers and employees during difficult changes. Professional support in carrying out the process is often essential to minimize legal risks and ensure a smooth transition.

Do you need help with change negotiations?

Change negotiations are a legally demanding process where mistakes can be costly. If your company needs professional support in planning and implementing change negotiations, we offer comprehensive Services the entire process. Contact us and let's discuss how we can help your company during this transition.