The
European Directive on Information and Consultation, which was ratified last
month, has far-reaching implications for employee relations. Here, The
Involvement and Participation Association offers guidelines for putting in
place an effective consultative framework. By Robert Stevens
In three years time, the Directive on Information and Consultation will be
written into the rights of people at work in the UK. Employers should see it as
more than an exercise in compliance. It offers the opportunity to build
effective processes jointly with employees, leading to better forward planning
and decision making. Having a committed and productive workforce is supported
by a very real business case.
The final draft of the directive was agreed on 17 December 2001 at a meeting
between representatives of the European Parliament and the Council of
Ministers. The agreement, now widely known as the National Works Council
Directive, will create a general framework for employees to be informed on
"the recent and probable development of the undertaking or establishment’s
activities and economic situation".
For the first time in the UK it means that every employee will have the
legal right to independent representation for the purposes of information and
consultation, with or without the presence of a recognised union.
The Department of Trade and Industry is to consult widely about the
directive’s implementation.
Phased implementation
Member states may choose whether to apply the directive to either
undertakings employing at least 50 employees or establishments employing at least
20 employees. It is likely that the UK will choose the first, less burdensome
option. Undertaking means any public or private entity that carries out an
economic activity, irrespective of whether it operates for financial gain.
The directive will only apply initially to undertakings with at least 150
employees in the UK as from 2005. Undertakings with at least 100 employees will
be covered in 2007 and undertakings with at least 50 employees a year later.
Confusion over terminology
Much of the fear surrounding the Directive comes from confusion over
terminology. First, disclosure to employees of relevant information by
management is essentially a top-down exercise. Relevant information should be
made available before a decision is taken and in such a way that employee
representatives are able to "acquaint themselves with the subject
matter" and formulate a response.
Second, consultation refers to "the exchange of views and establishment
of dialogue". Consultation should commence with an open mind and take
place "during the planning stage of a decision" in such a way as to
"allow influence to be exerted on the decision-making process".
The directive does not oblige employers to adopt the evidence presented by
employee representatives, although they will have to provide a reasoned
response.
Employees will have the right to be informed and consulted on the situation,
structure and probable development of employment within the undertaking and
envisaged measures that might pose a threat to employment. It also applies to
decisions likely to lead to substantial changes in work organisation and
contractual arrangements.
Consultation should seek to reach consensus, if not a formal agreement. It
should be noted that the directive does not supersede previous UK employment
legislation, or current or future union recognition or collective bargaining
arrangements.
Shape of the framework
HR practitioners should take the opportunity between now and 2005 to agree arrangements
best suited to their own circumstances. Far from being a prescriptive "one
size fits all" model, the directive offers a broad framework for practical
information sharing and consultation. It emphasises that this should be
"in accordance with national law and industrial relations practices".
In July last year IPA published a report, Sharing the challenge ahead:
informing and consulting with your workforce, which gives practical advice on
creating an effective consultative framework. The report also offered an
information and consultation audit based on the IPA’s experience of working
with more than 100 organisations in the private, voluntary and public sectors,
both unionised and non-unionised. The audit posed 12 questions to ensure good
practice in setting up a framework.
– Are the objectives of information and consultation clearly defined?
– Is there a shared understanding of the objectives?
– Is the role of top managers defined?
– Is the role of the representative clearly defined?
– Are the arrangements for information disclosure appropriate?
– Is the process of consultation appropriate?
– Are consultative meetings effective?
– Is there effective feedback from consultative meetings?
– Is there effective training and development for consultation?
– Are there clear links to other communication activities?
– Is there a strong culture of dialogue in the organisation?
– Is there a regular process of review and evaluations?
Structures and processes
Critics often argue that the directive places too much emphasis on the
structures and processes of information and not enough on culture change. The
IPA’s experience is clear: structures and processes are necessary for effective
information and consultation, otherwise too much depends on personalities.
Organisations can choose from a range of information and consultation
mechanisms, some of which may already be in place and reflecting specific
activity, location, culture and size. Information disclosure channels may
include face-to-face and written (electronic or paper) although the final draft
strongly suggests that consultation information should be provided in written
form.
Consultation can be direct or indirect. Consultation groups may operate
temporarily or as a permanent body. The IPA has found that both direct and
indirect forms of consultation are complementary and mutually reinforcing, not
incompatible.
In larger organisations it is common to find consultative arrangements at
both local (workplace or business unit) and national level. An exclusive
reliance on indirect representation makes little sense if the aim is to
increase individual involvement. Equally, direct representation alone is
unlikely to maximise employee input or support a free and frank exchange of
views.
Developing a positive culture
Most organisations already have an information and consultation culture.
Sharing information widely and enabling the workforce to contribute effectively
are important issues for employers and these need to be sustained by a range of
joint problem-solving techniques supported by appropriate performance
management, human resource practices and representative training. Developing a
positive information and consultation culture will require a long-term
commitment to joint working in order to elicit commitment from the workforce to
the prosperity of the organisation.
While this debate has centred on the employer’s right to dismiss employees,
perhaps a better question would be how employers can motivate employees to
exercise their right to participate in workplace decision-making.
Sainsbury’s: setting up a local staff council
A little over a year ago, Sainsbury’s
agreed to the election of staff representatives to its existing network of
local councils and the group council. Prospective candidates need only secure
one colleague to second the application and inform their immediate line
manager. Elections take place where required. Representatives receive training
and the additional duties are recognised in their performance reviews.
Each local council allows for 15 elected members, plus three
non-elected members (the chairperson, a secretary and one union official). At
individual store or depot level the chairperson is likely to be the manager.
For central divisions a director is always the chairperson, with HR providing
the secretary. The local councils meet at least once every two months and
appoint one member to the Group Council, which meets annually.
The local councils discuss performance, local competition,
equal opportunities, changes in working practices and rules, business
initiatives, company performance and suggestions for improvement. The council
is not a negotiating body and representatives on the group council are required
to sign an agreement not to share confidential information.
The role of local staff councils is to give employees a forum
for their views and make a greater contribution to the success of the business.
Indeed, Sainsbury’s has identified a link between high performance and stores
that have an active council.
Blue Circle Cement: managing
change through joint consultation
In 1990 Blue Circle Cement entered
into an agreement with the AEEU, T&G, GMB, and BCSA (British Cement Staff
Association) on the introduction of annual salaries, annualised hours and a
simplified pay grading structure. It established a precedent for collaborative
joint problem-solving.
Initial discussions identified contentious issues for
resolution by a newly formed Company Wide Action Team (CWAT), comprising shop
stewards from each site, site managers and senior management representatives.
Three sub-groups looked at pay, voluntary redundancies, and harmonisation and,
despite two waves of compulsory redundancies in 1993 and 1995, this joint
working resulted in a formal partnership agreement two years later.
Blue Circle Cement signed the Way Ahead partnership agreement
in 1997, which included a three-year pay deal at rpi plus 0.25 per cent,
commitment to a shorter working week, team working, and harmonisation of terms
and conditions, with progression within salary bands linked to skills
acquisition.
Local Action Teams were also set up between local union
representatives and management to deal with local difficulties and report to
CWAT. CWAT acts as the custodian of the agreement, meeting nine times a year,
considering all proposed changes, and setting up sub-groups to deal with
specific projects.
In 1998 Blue Circle had to close two small plants with the loss
of 250 jobs. It invited CWAT to develop ways to lessen the impact on the
individuals involved. Meetings were held at both sites to allow employees to
raise their concerns and a programme was developed to accommodate those who
wished to stay with the organisation.
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Training was increased to allow all employees to develop computer
skills and update their qualifications. Consultants were engaged to provide
advice on CVs and interview technique, and local employers were invited to
recruit from within the workforce. The result was that when the works closed
only 13 people signed on as unemployed.
The company was taken over by French rivals LaFarge in 2001,
which agreed in a meeting of the European Works Council not to tamper with the
valued and effective partnership relations at the UK plants.
