Early voluntary deals could pay dividends in light of the incoming
information and consultation laws, By Robbie Gilbert
The agreement that EU Member States reached last month requiring employers
to do more about information and consultation in the workplace looks like good
news for employees. But what are the real implications for employers?
It means that some form of representative body will have to be set up in all
but the smallest workplaces. In those where trade unions are recognised for collective
bargaining purposes, dialogue with them may be enough, but elsewhere new
mechanisms will be required.
Although it will probably be 2004 before UK law obliges anyone to act,
employers are already asking what systems they need in place. This is sensible
in light of what happened with European Works Councils. Those who acted before
legal obligations took effect gained much goodwill and often established
procedures that better suited their businesses.
The main stimulus for the new law is concern over the handling of
redundancies, but will it make any difference? As politicians across Europe
know, redundancies will still happen – the business case for them are often
overwhelming.
What they hope is that the new law might deal with those cases where people
learn that their jobs are going via the media. Some – including the EU
Commission – want penal sanctions to apply where structured consultation has
not taken place first. UK ministers take a different view. They know that no
employer consciously chooses to announce redundancies through the media. Often
things go wrong because companies are vulnerable to leaks – sometimes from
those outside their organisations who they feel obliged to warn, and who then
"spin" the story.
As Personnel Today readers will know, the vital debate about sanctions is
not over yet. The European Parliament may try to reinsert what the employment
ministers agreed to take out. Then employers would face a stark choice – either
to take the risk that those with whom they share information will respect
confidences about redundancies, or to keep all outsiders out of the loop.
The danger with penal sanctions is that they will cause costly delays. They
would require that people be fully reinstated until the necessary procedure has
been followed. This could prove an issue for workers as well as employers –
greater involvement will be devalued if redundancies delayed by drawn-out
consultations lead to long-term unemployment.
Delay is the fundamental worry throughout the directive. The directive talks
about allowing employee representatives "to examine the matter
properly", submit their opinion and obtain a "reasoned response"
as a prelude to consultation about change. That does not look like a recipe for
nimble management. Similar laws in Germany mean that decisions can take six
months to finalise.
But the directive also says that Member States may entrust management and
labour at company or plant level with defining the practical arrangements. This
means that, as with European Works Councils, an early deal with employee
representatives on the procedures to be used may be the best way forward.
Speaking for the Government, Europe Minister Peter Hain has promised that,
"When the directive is finally adopted in the UK we shall ensure a smooth
introduction which harnesses existing arrangements as far as possible".
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There is always a case for waiting to see what legislation finally emerges,
and that is what advisers will normally tell companies. The best advice here is
not to delay. A voluntary deal can give greater scope for the quick decisions
that are sometimes essential to protect the long-term interests of both the
business and its employees.
Robbie Gilbert is a consultant specialising in employee representation
with Eversheds, and chief executive of EFSP – the Employers’ Forum on Statute
and Practice
