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Board-level Representation

Workers in companies with more than 150 employees have the right to participate in management decisions. The mechanism for doing so can be agreed between the company and the employee representatives. However, if there is no agreement, it is up to the company to decide the level at which employee are represented in a single-tier board, in a supervisory board or at operating level.

In companies with 150 or more workers in Finland, employees have the right through their representatives to participate in the company’s key decisions (Act on Personnel Representation in the Company Administration (725/1990)).

 

The mechanism for doing this can be agreed through the cooperation procedure, although at least two of the employee groups (manual, non-manual and more senior staff) must agree and together they must represent a majority of employees for the agreement to be valid.

 

If there is no agreement with the company and provided at least two employee groups representing a majority of employees in the company ask for it, the statutory provisions for employee representation in decision-making apply. These give the right to the employees to nominate their representatives onto decision-making bodies. However, it is the company that decides whether these representatives participate at the level of the board of directors, in a specially set-up supervisory board or at management level for the company’s operating units.

 

Under the statutory provisions, there must be between one and four employee representatives, who must be employees of the company and they may make up one fifth of the body on which they sit (be equivalent to a quarter of the other members). They are chosen by the employee groups, with an election if the groups cannot agree. The election follows the same procedure as the election of health and safety representatives. This is that the election is organised by the employees, and in sucha manner “that provides all employees at the workplace with an opportunity to participate in the election, and that does not cause any unnecessary inconvenience to the activities of the workplace”. The representative must be a “legally competent person” and the may not be “bankrupt or under a ban on business operations”.They serve for the same term of office as other members of the body on which they sit, but if nothing else has been agreed the maximum length of office is three years.

 

They have the same rights as other members of the board, or other body, although they cannot participate in decisions on industrial disputes, pay and conditions or the recruitment and dismissal of senior managers.

 

At any time the statutory provisions can be replaced by an agreement with the company, provide the conditions set out above apply.

L. Fulton (2020) National Industrial Relations, an update. Labour Research Department and ETUI (online publication). Online publication available at http://www.worker-participation.eu/National-Industrial-Relations.