Legal clinic

The
DTI plans to implement the EU directive on information and consultation by
April 2005. But, says Gary Freer, the draft ‘ICER’ regulations pose more
questions than they answer. To avoid problems employers must act now

The
DTI is tasked with bringing before Parliament draft legislation on implementing
the EU Information and Consultation Directive. Known as the Information and
Consultations (‘ICER’) regulations, the DTI intends that they take effect on 23
March 2005, and preparing for that date should be high on every HR
professional’s agenda.

Businesses
should also expect a deluge of invitations to seminars on this subject from
employment lawyers – unless the DTI clarifies some fundamental issues.

So,
what will employers have to ‘inform’ and ‘consult’ about?  

The
draft regulations have repeated the words of the EU directive – and under the
so-called ‘Default Model’ (which is to be used in the absence of any voluntary
agreement) will be about ‘decisions likely to lead to substantial changes in
work organisation or contractual relations’.

What
will ‘substantial’ mean in this context? It is a relative and ambiguous term.
And which ‘contractual relations’ is it referring to? Does it mean the contract
of employment? If so, as seems likely, this surely includes pay and conditions.
Since employers will have to consult ‘with a view to agreement’, the Default
Model appears to require something which in practice will be very close to
compulsory collective bargaining. That would be a radical shift away from the
reforms of the 1980s, and something that many employers would wish to avoid.

When
would information have to be given and when would consultation have to begin?
Only when management has formulated a firm proposal, or at some earlier point
when the idea is merely being floated? Is the latter really in the workforce’s
interest, or would it simply unsettle them unnecessarily?

A
related question concerns the issue of how confidential information and trade
secrets are to be protected under the Default Model. While it is currently
proposed that employers will be able to resist passing on such information if
it would seriously harm the functioning of the business or be prejudicial to it
‘according to objective criteria’ (expect some test cases on what that means),
will this in practice be sufficient?

Most
employers will surely wish to avoid having to use the Default Model and will
prefer to set up a voluntary works council, or to adapt their existing
arrangements, and have them in place before the regulations come into force in
2005.

Guidance
is awaited on how employers are to demonstrate that their voluntary
arrangements have been ‘approved’ by the workforce.

Employers
need to be thinking now about the form they would like their voluntary
arrangements to take and how they will deal with the issues discussed above.
The must be able to move quickly once the regulations – and the guidance – are
finalised.

The
release of the draft regulations and statutory guidance is imminent.

Gary
Freer is a partner and the head of Barlow Lyde & Gilbert’s Employment Group.

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