Sue Ashtiany, Nabarro Nathanson

PREVIOUS SPEAKERS:

Sue Ashtiany,
Nabarro Nathanson

Industrial Law Society One Day Spring Conference
Saturday 14 May 2005

Title: "Collective Communication - Collective Consultation : The Employer Perspective "

1. INTRODUCTION AND BACKGROUND TO THE NEW LAW

1.1 European Framework Directive 2002/4

Sets out minimum requirements for “undertakings or establishments”
Practical arrangements “in accordance with national laws and practice”
Spirit of cooperation with due regard for reciprocal rights and obligations

1.2 UK Government Response

High performance Workplaces – July 2002
Regulations I July 2003
Regulations II and Guidance – July 2004
The Information and Consultation of Employees Regulations 2004 (Statutory Instrument 2004 No 3426, made on 21 December 2004) & the DTI Guidance, January 2005
Implementation commenced – 6 April 2005

1.3 Nabarro Nathanson Research

Consulting your Staff – A New Era: Surveying the Readiness of UK Business (Nabarro Nathanson, 2004)
Key Findings of the Research

2. AN OVERVIEW OF THE NEW LAW

The Regulations apply to public or private ‘undertakings’ (meaning legal entities including companies, co-operatives or partnerships) which carry out an “economic activity” whether or not operating for gain. Principles will also apply to Government departments. Their effective dates are:

6 April 2005 for undertakings with 150+ employees
6 April 2007 for undertakings with 100 – 149 employees
6 April 2008 for undertakings with 50 – 99 employees

2.1 Reaching a Pre-Existing Agreement (PEA)

In the absence of a valid pre-existing agreement, a request for the establishment of an information and consultation procedure by 10% of employees (subject to a minimum of 15 employees, and a maximum of 2,500) will trigger a range of new statutory obligations. The employee trigger can span 6 months and may be made directly to CAC or employer. (Regulation 7)

Having a pre-existing agreement (or agreements) in place will give employers the best chance of protecting themselves from the statutory provisions. This is because only an agreement of this kind can assist in defeating an employee campaign to require the employer to have default, legally binding statutory information and consultation arrangements set up under the Regulations. (Regulations 8 and 9)

2.2 Elements of PEAS

Must be

In writing;
Cover all the employees in the undertaking;
Have been approved by all the employees;
Set out how the employer will give information to the employees or their representatives and seek their views on such information.

May be:

One or more agreements
Combination of recognition agreements and staff agreements

2.2.2 Employee Approval:

Methods by which employee approval of pre-existing agreements could be demonstrated, would include support by:

A simple majority among those voting in a ballot of the workforce;
A majority of the workforce expressing support through signatures. This may be more appropriate in smaller organisations; or
The agreement of representatives of employees who represent a majority of the workforce.This would include officials of independent trade unions in workplaces with a recognised union or other appropriate representatives of employees.

It is permissible for different agreements covering different parts of the workforce such as different establishments to be approved separately, and in different ways and at different times from each other; agreements covering employees in more than one undertaking may be approved by those employees together, or separately by the employees in each of the undertakings covered.

A pre-existing agreement can remain in place until further notice. It is not time limited.

2.3 Employee Trigger

Where there is a valid pre-existing agreement, for the statutory provisions to be activated, the trigger must:

EITHER be by more than 40 % of all employees;
OR (provided the employer exercises his option to hold a ballot) more than 40% of the employees in the undertaking AND a majority of those who vote, must endorse the employee request by voting for it.

NB: Employer must notify that it is holding a ballot within 1 month

2.4 The Statutory Negotiation Obligations (Regulations 11, 14 and 16)

These will apply if the employee trigger is not defeated. An employer may also CHOOSE to adopt these requirements. If a ‘Negotiated Agreement’ is reached, this will protect the employer from the imposition of the statutory default information and consultation obligations.

Note that in the later stages of the drafting process important changes were made to provide for these negotiation obligations to be complied with by a group of undertakings. In that case, any employer in the group whose employees have not started the process will have to initiate it. See section 4. The references to employees below will then be taken to be references to employees of all the undertakings to be covered by any agreement negotiated.

2.4.1 The statutory negotiation obligations are:

To make arrangements for employees to appoint or elect negotiating representatives. All employees are entitled to take part in the appointment or election and to be represented by a negotiating representative.
To inform the employees in writing of the identity of the negotiating representatives.
To invite the negotiating representatives to enter into negotiations on the terms of the proposed agreement. The negotiation period is 6 months (and may last longer by agreement).

2.4.2 A Negotiated Agreement must:

Set out the circumstances in which the employer(s) must inform and consult the employees;
Be in writing and dated;
Cover all employees of the undertaking(s);
Be approved EITHER by all the negotiating representatives signing, OR by a majority of them signing together with either 50 % of the employees (of the undertaking(s)) approving the agreement in writing or 50 % of those employees who voted approving it in a ballot;
Be signed by or on behalf of the employer(s); and
Provide EITHER for the appointment or election of Information & Consultation Representatives (‘ICE Reps’) OR for information to and consultation with employees directly.

Note that special provision has been included in the Regulations to allow for negotiated agreements that consist of different parts, with each part being separately approved and potentially providing differently for information and consultation.

2.5 The Default Information and Consultation Obligations (Regulations 18 – 20 and Schedule 2)

This is the set of statutory information and consultation requirements that WILL apply to employers where they neither defeat an employee trigger nor reach a negotiated agreement.

2.5.1 Setting up the default ICE arrangements:

Employers will be required to arrange a ballot of all employees in order to elect ICE Reps (subject to an exception providing for appointment where there are too few candidates).

There must be one ICE rep per fifty employees, up to a maximum of 25 and a minimum of two ICE reps.
An independent person appointed by the employer must supervise the ballot (the ‘independent ballot supervisor’).
The employer must consult with employees, or their representatives, about how the ballot is to be run.
The employer must publicise the final arrangements.

2.5.2 Scope of information and consultation duty:

THE STRATEGIC DIMENSION:
to provide information to the ICE Reps on the recent and probable development of the undertakings’ activities and economic situation.

THE WORKFORCE DIMENSION:
to provide information to, and undertake consultation with, the ICE Reps about 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.

THE WORKPLACE DIMENSION:
to provide information to, and undertake consultation, with a view to reaching agreement, with the ICE Reps, on decisions likely to lead to substantial changes in work organisation or in contractual relations.

2.5.3 The information must be given at such time, in such fashion, and with such content, to enable the ICE Reps to conduct ‘an adequate study’ and to prepare for consultation.

2.5.4 The consultation:

Its timing, method and content must be appropriate.
It must be on the basis of the information supplied by the employer and of any opinion expressed by the ICE Reps to the employer.
It must enable the ICE Reps to meet the employer at the relevant level of management and to obtain a reasoned response to the ICE Reps’ opinion.

2.5.5 Varying default arrangements:

It is important to note that the employer and ICE Reps can still reach an agreement varying the default information and consultation obligations. But this must:

Set out the circumstances in which the employer must inform and consult his employees.
Be in writing and dated.
Cover all employees of the undertaking.
Be signed by or on behalf of the employer.
Provide either for the appointment or election of Information & Consultation Representatives (‘ICE Reps’) or for information to and consultation with employees directly.
Be signed by a majority of the ICE Reps.

3. INFORMATION & CONSULTATION REPS

3.1 Confidentiality

There is a statutory non-disclosure duty on existing or past negotiating reps, ICE reps or any expert assisting such reps, where, pursuant to a negotiated agreement or under the standard provisions, an employer has entrusted them with information in confidence. (Regulation 25)

However, those to whom the information has been given can contest its confidentiality before the CAC. If the CAC considers that the employer’s action was not reasonable on the grounds that disclosure would not, or would not be likely to, harm the legitimate interests of the undertaking, it may make a declaration to that effect. Thereafter the information will not be considered confidential.

Employers are entitled to withhold information that would, according to objective criteria, seriously harm the functioning of the undertaking or be prejudicial to it. (Regulation 26)
Disputes are to be dealt with by the CAC. If the CAC finds that the criteria for withholding information have not been met, the remedy is an order for disclosure which will specify the terms on which this is to take place.

3.2 Protection for Employee Representatives

Employees who are either negotiating reps or ICE reps are entitled to reasonable paid time off during working hours to perform their representative functions. Disputes regarding these rights will be dealt with by the Employment Tribunals. (Regulation 29)

The Regulations create a whole range of new types of automatically unfair dismissals designed to protect employees from being dismissed for taking advantage of the new law. (Regulations 30 and 31). These apply to ICE reps and also to ordinary employees in certain cases.

There are also new rights not to be subjected to “detriment” for reps and candidates.

3.3 Training

The Regulations do not make provision for mandatory training of staff to enable them to act as effective representatives. This is something, however, that came through as important on consultation, and there are various ways that the Government is supporting voluntary training initiatives.

3.4 Pre-Existing Agreements

The statutory confidentiality obligations outlined above do not apply to pre-existing agreements. Therefore employers must ensure that contractual provisions are in place.

4. GROUP STRUCTURES

An important change in the later stages of the drafting of the Regulations means that provision is now made for pre-existing agreements that cover employees in more than one undertaking to defeat an employee trigger. It appears that what will be needed is for:

1. The requirements for pre-existing agreements set out in 2.2 above to be met in relation to each undertaking covered by a group pre-existing agreement(s);

2. AND the ‘employee trigger’ to be by fewer than 40 % of all employees in the undertakings covered by the group pre-existing agreement(s);

3. AND either fewer than 40 % of employees in the undertakings covered by the group pre-existing agreement(s), or a minority of those who vote, to support the ‘employee trigger’ in a ballot.

5. DISPUTES AND PENALTIES

5.1 The role of CAC

Information obligations (e.g numbers)
Pre-existing agreements
Validity of triggers
Validity of employer notification
Appointment or election of negotiating representatives
Ballot to approve and negotiate agreement (Regulation 17)
Ballot to elect ICE representative (Regulation 19)
To comply with terms (Regulation 22)
Confidential information (Regulation 25)

5.2 Employment Tribunals

Right to time off
Unfair dismissal
Detriment (Regulation 32)

5.3 Employment Appeal Tribunal

Appeals from CAC and Employment Tribunal
Penalty notice (Regulations 22 and 23)

5.4 Matters to be taken into account include:

Gravity of failure
Period of time
Reason
Number of employees affected
Number of employees employed

Back to the top

PREVIOUS SPEAKERS: