Information and consultation: legal Q&A

Macmillan Publishers has recently been fined £55,000 for failing to comply with the Information and Consultation of Employees Regulations 2004 (ICE Regulations). This is the first penalty awarded under the ICE Regulations, which were recently extended to cover organisations with 100 or more employees.

Q Do the regulations apply to all employers?

A They apply to organisations that employ 100 or more employees in the UK. This will be extended to organisations that employ 50 or more people from April 2008.

Q How should the number of employees be calculated?

A The employer is required to work out the average number of employees employed at its company over the previous 12 months. As the regulations apply to employees only, agency workers, consultants and independent contractors should not be counted. An employer may count a part-time worker as half an employee (if they are contracted to work for 75 hours or less a month), although it is not obliged to do so.

Q If an organisation employs 100 or more employees but it does not have a pre-existing information and consultation arrangement in place, what are its obligations?

A It is not obliged to do anything and can lawfully have no information and consultation arrangements in place. However, it will be vulnerable to a request at any time and may want to take control by initiating negotiations to put arrangements in place.

Q How can an employer be forced to start negotiations by its employees?

A Unless the employer has a pre-existing arrangement in place, the regulations state that, on receiving a valid request from the workforce, the employer must establish information consultation procedures. For an employee request to be valid, it must be made by at least 10% of the workforce (subject to a minimum of 15 and a maximum of 2,500 employees). The request must be in writing and must be dated. It must not be made within three years of a previous employee request (or employer notification) that has resulted in either a negotiated agreement or a rejection of the request by the workforce. The regulations permit the requisite number of employees to submit individual written requests within a six-month time frame. The required 10% can therefore be built up over a six-month period.

Q How can a pre-existing arrangement affect whether or not an employer is required to start negotiations immediately?

A Where there is no pre-existing agreement, the employer must, as soon as is reasonably practical (but in any event within three months), begin negotiations for an agreement. However, where, at the date of the request, there is a pre-existing agreement in place and the request is made by at least 10% but less than 40% of the workforce, the employer may choose whether to commence negotiations immediately or to organise a ballot to determine if the workforce endorses the request. The request is endorsed if a majority of those voting and at least 40% of the workforce vote in favour of it. If not, the pre-existing agreement will continue and a further request cannot be made for three years.

Q Where the employer is required to start negotiating, with whom should the negotiations begin?

A The employer must, within three months, make arrangements for the employees to appoint or elect negotiating representatives. There are no pre-defined rules on how the representatives should be chosen, but employers must ensure that all employees employed in the undertaking can take part in the appointment or election of representatives and that all employees are represented during the negotiations. The employer should then inform the employees who has been elected or appointed and invite the representatives to negotiate. Negotiations may last up to six months, starting three months after the notification request was made. This period may be extended by agreement between the employer and the negotiating representatives.

Q What happens if the employer and employees cannot reach an agreement?

A Where the parties have negotiated, but have not reached agreement nine months after a valid request was received, there are statutory standard information and consultation provisions that will apply. Generally, it is in the employer’s interest to try to avoid these provisions being deemed to apply as they are prescriptive (for example, regarding the number and election of representatives) and lack the flexibility of pre-existing agreements.

Sarah-Marie Williams,
Solicitor, employment team,
Clyde & Co

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