Information and consultation: practical points
Introduction
When considering how best to approach the requirements of the Information and Consultation of Employees Regulations 2004 there are a number of practical points that should be taken into account.
Pre-existing agreements
As is explained in Lewis Silkin's previous topic of the week articles on the Information and Consultation of Employees Regulations 2004, there is an advantage for employers in having a pre-existing agreement in place prior to receipt of a valid employee request, as the percentage of employees required to trigger the requirements of the Regulations increases in practice from 10% to 40%. However, there are some additional practical advantages.
Categories of information
The standard provisions: There are three categories of information that an employer must provide to elected information and consultation representatives under the standard provisions. In addition, the employer must consult, as well as inform, on the second and third categories. The three categories are:
information on the 'recent and probable development of the undertaking's activities and economic situation', for example the launch or discontinuation of products or services, takeovers and mergers, changes in senior management and the company's financial situation;
information on the 'situation, structure and probable development of employment within the undertaking and on any anticipatory measures envisaged, in particular where there is a threat to employment within the undertaking', for example possible recruitment or redundancies and any plans to redeploy or retrain affected employees; and
information on 'decisions likely to lead to substantial changes in work organisation or in contractual relations', for example changes in work patterns or disciplinary and grievance procedures and changes to an occupational pension scheme.
Pre-existing agreements: Under a pre-existing agreement, the employer is free to determine the subjects on which it wishes to inform and consult with its employees and is not constrained by having to inform and consult on the potentially wide range of issues that could come within the three categories set out above.
Confidentiality
The standard provisions: Under the standard provisions (and indeed under a negotiated agreement), there are specific rules in the Information and Consultation of Employees Regulations 2004 allowing an employer to place an obligation of confidentiality on the information and consultation representatives to prevent them disclosing certain information. In addition, the employer can withhold information from the representatives if disclosing the information would seriously harm the functioning of the undertaking, or be prejudicial to it. However, specific provisions allow the representatives to challenge the imposition of the obligation of confidentiality or the withholding of information before the Central Arbitration Committee (CAC). This could lead to the employer facing a fine of up to £75,000 (although this is not payable to the representatives or the employees).
Pre-existing agreements: If an employer has a pre-existing agreement in place it can determine what it deems to be confidential information and employee representatives have no recourse to the CAC to challenge that determination.
Moratorium on further requests
Where there is a pre-existing agreement in place and a request under the Information and Consultation of Regulations 2004 is made by less than 40% of employees, the employer can either accept the request and enter into negotiations, or force a ballot of all employees to see whether 40% of them and a majority of those voting support the request. If the 40% threshold is not reached, the pre-existing agreement will remain in place and the employees will be prevented from making a further request within a three-year period (except where material changes in the organisation during that period mean that the agreement no longer covers all the employees in the undertaking or can no longer be considered to be approved by them).
Methods of informing and consulting
The standard provisions: The standard provisions require that an employer must ensure that an appropriate number of information and consultation representatives are elected - one per 50 employees up to a maximum of 25 -and that those representatives are informed and consulted on the requisite information. It is therefore envisaged that some form of employee forum/works council needs to be created.
Pre-existing agreements: Where a pre-existing agreement is in place there is no requirement for any particular method by which the employer must inform and consult its employees. Therefore, while an employee forum might be appropriate, an employer with a pre-existing agreement could as an alternative inform and consult its employees by means of group meetings, e-bulletins or newsletters, intranets, bulletin boards or employee briefings, or a mixture of some or all of these.
Deciding what to do
The key points that an employer needs to consider when deciding whether to set up a pre-existing agreement or wait for an employee request are as follows:
Is a 10% employee request likely? Trade union activity/existing industrial relations/morale; and degree of staff turnover should be taken into consideration.
Is it likely that a sufficiently flexible negotiated agreement could be agreed with representatives following a successful employee request?
Is it likely that there will be buy-in for a pre-existing agreement from management, and indeed employees, given the time and resources needed to commit to setting one up?
Is there concern over the categories of information that must be provided to representatives under the standard provisions?
Is there concern about the uncertainty of what amounts to confidential information under the standard provisions?
After 6 April 2005
Although the Information and Consultation Regulations 2004 come into force on 6 April 2005, employers are not required from that date either to set up new information and consultation arrangements or to change their existing ones. The obligations placed on employers by the Regulations are triggered only if 10% of their employees make a formal request on or after 6 April 2005. An employer must also employ the requisite number of employees: 150 or more. Transitional provisions apply for employers with 100 or more employees and those with 50 or more. These will not be affected until 6 April 2007 and 6 April 2008 respectively.
An employer can set up a valid pre-existing agreement after 6 April 2005 so long as it has not received a prior valid request under the Regulations from the requisite number of employees.
Timing after a valid request
If a valid employee request is made and there is no pre-existing agreement in place, the employer has up to three months from the employee request to elect negotiating representatives, and then six months to negotiate an information and consultation arrangement. This six-month period can be extended with the agreement of both parties. If no agreement is reached the employer has six months in which to elect information and consultation representatives before it is required to inform and consult under the standard procedure.
Employee forums
If an employer decides that it wishes to set up an employee forum in order to comply with its requirements under the Information and Consultation of Employees Regulations 2004 (whether under a pre-existing agreement or as a result of a valid employee request), some consideration should be given to the following points.
How are the different group of employees going to be represented at the forum? Should representation be along departmental, divisional, shift or geographical location lines? Is it appropriate to have proportionate representation of women, ethnic or religious minorities or part-timers on the forum?
Who is going to run the elections? Are there in-house facilities? How will multi-site elections work?
How can the representatives be trained and supported to do their job properly? How will they report back to the employees they represent? How will time be allocated to representatives to enable them to perform their representative role effectively?
Will the information and consultation process be run by HR? If so, is there sufficient management buy-in?
Is any corporate activity, such as a planned acquisition, likely to influence timing?
How will the forum relate to other bodies on which employee representatives sit, for example those in place for the purpose of transfers of undertakings or collective redundancies?
Has due consideration been given to the meaning of 'information' and 'consultation' and is there awareness of their meaning throughout the organisation?
Next week's article will be the first of four looking at the requirements of the Road Transport (Working Time) Regulations.
Sean Dempsey is a solicitor in the employment law department at Lewis Silkin (Sean.Dempsey@lewissilkin.com)
Further information on Lewis Silkin can be accessed at www.lewissilkin.com
