Information and consultation draft regulations

The Government has issued draft regulations entitled The Information and Consultation of Employees Regulations 2005, designed to encourage greater communication between employers and staff.

Q Who will be affected?

A Whether and when employers will be affected by the proposed regulations depends to a large extent on how many staff they have. The proposed regulations set out the following timescales for compliance:

– Employers with 150 or more employees – 23 March 2005

– Employers with 100 or more employees – 23 March 2007

– Employers with 50 or more employees – 23 March 2008.

Q Do we have to put information and consultation (I&C) arrangements in place?

A Not necessarily. The obligation to put an I&C mechanism in place will only be triggered as and when a valid staff request is made, unless the employer initiates negotiations itself.

To be a valid request, it must be made by at least 10 per cent of the staff (subject to a minimum of 15 and a maximum of 2,500).

Q What should we do if we receive a valid staff request?

A As a general rule, an employer will be under a legal obligation to enter into negotiations to reach an agreement on I&C. But there is an exception to this rule. Employers will have six months to negotiate an agreement, although this period may be extended by agreement between the parties.

If there is a ‘pre-existing agreement’ in place then, provided the employee request has been made by fewer than 40 per cent of the staff, an employer will not necessarily have to enter into negotiations to reach a new I&C mechanism. Instead, it will be able to ballot its employees about retaining the existing one.

Pre-existing agreements must:

– Be in writing

– Cover all the employees

– Have been approved by the employees

– Set out how information and consultation will take place.

Q What must an agreement on I&C cover?

A The proposed regulations place the onus on an employer and its staff to agree on what is covered. If an agreement can’t be reached, the proposed regulations state standard provisions will apply, and the employer must provide information about the following:

a) Recent and probable development of the employer’s activities and economic situation – for example, details of the current and predicted trading position

b) The situation, structure and probable development of employment – for example, details of likely redundancies as a result of restructuring proposals

c) Decisions likely to cause substantial changes in work organisation or in contractual relations – for example, changes to terms and conditions.

Q Are we obliged to consult as well as inform?

A If the standard provisions apply, employers are required to consult on the matters referred to in (b) and (c) above. Where decisions are likely to lead to substantial changes in work organisation or in contractual relations, the consultation must be carried out with a view to reaching agreement on decisions within the scope of the employer’s powers.

Q How do the proposed regulations affect existing collective agreements?

A As the proposed regulations currently stand, they will not affect an employer’s obligations to inform and/or consult with a union under the terms of any collective agreement that it has in place. An employer’s obligations under the proposed regulations are separate to those under any collective agreement.

Q How do the proposed regulations fit in with the existing legislation?

A The proposed regulations are in addition to and separate from existing information and consultation requirements, such as those in connection with collective redundancies or the transfer of an undertaking.

Q What if we do not comply with the proposed regulations?

A Both employers and staff may present complaints to the Central Arbitration Committee. If an employer commits a breach of the proposed regulations, it may be ordered to pay up to £75,000 to the secretary of state.

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