Is HR ready for the Information and Consultation Directive?

Roisin
Woolnough looks at what the legislation’s implementation will mean for
employers and the HR department

The
Information and Consultation Directive becomes law next March, but most HR
departments are unprepared for its implementation.

A
survey of almost 400 companies by law firm DLA and Ashridge Business School
found that 80 per cent of respondents have little awareness of the legislation.

Furthermore,
only 41 per cent intend to take early action, despite 71 per cent of them
saying there are strategic advantages to doing so.

The
survey finds that small and medium-sized businesses are the least prepared,
although companies with less than 150 employees are exempt from the legislation
until 2007, and until 2008 for those with less than 100 staff.

Neil
Bentley, head of employee relations at the CBI, agrees that smaller
organisations are falling behind, although he says they are starting to think
about what they need to do to comply.

He
says many are waiting for the Government’s guidelines to be published this
summer. “A lot are waiting for that – but our message is that it’s much better
to get something set up now, because that way, employers have further
protection.”

When
the legislation comes into force, employers will be required to establish a
consultative body if 10 per cent of their workforce demand it.

But,
if HR has already introduced a consultative framework before March 2005, then
40 per cent of the workforce has to object to a company’s consultative process
to effect any changes.

According
to Ben Willmott, employee relations adviser at the Chartered Institute of
Personnel and Development (CIPD), companies have much more flexibility if they
comply of their own accord.

“If
companies want a consultative framework that suits the structure of their organisation,
they need to look at it now,” he says. “Otherwise, they are likely to have the
default model – a works council – imposed on them.”

Willmott
advises HR professionals to audit their employee involvement mechanisms already
in place. “Then look at what you as a business want to achieve through the
directive and how you are going to get there,” he says.

He
highlights training as a top priority, both of staff representatives and
managers. Consulting with employees in a meaningful way entails a significant
cultural shift for many organisations, so the education process needs to start
early, he said.

Another
issue for HR, according to Willmott, is how unions and staff bodies work
together. “You need to ensure union representatives are happy to work with
staff representatives,” he said. “If not, you need a twin-track approach with
two representative routes.”

For
some companies, complying with the legislation means tweaking existing
arrangements. Martin Hinchliffe, HR director at Welcome Break, says he is examining
his company’s processes to ensure they are sufficient.

“We
already have some consultation processes in place in the form of committee
meetings,” he said. “We plan to expand the duties and role of that group.”

He
thinks the committee meetings, attended by elected staff representatives,
already provide an important consultative and advisory role.

But
other organisations believe there is little need for such bodies. “We have
considered it and looked at it periodically over the past three years,” said
Keith Luxon, HR policy and reward director at the Laurel Pub company.

“Our
view is that because of the nature of our business, it is not an issue for our
employees. Plus we have a good relationship with our trade union, so we speak
to them regularly,” he said.

Luxon
believes the majority of his HR peers are of the same opinion. As a result, he
thinks the survey findings are probably right. “Eighty per cent is probably
bang on the mark.”

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