Information and consultation obligations


Q Is it right that I will soon have to consult my employees about business decisions?

A Heralded by the TUC as ‘potentially the most significant piece of employment legislation ever to be introduced in the UK’, the European Union Information and Consultation Directive seeks to involve staff to an unprecedented extent in the internal decision-making processes of businesses.

The directive will be implemented in the UK through the Information and Consultation Regulations, which are set to come into force later this summer.

The regulations will affect businesses at different times, depending on their size, as follows:

– More than 150 employees: 23 March 2005

– More than 100 employees: 23 March 2007

– More than 50 employees: 23 March 2008.

Q What will the regulations require me to do?

A You must establish ‘Information and Consultation Procedures’ if you are asked to do so by a proportion of your workforce.

If your workforce makes a valid request for you to set up the procedures, you will have to negotiate the practical arrangements with the employees, unless you already have equivalent procedures in place, which are then approved by the workers.

You may even take the initiative yourself to open negotiations with a view to setting up procedures.

Q What is a ‘valid request’?

A For a request to be ‘valid’, it must be made in writing by 10 per cent of your employees, subject to a minimum of 15 and a maximum of 2,500.

Q What happens next?

A Once a valid request has been made, you have six months to reach agreement with the workforce.

Q What happens if we cannot reach an agreement?

A Where you cannot reach agreement within that period, the following ‘default provisions’ in the regulations will apply:

– You will have to set up a committee to represent all employees in your undertaking, with employee representatives elected by the workforce

– You must provide the committee with ‘information’, and ‘consult’ about defined matters.

Q How does the information and consultation process work?

A You will have to provide certain information to the committee about:

– The recent and probable development of your activities and economic position

– The employment position within your business and any measures you envisage, particularly where there is a threat to jobs; and

– Decisions likely to lead to substantial changes for workers, including collective redundancies and business transfers.

The information must be provided in a suitable way, and far enough in advance to enable meaningful consultation to take place.

You must then consult the committee about those matters, ensuring at all times that the level of management involved, the timing, method and content of the consultation are all appropriate.

Q What does ‘consultation’ mean?

A The draft regulations say that ‘consultation is an exchange of views and the establishment of dialogue between you and the representatives’. You do not therefore have to reach an agreement, but you must aim to do so.

Q Some of the information will be extremely confidential, and its disclosure may harm my business. What can I do about this?

A The regulations contain important confidentiality exclusions, which allow you to either not disclose information at all where it would be prejudicial to your business, or at least prevent the representatives disclosing it to the workforce.

Q How will the regulations affect arrangements I already have in place?

A Where you already have a consultation mechanism in place, but the workforce makes a valid request, you can arrange a ballot of all employees to either endorse or reject the request.

Only if 40 per cent or more of your employees endorse the request, you are obliged to negotiate practical arrangements for a new committee.

Alternatively, you can seek to rely on the pre-existing structure, provided that it covers all employees and was not imposed by you without any discussion with employees.

The advantage of having a procedure in place before you receive a formal request is that you can tailor it to your business, and then rely on that procedure if you then do receive a request.

As a result, many employers are considering putting procedures in place from now.

Q What happens if I ignore a valid request?

A An employee representative can make a complaint to the CAC (Central Arbitration Committee). You might then find that you will have procedures imposed on you instead – and, of course, you might also find yourself with a disgruntled workforce.

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