Works councils

Over the past few days, our e-mail systems have been awash with messages of
support to those in New York and Washington. In years gone by, any work-related
communications would not have been so "touchy feely" – it proves we
are in a different world. Prior to the advent of European legislation, the only
time UK businesses had any obligation to talk to staff was when it had trade
unions with collective bargaining rights.

Background

The first European obligations to consult and notify employees came in relation
to collective redundancies and Tupe transfers. In the former, the legislation
(as interpreted by the EC3) provided that where employers did not recognise
independent trade unions, they would have to consult with elected employee
representatives where there were 20 or more redundancies within a period of 90
days or less. Similarly, where there was a Tupe transfer, the employer had to
consult with elected employee representatives, where no trade unions were
recognised.

Since then, this revolutionary concept has grown in health and safety areas,
in relation to working time and, most clearly, with the European Works Council
directive.

Domestic works councils

Political agreement has now been reached on a national-level Works Councils
directive. It must now be given a second reading by the European Parliament,
who may propose amendments. After a conciliation procedure, the final adoption
of the directive is expected towards the end of this year, or early in 2002.

The UK will have three years from final adoption to implement (ie, until
late 2004 to early 2005). The compromise reached in June 2001 means the
directive will only apply in the first instance to employers with 150 or more
staff. It will then be brought into effect after two years into businesses with
100 employees or more, and after a further two years, to those with 50
employees or more. As with the trans-national Works Councils directive,
employers are given significant flexibility to agree their own arrangements,
with a set series of legal obligations to comply with if they do not agree
their own rules with their staff. The legal obligations are onerous: employees
are to be given a right to be informed about the economic situation of the
business, informed and consulted about employment prospects and consulted with
a view to reaching agreement about decisions likely to lead to substantial
changes in work organisation or contractual relations, including redundancies
and transfers. In short, it will be a revolution for many employers in the UK.

All firms with 150 or more staff should put this issue on the HR agenda – if
not that of the board. Companies need to consider how to set up procedures
which give them maximum flexibility, while complying with the basic obligations
of the legislation to come.

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