A recent IPA survey found that only a quarter of UK companies have plans in place to deal with the forthcoming information and consultation legislation. Annabel Mackay of Charles Russell Solicitors helps employers get to grips with the new law by providing an overview of the legislation and employers’ obligations.
In July 2003, the DTI published draft Information and Consultation of Employees Regulations which adopt the provisions of the European Directive on information and consultation.
The Directive aims to “promote social dialogue between management and labour” thereby addressing disquiet regarding employees being dismissed by text message or hearing about workplace closures on the news.
The fundamental principle behind the Regulations is the parties’ duty, “to work in a spirit of co-operation and with due regard for their reciprocal rights and obligations.”
Application
The Regulations will eventually apply to undertakings in the UK employing at least 50 employees. The broader category of workers is not covered and there is a phased implementation period.
The Regulations will apply to undertakings with:
Duty to negotiate
Information and consultation procedures must be established where a valid request is made by 10% of the employees, subject to a minimum of 15 and a maximum of 2500 employees.
They may also be established voluntarily by the employer. It is expected that it will become good practice to voluntarily establish such procedures in all organisations with more than 50 employees.
If pre-existing arrangements exist, the employer can hold a ballot to see if a request is endorsed by 40% or more employees.
Negotiations
Negotiations must start within 1 month of a valid request.
Negotiating representatives
In order to initiate negotiations the employer must:
All employees must be entitled to participate in electing or appointing representatives and should be represented by a representative.
Negotiated Agreement
There is a 6-month negotiation period, unless the parties agree to an extension.
The negotiated agreement must:
(a)All the negotiating representatives sign it, or
(b)It is signed by a majority of the negotiating representatives and either approved in writing by at least 50% of the employees or approved by 50% of employees who vote in a ballot.
Otherwise, the nature, subject matter and timing of the process and the number, selection method and the identity of representatives can be agreed by the parties.
Default procedures
If negotiations prove abortive, default procedures apply.
Election
Under the default procedures, one representative per 50 employees must be elected in accordance with prescribed ballot procedures, subject to a maximum of 25 representatives.
Content
The employer must provide representatives with information on:
1) Recent and probable developments in the undertaking’s activities and economic situation.
2) The situation, structure and probable development of employment within the undertaking and any anticipatory measures envisaged, particularly where there is a threat to employment, and
3) Decisions likely to lead to substantial changes in work organisation or in contractual relations (including collective redundancies and TUPE).
The timing and manner in which information is provided must enable representatives to conduct an adequate study and prepare for consultation, where necessary.
Consultation
The employer must consult on the information contained in classes 2 and 3.
Consultation must be conducted:
These requirements suggest that discussions should take place before final decisions are made and with adequate opportunity for the parties to exchange views.
Pre-existing agreements
Where pre-existing agreements satisfy minimum requirements and a request is made by fewer than 40% of the employees for new arrangements, an employer may hold a ballot to see whether the request is endorsed. The existing arrangements can remain if fewer than 40% of employees support the request.
The pre-existing agreement needs to:
Guidance will be issued on how approval is demonstrated but it would appear that the requirements could be less rigorous than those applicable to new agreements.
Confidentiality
An employer may withhold information whose disclosure would, on an objective assessment, seriously harm or be prejudicial to the employer’s business. Employers may also require employee representatives to keep information confidential and take action against them in the event of a breach.
Sanctions
There are extensive sanctions for non-compliance. Failure to comply with a CAC order can give rise to a complaint to the EAT, which may impose a penalty of up to £75,000.
Practical steps
If employers implement information and consultation agreements before the Regulations come into force, they will probably have greater control over the content and process.
The default procedures are likely to be used as a benchmark in negotiations once the Regulations are implemented.
If an employer already has an effective consultation body, these arrangements should be reviewed to ensure that the minimum requirements for pre-existing agreements are met.
Where employers do not intend to initiate negotiations prior to or after the Regulations are implemented, they should still have an action plan for responding to employee requests so that they are not disadvantaged in the negotiation process.
Related items
In light of the new I&C Directive which is effective in March 2005, has anyone commenced preparation for its introduction?
http://www.hrzone.co.uk/item/125078
Has anyone implemented any I&C arrangements yet and if so, would they be willing to share these with me?
http://www.hrzone.co.uk/item/124294
