Consultation laws to change work culture

Just
10 per cent of staff could force employers to create works councils and inform
them on all issues affecting their employment, under new proposals unveiled by
the Government yesterday.

The
plans, announced by trade and industry secretary Patricia Hewitt, will provide
the basis for the way the Information and Consultation Directive (ICD) will be
implemented when it becomes law for larger companies in 2005.

The
ICD will give staff the right to be informed and consulted on all employment
issues, such as redundancies, changes to work organisation, contractual
relations and the overall economic outlook for the industry.

Employers
that receive re-quests from as few as 10 per cent of staff for information and
consultation arrangements will have a period of time to negotiate a voluntary
agreement. But if an agreement cannot be reached, organisations will have to
create a works council under the ICD’s default model.

However,
if an organisation has consultation arrangements in place already it would only
have to amend them if 40 per cent of staff backed the changes.

Mike
Emmott, employment relations expert at the Chartered Institute of Personnel and
Development, urged employers to take a proactive approach to the directive by
ensuring they have consultation arrangements in place that suit their business
in advance of the legislation.

"Companies
have a choice to view this as a motivational tool, as a way to drive up
performance and morale by giving employees a voice, or to simply treat it
nominally," he said.

Debbie
McCallion, HR director at software firm Intentia, said the ICD would improve
communication between management and staff.

But
she warned that a small number of employees could use the laws to hijack
negotiations without the backing of the majority of staff, and use the works
council to follow their own agenda.

Fraser
Younson, head of employment at law firm McDermott, Will and Emery, said the ICD
was "unbelievably significant" and would change the UK’s employment
relations culture.

"A
lot of employers are quite relaxed about this, but over time it will
fundamentally change the way employers deal with their staff," he said.

The
new provisions will be enforced by a range of means including the Central
Arbitration Committee, the employment tribunal system and the civil courts,
with a maximum fine of up to £75,000 depending on the size of the organisation.

By
Ross Wigham

www.dti.gov.uk

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