Cutbacks are on the increase in a diverse range of sectors, and speed is of
the essence. HR has a line to tread between commercial realities and the
requirement to inform and consult the workforce. Are the two at odds with each
other – or is consultation tied in with business necessity? Compiled by Lucie
HR director, Marks & Spencer
I don’t think there is a conflict now if restructuring is handled well but there
has been a conflict in the past. When consultation first came in firms
concentrated on the legal elements of consultation rather than talking to
At Marks & Spencer we have learned from experience. We’ve learned that
consultation works well when we are looking to balance our commercial and legal
needs. Individuals have become engaged and involved in ensuring that we make
the right decisions for the business. So it really can add value if done
properly because it stops organisations making mistakes.
We’ve got what we call our business and involvement groups so involvement
and discussion is a normal part of our practice. For example, if we restructure
a department, before we get to the point where we make formal announcements
about it, we informally tell people where we need to be and use their ideas to
help us shape our proposals. Then we present our proposed solution, but it is
very much a proposal; we then get into the legal process of electing
We try to make the legal procedures as informal and user-friendly as we can.
If you’re not prepared to shift your view then you are merely paying lip
service to consultation. The challenge, therefore, is to create an environment
where it is a two-way discussion.
It sounds a very lengthy process and we have learned that it can take too
long. One of the answers is to manage people’s expectations from the outset and
involve people as early as you can. Also, set out clear parameters about what
can be consulted on and agree clear time-scales about where you want to be and
We have recently embarked on a joint venture with one of our suppliers and
for the first time used voluntary redundancies. But from start to finish the
consultation and decision-taking took six weeks.
There have been examples where our leadership team might have handled
consultation very differently but Marks & Spencer takes the view that
consultation is good for the business.
HR director, Vauxhall
The problem is the need for
consultation has no time limit – in people’s minds it only ends when the
decision to make redundancies is reversed. However, the need for commercial
action does have time limits. It is important when embarking on consultation to
clarify what the commercial timings are and accept there will be conflicting
objectives. There is an added complication in that consultation is always
referred back to European-level decisions. The dilemma is that local
consultation can only deal with the "how" of the decision. The
"why" is taken at a European level and commercial imperatives mean it
is difficult to challenge these fundamental decisions. If it’s a big enough
decision there isn’t going to be an alternative.
There has been a gradual improvement when it comes to
consultation in the UK. But there is an issue around the control of
Nonetheless, we have completed the consultation at Vauxhall and
the plant shuts in five months. We had hoped not to make any compulsory
redundancies and we believe we can do it by dint of good management.
National organiser for manufacturing, TGWU
Generally speaking, in the UK
companies inform but don’t consult. They only consult the workforce on how the
redundancy is going to go forward. It’s a very big issue and we have it daily
where businesses make their decisions and then notify the trade unions. In
contrast to the rest of Europe if a company doesn’t want to act in a socially
responsible way, they can act in an irresponsible way.
Elsewhere in Europe these issues are discussed so that people
are broadly aware of the state of the business and can help find better
solutions. I see no contradiction between proper consultation and the
commercial requirements of the business.
In companies that do consult with us beforehand we are able to
have a discussion that can lead to a decision not being as severe as it would
have been and the viability of the business can be improved.
President, Socpo and programme change director, City of Bradford MDC
It’s important that we follow the law,
but if we’re involved in the difficult process of redundancies it’s right to
follow the correct consultation process. It doesn’t take a huge amount of time
in the modern world of e-communications. It’s easy to consult the workforce by
e-mail, it doesn’t all have to be done by pulling everyone together.
But there should be no surprises in this consultation. We
should be consulting with staff beforehand to tell them that talks are about to
happen and decisions made.
I see no reason why it shouldn’t always be possible to consult
widely about these decisions in the public sector. And we have become better at
dealing with redundancies because we now have so much experience. In the 1990s,
local authorities were constantly involved in downsizing and we have become
quite adept at it.
Former chief executive of the Viyella division, Coats plc
In reality the need to act quickly
can be overstated. It is unusual to have an emergency where you suddenly need
to do something and consultation holds things up.
What is more of an issue is the sequencing, particularly
relating to confidentiality. Firstly, there are the conflicting
responsibilities, for example, between consulting workers and issuing price
sensitive information to the Stock Exchange first. Then there is the problem of
how to handle rumours. This was a dilemma Coats Viyella faced when it made its
closure announcements. It potentially had a significant price impact and our
legal advisers said we needed to talk to the Stock Exchange first.
With the UK bed ware sale I decided that we could and should do
a consultation. Although under stock exchange rules we were obliged to announce
the detail and timings to the Stock Exchange first, I took the view that the
deal had not been completed and so started a Tupe consultation.