Compliance v engagement – keeping employees informed

The legislation

Over the past decade, two significant pieces of legislation requiring employers to inform and consult with their workforce have been introduced in the UK:

Information and Consultation of Employees Regulations 2004 (The “ICE” regulations). The ICE regulations potentially apply to employers with 50 or more employees. They set out complex procedures about when and where they apply in relation to the negotiation of information and consultation processes. The regulations apply where employers have received a request from at least 10% of an undertaking’s employees. Where there is a failure to agree to an information and consultation process, statutory “standard” provisions will apply, requiring information to be provided to employee representatives in relation to:

  • Recent and probable development of an undertaking’s activities and economic situation
  • Situation, structure and probable development of employment within the undertaking, including threats to employment
  • Decisions likely to lead to substantial changes in work organisations or contractual relations.

(Appropriate consultation has to take place on the second and third points above).

ICE regulations FAQs

Compulsory recognition procedures. These became law in 2000 and require employers to recognise a trade union, where either the majority of relevant employees are union members or following a ballot process. A default recognition procedure generally requires consultation with a recognised trade union in the areas of pay hours and holidays only.

Both pieces of legislation have their own enforcement procedures involving the Central Arbitration Committee (CAC).

Recognition FAQs

Arbitration

Since it was brought in, the compulsory recognition procedure has led to 402 applications to the CAC, of which 200 resulted in union recognition agreements. But hopes that the legislation might lead to greater trade union involvement in workplaces appear dashed. Latest figures from the Office of National Statistics (ONS) indicate that trade union membership continues to decline in terms of actual numbers and density (numbers of members per 1,000 employees). The statistics also show declines in terms of employee numbers covered by collective agreements. In short, the trends in relation to trade union membership and activity have been downwards since 1990 and neither this legislation nor 13 years of a Labour government has altered this trend.

As for the ICE regulations, the CAC has seen very few complaints – just five in 2008/9. While the ICE regulations have undoubtedly had an impact in terms of the establishment of voluntary arrangements, it’s fair to say that they have failed to live up to expectations. They have also had lukewarm responses from some trade unions, concerned that they may be regarded as a potential alternative to longstanding trade union involvement in workplaces.

There is of course, separate employment legislation requiring employers to consult collectively with employee representatives when faced with redundancies (20 or more) or transfers of undertakings. This legislation does affect employers (there are hefty financial penalties for non compliance) but only requires consultation in the face of particular events. Given that these events are either where redundancies are threatened or when a chunk of the workforce is about to leave the employer and transfer elsewhere, it is difficult to see how these compulsory approaches could lead to long-term engagement.

For many employers, the priority is on legal avoidance of or (if necessary) compliance with all of these legislative measures rather than genuine engagement with their employees. That will undoubtedly be a disappointment to those who campaigned for and heralded these legislative changes. Certainly when the ICE regulations came in they did so on the back of a high profile public consultation exercise and a discussion paper entitled High Performance Workplaces: The role of Employee Involvement in a modern economy. Little seems to have changed since.

Engaging for success

The fact that too many areas of the UK’s economy have failed to embrace the notion of employee engagement is also apparent from “Engaging for Success.” This report highlights the commercial and economic benefits that flow from employee engagement, including reduced absence levels, better motivation and performance and a greater understanding for and compliance with organisational change. Yet it notes that only about 30% of UK employees currently feel actively engaged with their work and workplace.

The report’s authors emphasise a need for voluntary engagement, saying: “In our view, extending employee engagement is not an issue for legislation or regulation; it requires culture change. More people need to get it and more people need to do it”. This view is understandable given the impact of the legislation above. A high-profile national awareness campaign is the next step proposed by the authors. It remains to be seen whether the recommendations of this report will now be taken up by DBIS and others. But given the cost-cutting measures that face public sector employers following the next election, and the ongoing challenges for the recession-hit private sector, the need for effective collective and individual employee engagement could not be greater.

Employee engagement case studies

Getting engaged: employee satisfaction at the West Brom

Employee engagement is considered instrumental to business success at West Bromwich Building Society. The approach has paid dividends for the organisation.

BI bounces back with culture of employee engagement

Faced with declining revenues and high staff turnover, BI introduced a new culture based on communication, involvement and performance management, which motivated staff and led to increased profits and lower staff turnover.

Mark Leach, partner, employment team, Weightmans

Comments are closed.