We have experience in executing and documenting many co-operation negotiations relating to organizational changes and personnel reductions. We recommend that you prepare the overall process carefully: this will minimize the financial and business continuity risks. A well-managed co-operation procedure benefits both the dismissed employees, the employer and the employees remaining in the organization.
When should change negotiations take place?
The employer shall commence change negotiations if it is possible that the decisions made after the negotiations may lead to, for example, t dismissals of one or more employees or to a unilaterally executed amendment of a substantial term and condition in one's employment agreement. The employer must have a sufficiently concrete plan with its grounds and effects, including an assessment of the need for redundancies, but thefinal decision on, for example, the closure of the unit or an organizational change leading to personnel reductions can only be made after the change negotiations have been concluded. Thus, no action should be taken that suggests that a final decision leading to an impact on the personnel has been made before the end of the change negotiations (e.g., termination of office leases, announcement of a new organization, interview statements, internal communication). At this stage, attention should also be paid to recruitments.
We help define the rationale for change negotiations and their scope. The criteria are either production (changes in operations or organization), economic (operating losses and the pursuit of real savings) and / or reasons for restructuring (change of business concept or subcontracting).
What is the content of the negotiation proposal and how long will the change negotiations last?
Once the plan has been refined to the extent that the impact on personnel can be assessed, we will assist in drafting the invitation and the negotiation proposal, as well as other documents for change negotiations, such as an employment action plan or policy.
The invitation and the negotiation proposal shall specify 1) the time and place of the negotiations; 2) representatives of employees and the employer; (3) outline the case and provide details, such as: (a) the reasons for the considered measures; (b) a preliminary estimate of the number of redundancies, layoffs, part-time work and / or unilateral amendments to the substantial terms and conditions of one's employment agreement; (c) an explanation of the principles governing the employees to be made redundant, laid off or part-time, for example; and (d) an estimate of the time within which redundancies, layoffs, and / or changes to a substantial term and condition of the employment agreement shall be executed. The employer must submit a written proposal for negotiations at least five calendar days before the commencement of the change negotiations.
We also assist in drafting the minutes for the change negotiations. Although there is no absolute obligation under the Co-operation Act to record the change negotiations as it is based on the employee's request, we recommend that the dates of each change negotiation, the participants, issues discussed, decisions made, and the potential dissenting opinions shall be recorded in the minutes. The protocol will play a key role in the subsequent assessment of the content of the change negotiations and the fulfillment of the obligation to negotiate under the Co-operation Act.
The minimum negotiation period is either 14 days or six weeks, depending on the number of employees to be dismissed, laid off, made part-time and / or material changes in terms and conditions of the employment agreement and the duration of the lay-off. The obligation to negotiate ends when the obligation to negotiate has been fulfilled, i.e. the grounds and effects of the measures, the policy or action plan, options / proposals for limiting the number of persons subject to redundancies and mitigating the consequences of redundancies for employees have been discussed in the spirit of co-operation. After the change negotiations, the employer shall, within a reasonable time, provide a general account on the decisions to be considered on the basis of the matters previously discussed in the change negotiations.
When does an employer have legal grounds for dismissals?
The ground for dismissal is at hand when the duties available are reduced both substantially and permanently. Poor performance and an uncertain future alone are usually not a sufficient ground for dismissals, but they provide a reason to reorganize the company's operations, which will result in less work available. The reorganization of work should result in the cessation of certain tasks and/or their redistribution to other employees as minor additional work. There is no ground for dismissal if the employer, either before or after the dismissal, has taken on a new employee in a position similar to that of the dismissed employee, the work has not resulted in an actual reduction of one's duties or the employee can be placed or reasonably trained to another position within the company. The extension of a fixed-term employment agreement is also considered to remove the legal grounds for dismissal.
We help our clients to assess whether there are grounds for dimissals and whether there are any vacancies in the company or any other company under its control that could be offered to the employee as an alternative solution to a potential dimissal. In addition, we help to prepare termination documents and take care of matters related to change security, for example.
A well-prepared process minimizes the risk of having to pay compensation for unjustified termination of employment relationship (generally equivalent to the employee's 3-24 months' salary) or compensation for breach of the co-operation obligation (compensation of up to EUR 35,000 per employee). In addition, if the employer is chosen for dismissal or lay off on discriminatory grounds, compensation may also be paid for violating the prohibition of discrimination.
Do all negotiations concern personnel reductions?
Not all negotiations under the Co-operation Act are aimed at personnel reductions. Co-operation matters cover many key issues in the workplace, such as significant changes in the status of employees, working methods and transfers affecting the position of employees, and working hours arrangements resulting from the closure, transfer, expansion or reduction of a company or part of a company, termination of employment, principles for the use of temporary agency work and the working community's development plan.
We are more than happy to assist in the preparation of plans and principles relating to any negotiations and discussions held in accordance with the Co-operation Act. We help our clients to ensure that the obligations based on the Co-operation Act are complied with in all situations.