Information and Consultation Directive


Q Why worry about works councils? The staff in my company have no interest in this.

A Even so, when the Information and Consultation Directive (ICD) becomes law in the UK, it will only take a relatively small number of staff to trigger the process under which the company will be forced to negotiate its own works council, or operate under the ICD’s ‘default model’ works council. A trade union might use a works council to get a foothold in the company where it doesn’t have sufficient support to achieve statutory recognition. In any event, are your staff communications/consultation processes up to scratch?

Q What does the ICD require of employers?

A They are not legally required to do anything until a sufficient number of staff have triggered the process. Employers will then have a set time to negotiate a works council agreement with their staff representatives. If one isn’t reached, or the employer refuses to negotiate, the ‘default model’ works council will apply.

Q What does the ‘default model’ works council require of employers?

A The ICD contains three categories that will require informing and consulting with the works council:

1) The state of the business and its future plans

2) Issues affecting job security

3) Substantial changes in contractual relations or work organisation

Categories 1 and 2 require the consultation process to be ‘the establishment of a dialogue and exchange of views’ – there is no need to negotiate. Category 3 requires the consultation to be ‘with a view to reaching agreement’ – which is close to a negotiation. This category covers substantial changes in terms and conditions and in how/when/where work is done, with what equipment and with what staffing levels and so forth.

In addition, the ‘default model’ will impose a duty of confidentiality on works council members; but employers will only be allowed to refuse to disclose confidential information where it would otherwise cause serious harm to the business.

Q What are the pros and cons for employers in doing a deal early on a works council?

A The advantages are:

– It can improve staff communications and consultative processes

– It can minimise or isolate union presence in the workplace

– An employer can design an information and consultation structure that best fits its culture, organisation shape and strategic objectives, only covering subjects it is prepared to consult over

– Employers can avoid the quasi negotiation over the category 3 issues in the ‘default model’

– Employers can extend the areas over which they can refuse to inform and consult

– Management will be in control of the process if they initiate it and will gain a ‘proactive dividend’ in doing so

– There will be sufficient time to ‘educate’ senior and line management to come to terms with the impact of the ICD and to manage employee expectations

The disadvantages are:

– It may give unrecognised unions a foothold in the company, providing them with a platform to press for recognition

– Management will need to involve the works council far more in any decision-making

– It might be wrong to initiate the negotiation process at the same time as the company is re-organising business operations

Q When does it become UK law?

A It is being phased in over a number of years, depending on the organisation’s size. For those with 150 staff or more, the ICD will become law in March 2005. For those with 100 plus, the date is March 2007 and, for those with 50 or more, March 2008.

Q Why not do nothing until 2005/2007/2008?

A This is not a sensible option. At the very least, organisations with 150 or more staff should consider these two points:

– There will not be enough time for management to develop its strategy, educate line and senior management and control the speed of negotiations once a formal request for a works council is made after March 2005.

– The works council needs to run for nine to 12 months pre-March 2005 to ‘iron out the wrinkles’ before the ICD becomes law in the UK. This means the works council agreement has to be in place by about May 2004. To achieve that, management will have had to roll out its staff communications to the workforce and had discussions with relevant recognised unions by September/October 2003.

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