Changes to the Co-operation Act on 1 July 2025: How will negotiations change?

The Co-operation Act is being amended again in July 2025. The scope of application is changing so that, in future, demands regarding change negotiations will only concern employers who regularly employ at least 50 people. This is a significant change compared to the current situation, where the threshold was 20 employees.

The purpose of the amendments is to increase flexibility for small and medium-sized enterprises and reduce the administrative burden imposed by the current legislation, particularly on enterprises with fewer than 50 employees. Employees’ right to information is also addressed.

What changes?

1. The scope of application increases to 50 employees

According to the new law, the actual cooperation procedure (the responsibility to negotiate with personnel in certain situations of change) will apply only to employers who regularly employ at least 50 people. The legislation aims to ensure that the more demanding procedures focus on the largest organizations, which have the resources to implement them.

2. Simplified procedures for smaller businesses

Employers with 20–49 employees are exempt from the full co-operation procedure, but not from their obligation to inform employees. In future, these employers will be subject to a lightened co-operation procedure. This procedure focuses on anticipatory and transparent dialogue with employees.

It is important to note that if an employer is considering taking action such as dismissing employees, reducing working hours or unilaterally changing fundamental terms of employment for production or financial reasons, and these actions affect more than 20 people within a 90-day period, they will have to start cooperation negotiations even if they employ fewer than 50 people.

Exemption: Co-operation negotiations are not necessary if the layoffs in question are based on temporary reduced work or the possibility of offering work, and last no more than 90 days.

3. Corporate transactions remain broadly regulated

The obligations relating to mergers, demergers and business transfers will remain unchanged and continue to apply to all employers with at least 20 employees.

4. Negotiation periods shortened

Following the entry into force of the legislative amendment, the duration of change negotiations will be halved. These negotiations will have a minimum duration of either three weeks or seven days, depending on the matters under discussion and the size of the company or organisation’s workforce.

A new provision concerning the time allocated for assessing public employment services will be added to the law when an employer is considering dismissing at least ten employees. In such cases, employment relationships may not be terminated until the 30-day period reserved for evaluating these services has elapsed. In practice, this means that employers must submit the negotiation proposal to the authorities immediately upon the start of negotiations, so that the 30-day countdown can begin.

What does this mean for employers in practice?

The reform enables small and medium-sized enterprises to make personnel-related decisions in a more flexible and business-driven manner, as they are no longer bound by a cumbersome consultation process. However, even under the lighter model, transparent communication and employee involvement in decision-making remain expected — mere notification is unlikely to suffice.

From the perspective of large employers, the key change is that the duration of change negotiations has been halved. Nevertheless, the substantive requirements of the negotiations remain unchanged. Employers are still required to address the grounds, impacts and alternatives of the proposed changes, as well as proposals and alternative solutions presented by employee representatives or employees themselves, to the same extent as before.

While the amendment primarily affects the duration of negotiations, it is a good time to review and update internal cooperation procedures and document templates to ensure compliance after 1 July 2025.

Furthermore, as negotiation periods become shorter, particularly the seven-day negotiations, thorough preparation becomes critical. Rushed negotiations increase the risk of disputes arising from the process. It is important to remember that seven days and three weeks are the minimum durations, and longer negotiations are permissible if necessary. In companies covered by collective agreements, it is also important to review the provisions of the agreement, as these may impose stricter requirements than the law.

How to prepare for the change?

Employers are advised to take a proactive approach and ensure that:

• employee headcount tracking is up to date and properly documented.
• internal cooperation practices align with the company’s size going forward;
• any personnel-impacting measures are scheduled in accordance with the new regulation; and
• any cooperation procedures specified in applicable collective agreements are reviewed, as some agreements may require stricter practices than those set out by law.
• any cooperation procedures specified in applicable collective agreements are reviewed, as some agreements may require stricter practices than those set out by law.

At NORDIA Law, we provide clients with practical guidance on implementing the new cooperation model.

We assist with planning and documenting cooperation procedures, interpreting collective agreements during periods of change and handling potential disputes.

Contact our employment law experts