Personnel involvement systems

The personnel involvement systems provide the personnel with the opportunity to participate in decision-making regarding the company.

Cooperation within undertakings

The purpose of cooperation within undertakings is to develop the business operations and working conditions. Cooperation covers informing and consulting the personnel. When employees are consulted, their possibility to exercise influence is increased. Cooperation within businesses is governed by the Act on Co-operation within Undertakings (Act on Co-operation).

Before employers take any decisions on issues influencing the status and working conditions of the personnel, they must negotiate such issues, including their reasons, effects and possible alternatives, with the employees concerned. Employers must also regularly inform their personnel of certain key issues related to the operations of the company.

The parties to such cooperation are the employer and employees´ representatives. In community-wide group the personnel can be represented by European works council.

Personnel representation in the administration of undertakings

The Act on Personnel Representation in the Administration of Undertakings gives the personnel the right to participate in the handling of matters that involve the business of the company and the position of the personnel. This enables the efficient utilisation of the personnel’s expertise in decision-making regarding the company. The purpose of personnel representation is also to secure the competitiveness of the company.

Personnel representation can be arranged on the basis of agreements or in accordance with legal provisions. The representation is implemented as personnel representatives’ membership in the supervisory board, the board of directors or management groups. The personnel representatives basically have the same rights, duties and responsibilities as the members elected by the company to the administrative body. They do not, however, have the right to participate in the handling of matters that concern the election, dismissal and contract terms of the management or the personnel’s terms of employment or industrial actions.

Personnel representation must be organised in all limited liability companies, cooperatives and other economic societies, insurance companies, commercial banks, cooperative banks and savings banks that have a regular personnel of at least 150 working in Finland.

Personnel funds

Personnel funds refer to funds owned and controlled by the personnel of a company, a civil service department or a municipality with the purpose of managing merit pay and the profit bonus items paid to it by the company, a civil service department or a municipality and any other assets covered by the Act on Personnel Funds. The members of a personnel fund comprise the entire personnel. The activities are regulated by the Act on Personnel Funds which came into force in the beginning of 2011.

A personnel fund may be established in a company, a civil service department or a municipality which employs at least ten people. A fund may also be established in a profit centre in a company, a civil service department or a municipality if the profit centre has at least ten employees. A joint personnel fund may only be established for two or more companies if they belong to the same group of companies.

Every member of the fund has his own fund unit. Every year 15 % from this unit is passed on the part which the member is allowed to draw out.

Employee involvement in European companies and cooperatives

A European company or cooperative is a new type of company enabling business operations everywhere within the European Union under the name of one company or cooperative. The Act on Employee Involvement in European Companies (SE) and European Cooperative Societies (SCE) provides for the national implementation of the directives with regard to the involvement of employees. Employee involvement means a mechanism through which employees’ representatives can influence decisions to be taken within the company.

A special negotiating body representing the employees must be formed within the European company or cooperative for the purpose of negotiating on arrangements for employee involvement. The purpose of the body is to negotiate an agreement on employee involvement. If such agreement is not reached by the deadline set, or if the parties so agree, the standard rules provided by the Act apply to employee involvement.

Compliance with all of the above acts is supervised by the Cooperation Ombudsman in conjunction with the Ministry of Employment and the Economy. The Act on Co-operation is also supervised by the labour market organisations.