Information and Consultation of Employees Regulations 2004: an overview

Sarah-Marie Williams of Clyde & Co begins a series of articles on the Information and Consultation of Employees Regulations 2004, which were recently extended to cover undertakings with 100 or more employees, with an overview of the legislation.

The Information and Consultation Directive (Directive 2002/14/EC) created a general framework for informing and consulting employees within the European Community and came into force in March 2002. The Directive was implemented in the UK by the Information and Consultation of Employees Regulations 2004, which came into force on 6 April 2005.

The Regulations set out minimum requirements in relation to employees' rights to information and consultation. The Regulations do not replace or consolidate the existing arrangements for collective consultation in the UK (including in relation to redundancies and transfer of undertakings) nor do they affect union recognition or European Works Council legislation.

Initially, the Regulations applied only to undertakings employing 150 or more employees in the UK , but were extended to cover those with 100 or more employees from 6 April 2007. Such employers are therefore advised to ensure that they are aware of the implications of the Regulations.

From 6 April 2008 the Regulations will be extended to undertakings with 50 or more employees.

Requests for information and consultation procedures

Unless there is a pre-existing information and consultation agreement in place, the Regulations state that, on receiving a valid request from the workforce, the employer must establish information and consultation procedures.

In order for an employee request to be valid, it must be dated and made in writing by at least 10% of the workforce (subject to a minimum of 15 and a maximum of 2,500 employees). The request must not be made within three years of a previous employee request or employee notification that has resulted in either a negotiated agreement or a rejection of the request by the workforce.

Pre-existing agreements

Employers may already have arrangements in place for consulting with their employees. These will constitute pre-existing agreements if they:

  • are set out in writing;

  • cover all the employees in the undertaking;

  • set out how the employer gives information and seeks views on that information from the workforce; and

  • have been approved by the majority of the employees.

    • Dealing with a valid request

    Where there is a pre-existing agreement

    Where, at the date of the request, there is a pre-existing agreement in place and the request is made by at least 10% but less than 40% of the workforce, the employer may choose whether to commence negotiations immediately or to organise a ballot to determine if the workforce will endorse the request.

    Under the Information and Consultation of Employees Regulations 2004, regulation 8(6), the request is endorsed if at least 40% of the workforce and a majority of those voting support the request. In such circumstances, the employer is obliged to seek to reach a negotiated agreement with the employee representatives.

    If less than 40% of the employees endorse the request, the pre-existing agreement will continue and a further request cannot be made for three years.

    Where there is no pre-existing agreement

    Where there is no pre-existing agreement in place, the employer must, as soon as reasonably practical (but in any event within three months), take the necessary steps to begin negotiations for an information and consultation agreement. These steps include:

  • making arrangements for the employees to appoint or elect negotiating representatives;

  • informing employees of who has been elected or appointed; and

  • inviting the representatives to negotiate.

    • Negotiations may last up to six months, starting three months after the notification request was made. This period may be extended by agreement between the employer and the negotiating representatives.

    Fallback procedure

    There is a standard information and consultation procedure that applies in certain circumstances. The procedure applies where the employer is under a duty to initiate negotiations for an information and consultation agreement and fails to do so, or where negotiations have been entered into but have not led to an agreement.

    Where the parties have negotiated, but have not reached agreement within nine months of receiving a valid request or notification (or such longer period as agreed), the standard procedure will be deemed to apply six months from the end of that time limit. Requirements under the standard procedure are wide ranging and it is in the employer's interest, where possible, to seek to avoid these provisions being deemed to apply.

    They include providing information and consultation representatives with information on:

  • the recent and probable development of the employer's activities and economic situation;

  • the situation, structure and probable development of employment within the business;

  • any measures envisaged to reduce or deal with threats to employment, such as possible redundancies; and

  • any decision likely to lead to substantial changes in work organisation or contracts of employment.

    • Disputes

    The Information and Consultation of Employees Regulations 2004, regulation 22 sets out arrangements relating to the resolution of disputes concerning the operation of a negotiated agreement or the standard information and consultation provisions. Complaints may be brought to the Central Arbitration Committee within three months of an issue arising.

    Confidentiality

    The Information and Consultation of Employees Regulations 2004 set out the circumstances that allow employers either to impose a confidentiality restriction on the information that they provide to information and consultation representatives or to withhold information on the grounds of confidentiality.

    How employers can be proactive

    As set out above, employers are required to set up an information and consultation procedure only in circumstances where at least 10% of the workforce has made a valid request. However, an employer may seek to instigate negotiations itself, without waiting for a request from its employees.

    For such an employer notification to be valid, it must be in writing, state that the employer intends to start negotiations and that the notification is being given for the purposes of the Information and Consultation of Employees Regulations 2004, and set out the date on which it is issued. In addition, it must be published in such a way as to bring it to the attention of all employees in the undertaking.

    It is advisable for employers to be proactive and trigger discussions on establishing appropriate information and consultation arrangements with employees.

    Many employers already have arrangements in place that qualify as a pre-existing agreement, or could be easily amended to do so. This is preferable to waiting until an employee request is made, as negotiated agreements are subject to very few, if any, prescriptive requirements regarding the subject matter of the information and consultation. Clearly, if an employer has no pre-existing agreement, it will be at a disadvantage if a valid request is received from its employees. In addition, the timescale for negotiating is short and employers will be relying on employee goodwill if the standard provisions are to be avoided.

    It is advisable for employers to have a framework strategy in place in case a valid request is received. Employers should note that it is not too late to put in place a pre-existing agreement, provided that no employee request has been received.

    Next week's article will be a checklist on the information and consultation procedures.

    Sarah-Marie Williams is a solicitor in the employment team at Clyde & Co (sarah-marie.williams@clydeco.com)

    Further information on Clyde & Co can be accessed at www.clydeco.com