Wider view of consultation needed before law changes

New research reveals the wider implications of staff consultation, and
reminds employers it should be more than just talks over job cuts. By Mike

Massive job cuts at companies like Corus, Marconi and Motorola have put the
issue of effective staff consultation high on the political agenda.

But ground-breaking research, released by the Involvement and Participation
Association last week, shows this is a much wider area than just handling
collective redundancies (News, 17 July). Employers must revisit their
communication processes to ensure they do not fall foul of the information and
consultation directive due to become law in 2003.

While the report claims many companies in the UK have improved staff
consultation procedures, it stresses many need to understand better the
business case for improved communication.

The IPA report provides a framework of good practice that employers can use.
It also includes an information and consultation audit that highlights the
strengths and weaknesses of a company’s consultative structure (see below).

Willie Coupar, director of the IPA, explained, "It is time to move the
political debate to a phase where practitioners are developing best

The report, Sharing the Challenge Ahead: Informing and Consulting with your
Workforce, claims that for companies to benefit, they need to involve employees
in tackling real business problems through appropriate and flexible structures.

Problem areas include the composition of consultative bodies,
confidentiality, defining information and consultation and how to handle
collective redundancies.

The report claims staff councils or forums work well as consultation
structures. It cites pharmaceutical company Astra Zeneca as an example of best

The company’s 10,000 UK staff are represented through joint consultation
committees at all of its sites, which meet regularly and are chaired by local
managers. They feed into a national joint consultation forum that meets twice a
year, which in turn feeds into a European consultation committee that meets

Richard Stokes, HR director, services and policy development, at Astra
Zeneca, said, "Our structure gives employees an important input into
significant business decisions and makes senior managers aware that they have
to defend the decisions taken."

There is also a need to define the difference between information,
consultation and negotiation, claims the report, and provide staff with the
information they need to understand the challenges facing the business.

Confidentiality is often a sticking point for senior management. The report
advises spelling out what information is confidential to employee

Blue Circle Cement, for example, demonstrated how sensitive business issues
can be discussed with staff effectively. It was taken over by French building
materials group Lafarge in a £3.1bn deal earlier this month. Staff support for
the deal was fostered through its consultative structure.

Shop stewards were kept informed about the takeover, and unions and
management made joint presentations to staff at each site about how they could
achieve the new company goals.

Mike Gibson, Blue Circle Cement’s national employee relations manager, said,
"With union reps on the platform, it was easier to get the message across
that Lafarge is a good company and things are looking good."

Unions at Blue Circle Cement are heavily involved in all aspects of the
business at local and national level, and are cited as another example of good

IPA’s report provides advice on the thorny issue of collective redundancy.
It calls for employers to treat consultation as a genuine discussion with staff
on how dismissals can be avoid-ed. Employers should try to reduce their number
and mitigate the effects.

Information and consultation structures are vital to improving
decision-making in difficult times. But Stokes says it takes more than
procedures and processes. Senior management has to support it. At Astra Zeneca,
the chief executive attends at least one national joint consultation forum
meeting a year and chairs the annual meeting of the European consultation

Mutual respect, trust, openness and honesty do not come easily, warns the
IPA report.

Mark O’Connell, HR director of Eurotunnel, believes training for managers
and staff representatives is essential. He said it is a "fundamental
challenge" to get the employers and staff to embrace the culture of

This week, Eurotunnel is piloting a two-day course for managers and staff
representatives to improve consultation skills, and is splitting the cost of
the course equally with the T&G union.

The IPA report is positive about the level of staff consultation that
already occurs in the UK, and is confident that the forthcoming directive will
be more about principles than a one-size-fits-all model of consultation.

David Yeandle, deputy director of employment policy at the EEF, who was
involved in the research, said, "I think the research has demonstrated to
a wider audience that consultation is alive and well in the UK. There are many
companies doing a lot of valuable good practice in this area.

"The IPA guidance shows that there are many different ways of achieving
the objectives of improving business performance that include employees.

"Consultation has to be something that fits in with your management
style, organisational structure and employee-relations culture," he added.


The IPA audit – questions employers must ask themselves

– Are the objectives of information and consultation clearly defined?

– Is there a shared understanding of the objective?

– Is the role of top managers clearly defined?

– Is the role of employee representatives clearly defined?

– Are the arrangements for information disclosure appropriate?

– Is the process of consultation appropriate?

– Are the consultative meetings effective?

– Is there effective feedback from consultative meetings?

– Is there effective training and development for consultation?

– Are there key links to other external activities?

– Is there a strong culture of information and consultation?

– Is there a regular process of review and evaluation?

Main points of EU directive

UK firms with over 150 employers have just three years to implement the EU
directive on information and consultation. It means that staff have to be
consulted in advance of any significant business change.

Those companies with more than 100 staff have five years, and those with a
workforce of more than 50 have seven years.

The CIPD claims that the EU directive will not transform the way UK
companies have to communicate with their workforce.

Diane Sinclair, CIPD adviser on employee relations, said, "The
directive clearly leaves the practical arrangements for informing and
consulting employees to be defined by the member states. Thus, much will depend
on the way that the directive is implemented in the UK.

"Given its persistent opposition to the proposal, and its abstention
from the final vote, it seems very unlikely that the UK Government will
‘gold-plate’ the directive.

"Indeed, it has already stated that it will take full advantage of the
flexibility allowed by the text, which it worked hard to negotiate."

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