How will National Works Councils affect UK firms?

From
March 2005, the Information and Consultation Directive will give UK workers a
new right to minimum standards of information and consultation. This article answers
your questions on its likely impact

If a company has a European Works Council, does it also need a national
works council?

The new requirement to have an employee consultative body at national level should
not be confused with the existing requirement to have a European Works Council
(if a valid request for one is received from staff).

However, if an organisation’s European Works Council is based in the UK, it
may be able to function as the national works council as well. But until
regulations on implementing national works councils are in place, this
requirement will remain uncertain.

There may also be practical difficulties relating to confidentiality when
dealing with UK-specific matters.

Will the directive apply to my company, and what is the deadline for
compliance?

This depends on the number of workers in your company. All the evidence so
far is that the Government will decide that only businesses with more than 50
staff will need to comply with the directive. The Government estimates the
directive will only apply to 1 per cent of all UK companies, although this will
cover 75 per cent of employees.

When businesses will actually have to comply is based on a sliding scale,
which also depends on the number of staff.

What are my company’s information and consultation obligations?

The right to information and consultation will cover:

– Information on the recent and probable development of the business’
activities and economic situation

– Information and consultation on the situation, structure and probable
development of employment within the business and on any anticipatory measures
envisaged, in particular where there is a threat to employment (ie,
redundancies)

– Information and consultation on decisions likely to lead to substantial
changes in work organisation or in contractual relations, including decisions
already caught under the TUPE and collective redundancies information and
consultation obligations.

It is unclear how much detail the Government will set out or exactly what
these categories mean. However, some examples of areas that might be considered
are TUPE transfers, redundancies, changes to working conditions, restructuring,
financial accounts, health and safety issues, business plans, environmental
issues, training and employee development. The list is potentially very long.

How do the new requirements compare with current UK information and
consultation obligations?

At present, there is no general framework requiring employers to set up
standing arrangements for informing and consulting with employee
representatives on general business issues that may impact on staff. There are
specific requirements obliging employers to inform and consult in relation to
TUPE transfers, collective redundancies and other issues. However, these
obligations are usually only triggered after a specific event, such as a
redundancy situation, or a business transfer.

Under the new directive, staff representatives will have the right to be
informed and consulted on a very wide range of matters, potentially spanning
all areas of business activity. They will also have the right to be informed on
a continual basis, not just on the occurrence of single trigger events, as in
much of the current legislation.

When does the information have to be given and consultation have to
occur?

The directive states that information should be given to staff
representatives ‘at such time, in such fashion and with such content’ as are appropriate
to enable them to conduct an adequate study and, where necessary, prepare for
consultation.

The timing, method and content of consultation should be ‘appropriate’ and
it should be conducted at the relevant level of management and representation
(depending on the subject under discussion) and on the basis of information
supplied by the employer, and an opinion formulated by the staff
representatives.

The first step, therefore, is to provide information. Once the
representatives have had an opportunity to consider the information, you must
consult with them. You must allow staff representatives to meet with the
company and give a response to any opinion they put forward, together with a
reason for that response. Consultation must also be ‘with a view to reaching an
agreement’ on certain decisions.

However, nothing in the directive gives staff the power to make decisions or
override or affect an employer’s decision. Therefore, the national works
council will not have any power to legally negotiate or bargain with the
employer. But for the sake of good employee relations, you may decide to accept
its wishes at times.

This is an edited version of part of Personnel Today’s One Stop Guide to
Employee Consultation

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