UK employers are being threatened with French-style staff consultation laws as part of an EU review into employment directives.
The Information and Consultation of Employees (ICE) Regulations, which require organisations to consult staff about business decisions, are under the microscope by the European Commission for being too “employer-friendly”.
Officials in Brussels claim that the UK’s interpretation of the original European directive was flawed. Following heavy pressure from business leaders, the government allowed employers with pre-existing consultation agreements to be exempt from the regulations.
The EC said it would ask the UK government to justify this decision, and said it was prepared to launch legal proceedings to instigate a change.
Philip Sack, director of policy at the European Study Group, which represents multinational companies, said this was bad news for UK employers.
“Many have set up new consultation arrangements that made use of the considerable flexibility given by the ICE regulations,” he said.
“The review could mean the UK moving closer to French-style works councils, where employers have to consult with staff much earlier and about all kinds of issues that could affect the workplace.”
The review could also see consultation procedures become legally enforceable at the Central Arbitration Committee, which rules on ICE disputes. This would open up the possibility of more fines – currently up to £75,000 – being dished out to firms not consulting properly.
David Yeandle, deputy director of employment policy at manufacturers’ organisation the EEF, said the review was an example of Brussels interfering in domestic matters.
“This is a classic case of one or two officials having their own agenda, and is worrying for employers,” he said.
Employers should be prepared to review and adapt their consultation arrangements to make sure they comply in the future, he added.
What are the ICE Regulations?
The Information and Consultation Regulations came into force in April 2005. They require employers to set up permanent and legally enforceable staff consultation arrangements when requested by 10% of employees.
Initially, this applied to firms with 150 or more employees, but from 6 April 2008 they will apply to firms with 50 or more workers. Companies with ‘pre-existing arrangements’ are exempt from the rules.