Change Negotiations – Just a Formality or a Stumbling Block?

Change negotiations are often perceived as either a mere formality or a process in which the risk of failure only increases at every stage. However, the purpose of these negotiations is not to delay inevitable staff reductions, much less to increase disputes. On the contrary, the true goal of the regulations is to promote cooperation between the employer and the employees, taking into account the rights and interests of both parties.

So, what should an employer keep in mind to ensure that the objectives of the Act on Cooperation – i.e., promoting cooperation, guaranteeing employees’ opportunities to influence decisions, and supporting employment in the context of operational changes – are truly achieved?

Good preparation is half the battle

Careful preparation is one of the most effective ways to avoid turbulence during – and after – negotiations.

The first step in preparation involves considering when to initiate negotiations. According to the Act, the right time is when the employer is just beginning to consider measures that may have an impact on the employees. This provision, of course, formalizes the requirement – already well understood by many – that no decisions of any kind may be made before negotiations have taken place.

In practice, however, the timely initiation of negotiations remains at the employer’s discretion. Taking into account the employer’s obligation to provide the negotiating party with sufficient information on the matters to be negotiated, it can be assumed that the plan should be at a stage where a meaningful discussion can take place. On the other hand, the plan does not need to be fully finalized; in fact, it is advisable to leave room for alternatives. There is no reason to go into such a high level of detail that employees are left with no opportunity to influence the matters under discussion.

It is worth putting effort into drafting the negotiation proposal. In particular, the planned measures and the rationale behind them should be addressed with sufficient precision so that the negotiating party understands the reason for initiating the process. A shared understanding that negotiations are necessary in the first place helps facilitate the negotiations themselves.

“It’s not about quantity, but quality” and other practical tips

When it comes to scheduling, employers may consider how many negotiation sessions constitute “enough.” From the perspective of the obligation to negotiate, at least two negotiation sessions must be held (an opening and a closing meeting). The broader the scope of the matter and the more significant its impact on the employees, the more negotiation sessions are often required. However, the number of negotiation sessions is not an end in itself. Rather, what is essential is that all matters covered by the change negotiations – such as the grounds, impacts, and alternatives – are properly addressed.

The employer is not obligated to conduct negotiations for longer than required by the Act or the applicable collective bargaining agreement, nor is it necessary to reach consensus on the matter under negotiation. Meetings should not be held simply for the sake of holding them, nor is it necessary to go over every topic covered by the negotiations at every meeting.

It is important to keep records of the negotiations, as the employer bears the burden of proof that the Act has been complied with. A draft minutes prepared before the negotiation also serves as a useful preparation tool for the meetings and later as a framework for discussion. The minutes are usually signed by all parties to the negotiation, and any differing opinions are also recorded in them. It is also advisable, whenever possible, to include in the minutes a statement from the parties confirming that the matters have been adequately addressed. This is usually achieved by providing employees with opportunities to ask questions and express their views, and by engaging in genuine discussion of those issues.

The Act, as such, allows the parties to reach an agreement on the matters under negotiation even during the negotiations. Generally, however, the employer makes the final decisions. It’s important to remember that negotiations aren’t over until after the final meeting – so no decisions are recorded in the minutes of the final meeting unless the parties have mutually agreed on them. If this were to happen, it should be clearly stated in the minutes.

Don’t put down your pen just yet!

After the final meeting, the employer’s focus quickly shifts to the practical implementation of the changes. Before that, however, the employer must, within a reasonable time after the negotiations have concluded, provide an assessment of the planned decisions, their impact on the employees, and the timeline. The latter is often crucial: how will business decisions and, on the other hand, the impact on employees be implemented in a way that takes into account, for example, the varying notice periods for employees?

From the perspective of the Act, an employer may implement the measures discussed in the change negotiations even months after the negotiations have concluded. What is essential is that the implemented measures are fundamentally related to those that were negotiated and that, in terms of their nature and scope, they are carried out within the limits agreed upon.

The actual personnel impacts are, of course, implemented in accordance with the Employment Contracts Act and the applicable collective bargaining agreement. In principle, the employer may select which employees to terminate based on its own criteria, provided that the selection is not guided by discriminatory or otherwise improper grounds. From the perspective of the Employment Contracts Act, terminations may be directed (only) at those whose workload has substantially and permanently decreased. At this stage, attention must also be paid to the obligation to redeploy employees, and any new hires must be carefully considered.

Hard work pays off

Change negotiations are not a pleasant process for anyone. However, they can also be viewed as a tool whose benefits depend on how the negotiation process is managed.

For the employer, carefully managed negotiations are, above all, insurance against future disputes. At least as important, however, is what the negotiations ultimately yield for the staff and the entire work community. Even if the final outcome does not satisfy everyone, the experience of having one’s views heard and options weighed has a significant impact on how the change is perceived.

The goals of the Act need not remain mere rhetoric. They can be realized when the employer views negotiations as a way to lead change openly and by listening to the staff, as well as an opportunity to engage the staff in the change. Negotiations require effort, but the old saying holds true here as well: hard work pays off.