Giving wings to consultation

A major restructuring exercise was the perfect opportunity for Air Miles to
get its consultative machinery up to scratch. But no-one could foresee the
impact this would have on the reorganisation, as Tim Craddock explains

The recent adoption of the European directive on employee consultation
caused consternation among some UK HR practitioners. Their concern was that
European recipes for employment law do not necessarily suit the British palate.
Voluntarism – the sceptics will argue – is the UK way and consultative
arrangements are best left to individual nation states to determine.

While "one size fits all" is not necessarily the ideal way to get
people actively to commit to consultative arrangements, we must not lose sight
of the central issue, which is the need to listen to and talk to your staff. It
sometimes seems that the real objection of the directive’s critics is the
actual obligation to consult, rather than the form consultation takes.

Air Miles has recent experience of both a new staff consultative body,
called Viewpoint, and a major restructuring programme involving the transfer of
our call centre operations from Crawley to our site at Birchwood, near
Warrington. We have seen in practice how proper consultation is essential to
managing transition successfully.

The reorganisation

Air Miles is a wholly owned subsidiary of British Airways and is probably
the best known loyalty scheme in the UK. More than five million people collect
Air Miles through day-to-day purchases. They can redeem them for a wide range
of leisure products, from flights and holidays, to cinema tickets and
restaurant meals. Founded in 1988, Air Miles has grown rapidly and employs 900
staff split across two sites in Crawley and Birchwood.

Earlier this year, we conducted a review of our operations to ensure we were
maximising our efficiency and keeping strong control over our cost base. As a
result at the beginning of May we announced a proposal to consolidate our call
centre operations at Birchwood – where we have a purpose-built and
under-utilised facility – and close the call centre at Crawley. Our head office
functions and sales and marketing teams would remain at Crawley. The
consequence of this was that 250 jobs would go at Crawley, with 160 created at

Legal obligation to consult

These proposed redundancy figures triggered the collective consultation
obligations under section 188 of the Trade Union and Labour Relations
(Consolidation) Act 1992. If a company recognises a trade union for the area
where the redundancies are proposed, then consultation must be with the union
(previously, an employer could choose to consult either with the union or with
separately elected employee representatives).

Where there is no union, consultation must take place either with a standing
consultative body (for example, staff consultative committee or works council)
or with a body elected especially for the purpose of consulting over the
particular redundancy exercise. Air Miles is not unionised, but has a standing
consultative body which was the focus for discussions during our consultation

Consultation at Air Miles

Separately from our business and operational review, we had been
reorganising our employee consultative structures. Our business is structured
into divisions and we had separate consultative bodies for each division. This
had led to a loss of focus on key business issues because the consultative
committees tended to focus on parochial issues within their "patch".
The company also had a new managing director, Drew Thomson, who joined from our
parent British Airways. Drew was committed to strengthening consultation across
the whole company, raising the focus from "bike shed" issues to those
facing the business and performance.

Drew instituted a review of our consultative committees which was carried
out by the committees themselves, facilitated by HR. The result was a new
structure – Viewpoint – to cover the whole of Air Miles. We divided the company
into 10 constituencies, with a total of 31 representatives. Of these 14 were to
attend Viewpoint meetings, and they were to be joined by the managing director.
The Viewpoint representatives would elect a facilitator who would chair
meetings and ensure minutes were prepared and documentation distributed.

For elections, we initially decided on the established route of inviting
people to put themselves forward and then hold an election. But following
further discussions, we were concerned this process could lead to a relatively
narrow spectrum of people coming forward. We wanted to make Viewpoint relevant,
visible, responsive and accountable and wanted representatives who commanded
the widest respect in their constituencies. We therefore decided instead to
encourage our staff to nominate for Viewpoint the people they thought were best
suited to represent their interests, rather than have a traditional election.
Those with the most nominations were then invited to join. This process worked
well. For the people nominated, there was the confidence that they had the
enthusiastic support of their constituents.

The Viewpoint effect

Having established our new consultative forum in April, it was immediately
plunged into the defining experience of being involved in a major redundancy

When we announced the proposal on 2 May, we explained that we were embarking
on a three-month consultation period, as set out by law. We explained we had
identified the need to reduce our cost base and that in our analysis this
required closing our call centre at Crawley, transferring the work to Birchwood
and rationalising the call centre support areas. But we made clear that what we
had put forward was not necessarily the only solution. We wanted our staff to
consider the proposal and look into any alternatives. We made technical staff
available for business workshops which our staff were invited to attend. We
emphasised that Viewpoint would be the primary route for consultation, but that
we were also open to individual discussions with staff.

To underscore our commitment to the consultation process, we scheduled
weekly meetings with Viewpoint, with the managing director present. We also
commissioned a firm of independent career and counselling specialists, Hurst
Associates, to provide impartial support and advice for staff throughout the
consultation period and up until any redundancies took place.

The input of Viewpoint representatives has been invaluable. Apart from the
myriad issues raised by staff, which they helped marshal and bring to the
company, it has been instrumental in looking for alternative proposals.
Testimony to the success of this was the adoption of a counter-proposal to
maintain an evening/weekend shift for call centre staff at Crawley. This
alternative arose from discussions which initially took place in the business
workshops. Recognising that we receive most calls in the evenings and at
weekends, we were asked to investigate the feasibility of keeping such a shift
at Crawley. This reflected that we already employed a large number of staff
working such shifts and for whom evening and weekend work fitted their domestic

Following an exhaustive review of this option – in which Viewpoint
representatives played a key part, both in evaluation and in discussing the
option with their constituents – we were able to announce its implementation.
As a result, 50 jobs have been saved at Crawley (meaning we have avoided 20 per
cent of the proposed redundancies) and our staff have been able to see the
concrete results active consultation can bring.

Managing any process of transition is difficult. From our experience, we
have learnt that to do so successfully requires the active engagement of staff
– it is they who are affected and whose input is vital to ensure the process is
fair and efficient. As a direct result of our consultation process, we saved 50
jobs and implemented the rest of the proposals in a way that saw us reach
formal agreement with our staff, through their elected representatives. The
simple message is: consultation works. n

Tim Craddock was at the time of writing head of employment law and
recruitment at Air Miles

Redundancy consultation – the law

The collective consultation
obligations under section 188 of the Trade Union and Labour Relations
(Consolidation) Act 1992 require that all redundancy situations involving 20 or
more proposed redundancies must be the subject of consultation with employee
representatives before any redundancies take effect. Where there are 100 or
more proposed redundancies, then consultation must take place at least 90 days
before the first dismissal takes effect.

While a literal interpretation of these requirements suggests
that consultation can run in parallel with people actually being under notice
of redundancy (therefore you can be consulting while the notice clock is
ticking for each redundancy dismissal), the courts have stated that this is not
reasonable. They have said, in essence, that meaningful consultation is not
going to take place if people are already under notice of dismissal for
redundancy. This is because it will seem that the employer has made up his mind
and is merely "going through the motions".

It is essential that consultation is – and is seen to be – open
and "with a view to reaching agreement with the appropriate
representatives" (TULR (C)A s188).

Consultation needs to cover:

– Ways to avoid proposed redundancies

 Reducing the number
of redundancies

 Mitigating the
consequences of the redundancies (for example, through helping redundant
employees to find other jobs in the local area).

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