Is consultation the Achilles heel of UK staff relations?

The
Rover and Vauxhall job losses pushed the Government into its recent announcement
that it will review consultation with staff over large-scale redundancies.

This
review (News, 23 January) has been linked to the controversial EU draft
directive on information and consultation at a national level ñ a proposal that
has been fiercely opposed by both employers and the Government.

But
reviewing and reforming consultation practice will not create more jobs or stop
large-scale plant closures.

Underlining
the debate is a generally held view that consultation is weaker in the UK than
in other EU member states and, as a consequence, large-scale redundancies are
both cheaper and more frequent in the UK than in other countries. 

Consultation
is being used as a cipher for the continuation of an argument that is
ultimately about the degree and responsibility of countries to legislate or interfere
in the operation of the labour market. The current restructuring in the car
industry has been expected for some time and is a consequence of the
globalisation of that sector. The implications of that process for
manufacturing within the European car market have led to significant
restructuring.

But
as the evidence from other member states with more stringent consultation
requirements shows, tougher consultation laws will make closure of plants a
more complex, time consuming and lengthy process but will not, however, stop
the final closure of a plant with resultant job losses. For all the talk at the
time with banner headlines, strikes and political intervention, Hoover closed
its factory in France and moved the jobs to Cambuslang in Scotland and Renault
closed its car plant in Vilvoorde in Belgium.

Consultation
is about communication ñ an issue of critical importance for companies. A
well-informed workforce that is consulted on the issues that directly affect it
is a motivated workforce that provides real benefits for the organisation it
works for. Successive surveys have shown that a variety of methods can create
improvements. To be effective the information and consultation processes in a
company need to be aligned to the needs and practices of that company. To put
it crudely, one size does not fit all.

The
opposition from the UK to the EU’s general framework for information and
consultation has focused on the belief that the draft directive would impose an
alien "works council" type structure in all UK companies. It is not
surprising that a European Commission-drafted proposal on information and
consultation should reflect a system that is prevalent in the majority of other
member states. However, given that the EU proposal is to create a general framework
for informing and consulting employees there is no reason why the final text of
an EU proposal should simply impose a works council structure on every member
state. 

Amendments
to the draft directive increasingly place the onus on member states to
determine the way in which different aspects of consultation will occur.
Assuming this process of devolving issues for member states to make decisions
continues, then, if the draft directive is ever adopted, the real debate will
occur in the UK.

Whatever
the process, HR professionals will wish to ensure that any resultant UK
legislation reflects the existing diversity of practice and is not a
straitjacket. Even if formal political agreement, known as a "common
position", was reached by member states on the EU Directive now, the
earliest UK law would be introduced that affected companies would be 2004. A
later date is more realistic.

The
right of employees to be informed and consulted on decisions that affect them
is contained within the 1989 Social Charter, now incorporated into the treaties
and fully supported by the UK. Whether we like it or not, the issue of
consultation will not go away. However, no one should be under any illusion
that strengthening consultation laws will stop large-scale plant closures or
reduce unemployment.

By
Peter Reid,  European employee relations
adviser, working for PRC

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