Time is running out for employers to ensure they will meet the requirements of the forthcoming Information and Consultation of Employees Regulations, and many existing consultative mechanisms will not pass muster unless changes are made.
From 6 April 2005, employers ignoring requests from at least 10% of their workforce to set up formal information and consultation processes will face fines of up to £75,000 and the imposition of a “straitjacket” government information and consultation model.
If such a request is made, employers will be obliged to inform and consult on areas such as employees’ prospects for employment and any substantial changes to work organisation or contractual relations.
“Employers need to get their skates on,” warns Raymond Jeffers, chairman of the Employment Lawyers Association and global head of employment at law firm Linklaters.
“It is a good idea to get something in place before April and those who want but do not yet have a pre-existing agreement are rapidly running out of time.”
“Pre-existing agreements” have to be in place before any employee request is made, otherwise the governmentÕs onerous default model will apply.
“The government’s solution combines all models and is a bit of strait-jacket for employers who might want different arrangements for different groups,” Jeffers explains.
Richard Hume-Rothery, director of employee consultation specialist the European Study Group, says employers with pre-existing agreements need to make sure they:
include all of their employees in the arrangements
secure approval – as opposed to agreement, which implies a more formal approach – in writing.
“Many companies are not including directors and other senior people, or non-unionised parts of the workforce [in their pre-existing agreements],” he says.
Jeffers says the key questions for employers to ask when setting up a pre-existing agreement are:
Are you going to have the same information and consultation processes for all aspects of the workforce or a variety, with perhaps direct consultation for some?
How will staff representatives be elected and appointed?
What will representatives be consulted about? Will circumstances relating to individuals or to transnational issues be excluded?
How will representatives be trained?
What is the process for feeding from and back to employees?
International tobacco manufacturer Gallaher has just completed a widespread review of its information and consultation practices with the European Study Group.
The company, whose brands include Silk Cut, Benson & Hedges and Old Holborn, is widely-unionised in the UK, and has eight years’ experience of running a European works council.
Prior to the review, it had around eight joint consultative committees for staff, such as factory shopfloor workers, factory supervisory and clerical employees, head office and IT staff. It also had a multi-trade union body with representatives from all the other bodies.
“This over-arching body looks at things that affect the whole workforce, such as a profit-related pay scheme for all staff,” says Mike Griffiths, Gallaher’s head of group HR operations. “The other bodies look at areas such as wage deals specific to that group. It is this multi-trade-union group that will be the body we will use to fall into line with the regulations.”
Post-review, Griffiths is confident that the company will comply with the new regulations once a few changes have been made. To ensure blanket staff coverage, a representative from the non-unionised Weybridge head office will be elected to the umbrella group. And individual consultation of management is to be formalised, with a recognised constitution in writing for this group.
Gallaher employs 2,000 employees in the UK, 5,500 in Europe and some 11,000 worldwide. Its headquarters are in the UK, and it has operations throughout the world, including manufacturing plants in Austria, Kazakhstan, Poland, Russia, Sweden and the UK. The firm is currently expanding its European Works Council, which meets annually, to include accession countries, such as Poland. The expanded council will meet for the first time in March.
“What is required for European Works Councils and these regulations is broadly similar, which is to give information on how the group is doing and what is likely to happen,” says Griffiths. “While these regulations are bound to be a bit of a jolt for companies not used to dealing with unions, they are just about being open and doing a lot of informing and consulting of employees, which we do.
“We have found that if you consistently inform and consult over a period of time and are open with the workforce, involving them with the chief executive on occasion, it is very beneficial to the overall employer-employee industrial relations climate,” he adds. “People are more involved and engaged in the business, which is a good thing, and mutually beneficial.”
Make sure all staff are covered
Foster a company culture of open communication
Back up information and consultation forums with team briefings, intranet postings, and regular news such as an in-house magazine
As with Gallaher, retailer Ikea’s audit of existing staff information and consultation practices threw up the need to embrace management.
“We had the choice to ignore everything and watch the wind to see what happens, which a lot of employers are doing,” says Suzanne Gordon, Ikea’s UK employee relations adviser. “But although we hadn’t previously felt management representation was appropriate, we have opted to ensure management is fully represented.”
The homeware store has 12 years’ experience of running information and consultation committees (ICCs), both in the form of European Works Councils (EWCs) and local unit committees.
Gordon advises keeping a tight rein on discussion topics to prevent committee meetings from becoming whingeing sessions. She says individuals can become confused about how to use the mechanism and may need pointing in the right direction of the grievance procedure, for example.
“It is very easy for works councils to lose their way and impetus, focusing on things irrelevant to the committee,” she says. “It is important to be very clear about what issues are worthy rather than discussing things such as not liking the chips in the canteen, an individual’s salary, or personal grievances.
“It’s about shouting about the successes as much as anything, and it is important to make people realise how valued they are and what a difference their input can make, rather than it being another thing piled on top of their job,” she adds.
Committee members are bound by confidentiality. In the last quarter of 2004, the UK co-worker nominates two EWC representatives and one deputy to attend an international meeting to determine the agenda for the full meeting the following February. At the second meeting, representatives are given global business details, including the company’s current situation, financial targets for the coming year and any business opportunities or threats. Other issues of European interest are also discussed, at times requiring a follow-up group to review and make a decision.
On a more local level, each Ikea store or unit, such as a call centre or distribution centre, has a committee whose member has been nominated by co-workers. These committees meet every four to six weeks, chaired by the store/unit manager, to discuss the company’s business plan, sales and achievements, perceived threats and opportunities, updates on what can be learned and shared, and any unit-specific topics raised by co-workers, such as opening hours over the festive season, or ideas for local sales initiatives.
Ikea trains members in areas such as team briefing/communication or influencing skills. The term of office for representatives is two years, when re-election takes place.
Where consulting with co-workers is required, committees are informed beforehand to allow them to review the business case and strategy, and put forward their thoughts and suggestions. “Surgeries” are held post-announcement and during the consultation period to allow concerned co-workers to talk to committee representatives as well as relevant managers.
The minutes of each meeting are posted on the co-worker notice board, so that everyone can access them.
Make sure representatives stick to relevant topics
Ensure representatives are well-trained and feel valued
Use the forums to shout about successes
Express and logistics firm DHL Express aims to go above and beyond the requirements of the new regulations, using beefed-up employee forums to improve upwards communication and consistency of the brand.
The firm is embracing the information and consultation regulations wholeheartedly. It is extending its existing staff forums to incorporate all employees, including those newly-acquired over the past 12 months with the integration of DHL, Securicor Distribution and Danzas under the DHL brand.
“We welcome these regulations and want to go above and beyond what the regulations want us to do,” says Clare Edmonson, HR director for UK and Ireland at DHL Express. “There was lots of employee enthusiasm for the process and we saw it as an opportunity to integrate the new businesses. Legal compliance is one thing, but if we have to invest so much energy and time and internal resources, we want to make the process work and give value to everyone.
“We hope the forums will help our business not just in improved consistency, but in improved, upwards communication. The process is important in our drive towards greater consistency of brand, making sure the team gets a consistent and clear message about our business,Ó says Edmonson.
“The forums will also give employees a true and thorough upwards consultation and will allow us to get vital feedback from staff at customer touch points.”
DHL Express, which is owned by Deutsche Post World Net and employs just under 20,000 staff in the UK, started work on a new structure last year, enhancing an existing staff forum. It currently has a number of tandem structures in place, with some parts of the business with full trade union negotiations and agreements, while other parts of the organisation remain non-unionised. Traditionally, it has had trade union structures limited to blue-collar, clerical and administrative staff.
DHL hopes to have its new structure in place by this summer at the latest. All employee levels will be represented under the new local, regional and national structure. There will be 52 representatives, 16 regional forums which will meet quarterly, and local forums meeting every two months. Four representatives will be elected to regional committees, who will meet board representatives twice a year.
“The most effective information and consultation committees are on a local level, looking at what is important for employees, their jobs and customers,” says Edmonson. “But if it stops there, it is not as effective as it could be to bring messages up through the organisation and to allow feedback.”
Elections involve asking employees to vote for a number of people who had put themselves forward as candidates once the role and key skills required had been outlined.
Edmonson warns that while DHL believes this to be a really effective tool, it does take time to build up a genuinely two-way process of communication.
Ensure forum works for stakeholders, employees and customers
Use forum to gather intelligence and ensure consistency of message and brand value
Do not leave it too late: allow at least six months lead-in time and three months for the process to bed down and for those involved to get an idea of what is involved
Ensure representatives are well-trained, using Acas, for example, to keep a degree of independence.
The One-Stop Guide to Information and Consultation at Work from Personnel Today is a timely handbook giving authoritative advice on every aspect of consultation with employees, including how to prepare for new regulations in force from April 2005. For more information and to order your copy click here