PREVIOUS SPEAKERS:
Sarah Veale
Back
to list of speakers Title: "Your Voice at Work"
Paper for ILS Conference by Sarah Veale, Head of Equality and Employment Rights, Trades Union Congress UK
In 1995, the TUC published a booklet, “Your Voice at Work” . In the booklet, we made proposals for new rights for working people in three broad areas: a universal right to individual representation; a right to consultation by which 10 per cent of workers in union membership in an undertaking would trigger collective consultation rights, with a fallback provision for elections of representatives where there was no agreement on arrangements for consultation via the union; a right to union recognition where the majority of workers supported the proposition in a ballot or a survey, or automatic recognition where union membership exceeded 50 per cent.
The three proposals became identified as three rungs on a ladder, starting with individual representation, followed by consultation and with union recognition as the final stage. With the election of a Labour Government in 1997, rungs 1 and 3 were broadly achieved, albeit with provisos and caveats inserted at the behest of the CBI (for example, the right to recognition does not apply to undertakings employing fewer than 21 workers). The right to consultation existed already to a limited extent largely under EU Directives, for example on collective redundancies and transfers and on health and safety issues. There was, however, no general obligation to consult with the workforce until the EU Directive on Information and Consultation came into force. This was transposed into UK law on 6 April 2005 for undertakings employing more than 150 employees. This put into place the middle or second rung identified in “Your Voice at Work”.
The TUC’s approach in “Your Voice at Work” marked a radical policy departure for the TUC. Previously the strongly held view was that relations between employers and unions should be conducted on a voluntary basis. Our slogan was “keep the law out of industrial relations”. Then we had “negotiate don’t legislate”. These slogans reflected our view, powerfully endorsed by the Donovan Commission, that voluntary collective bargaining backed by a wide ranging immunity from the civil law were all that we needed for a powerful trade union Movement. The golden formula, as Professor Lord Wedderburn QC called it, had been an effective base for trade union growth – both in terms of membership and influence – although in retrospect, it had not helped us in organising in sectors where the threat of industrial action was not potent – small firms outside print, most of the private services sector, part timers and so on.
Today those slogans have a quaint, historical feel. The rise and rise of individual litigation, much of it requested by the trade union Movement either here or in Europe; the reduction in scope of the golden formula as it was qualified by a succession of Thatcher/Major employment laws; the employment laws of New Labour especially on minimum wages, recognition and unfair dismissal; the impact of the European Social Chapter; and the rise of race and gender awareness and the attendant legal rights – all these have changed the landscape.
The TUC nonetheless remains committed to the voluntary approach as the ideal for representation, consultation and recognition. There may be increasing pressure to review this approach however, depending on how the ICE legislation works in practice and on the development of other EU legislation where legally enforceable collective bargaining provides an effective alternative to prescriptive legislation in other EU member states. Examples of such legislation includes the Posting of Workers Directive and the putative Services Directive. There should be advantages to unions in the UK of moving in this direction. There would be disadvantages too of course; in particular, there would be far less incentive to join a union if you were legally protected by a collective agreement regardless of whether or not you were a union member.
As the subject of today’s conference is consultation rather than recognition or individual representation, my talk and this paper focus on the new consultation rights and how they are likely to fit into existing systems.
Existing consultation requirements
Under existing legislation, consultation must take place with workforce representatives on collective redundancies and transfers, health and safety issues and pensions. It can also take place on aspects of the Working Time Regulations and the Parental Leave Regulations. In addition, European Works Councils (EWCs) must be established in undertakings employing more than 1000 and operating in at least two states in the European Economic Area. The new Information and Consultation legislation (ICE) now makes it obligatory where more than 150 are employed for employers to inform and consult systematically on developments likely to affect working conditions – see below.
From a TUC perspective, one important feature of existing consultation measures is that following a ruling in the ECJ in 1994, they must apply equally to employers that do not recognise unions. In such situations employers must make provision for the workforce to elect representatives with whom consultation must take place. The new ICE Regulations will relieve many employers that do not recognise unions of the necessity to organise elections under the various statutes that require consultation, as the ICE representatives will be able to perform this function. That said, there is not much evidence of such arrangements being made in non-union undertakings until the ICE legislation came onto the horizon and there have been few tribunal cases involving non-union representatives or employees complaining about not having been given the opportunity to elect representatives. It appears that collective consultation mainly occurs where there is a union recognised. It is unlikely that employees in non-union firms will have much awareness of their rights in this regard so it may be the case that employers in non-unionised firms consult directly with those individuals affected but do not consult on a collective basis – or indeed may not consult at all.
The policy drift in the UK has been in the direction of encouraging individual consultation as well as non-union collective consultation. Thus regulations on health and safety, pensions and now information and consultation allow for direct consultation with employees individually. This has been actively encouraged by employers’ organisations whose attitude seems to be that they will either conduct relations with a recognised union, preferably on a voluntary basis, or they will provide for direct consultation. There does not appear to be much appetite for non-union collective consultation. All this may change though with the advent of new obligations to inform and consult, notwithstanding the provision in the ICE Regulations for individual consultation. The remainder of this paper considers the new ICE Regulations, which have great potential to give employees a voice at work. Two questions will intrigue employment relations analysts, employers and unions in the next few years. The first question is whether the legislation will make any difference. The second question is whether any additional “voice” created will be via unions, non-union collective representation or individually.
The TUC’s approach to the EU Directive on Information and Consultation
The TUC was anxious to safeguard existing arrangements where they were working well and to use the new laws to build on our partnership approach to employers. The best way to ensure that an effective and much needed new employment relations settlement was achieved was for Government, employers and unions to view the new legislation as providing great partnership potential, rather than seeing it as a threat. Seeing it as a threat was not a view confined to employers: for some in the union Movement, the Directive is viewed anxiously as having the potential to undermine existing collective bargaining arrangements or to establish new non-union structures.
The negotiations between the “Social Partners” (TUC, CBI and Government) began in February 2002 and continued until July 2002. A Framework agreement was reached which reflected agreements and disagreements between the TUC and the CBI but meant that the subsequent Regulations had broad support across industry.
What must be provided as a minimum?
Employers are obliged to inform on the “recent and probable development” of the undertaking’s or the establishment’s activities and economic situation. They are obliged to inform and consult on the situation, structure and probable development of employment and any “anticipatory” measures envisaged in the event of a threat to employment and on decisions likely to lead to substantial changes in work organisation or contractual relations. The timing, content and method must be “appropriate” and must be discussed at the relevant level of management and worker representation. Workers’ representatives must be supplied with “relevant” information by the employer, allowed to formulate their views and to receive a response from their employer. Where work organisation or changes in contracts are at issue the process should be “with a view to reaching an agreement”.
The UK Regulations apply to “undertakings” rather than “enterprises”. This allows for much greater coverage in the public sector. The introduction of the new legislation will be staged, so that it will only apply to undertakings that employ more than 150 in 2005, then those employing more than 100 in 2007 and finally those employing more than 50 in 2008. Undertakings employing fewer than 50 will not be affected at all by the Directive. The TUC regrets this. Small firms tend to have much greater employment relations problems, partly because they are less likely to have human resource departments and much less likely to recognise unions. Small firms have disproportionately high numbers of claims against them in the Employment Tribunals. We would argue that the need for Regulations on information and consultation are far greater in small firms. We also regret that the Regulations will only cover “employees”, that is, those with contracts of employment. Casual workers and those employed through employment agencies will be excluded. The Regulations will also permit employers to count part time workers as “half people” for the purposes of calculating the threshold.
The “Trigger” Mechanism
Although the new legislation will require employers to inform and consult systematically with their workforce, in the UK they can do this in whatever way they choose – indeed unless employees use the trigger mechanism to complain, they can do nothing. The trigger mechanism allows a challenge to be made by employees where the employer has failed to set up a system for information and consultation or has set up one which they do not support. Ten per cent of the employees in the undertaking have to support the trigger if the challenge is to proceed. The Central Arbitration Committee (CAC) will be the enforcing authority. They will check when the trigger is pulled to ensure that it has the required 10 per cent support. If it does, if there is no system in place, the employer must negotiate a procedure with elected representatives of the workforce. There is a “default” minimal procedure in the Regulations though it is open to the parties to negotiate a different procedure. The negotiated procedure must have the support of all the negotiating representatives, or the support of the workforce indicated in a ballot or by means of a petition. The system can be union recognition, with provisions for information and consultation, or could be a mixed system, with some union representation and some non-union. It must be permanent and cannot be challenged again for three years.
Where there is already an information and consultation system, the employer can opt to hold a further ballot of the workforce. If fewer than 40 per cent support the challenge, it fails. If 40 per cent or more support the challenge, the employer must negotiate a new agreement with elected representatives of the workforce. The TUC supported the concept of a trigger for two reasons. Firstly, it will ensure that if there is a challenge to an existing system which is union supported, or a union agreement, it would have to be supported by a minimum of 10 per cent of the employees. This should prevent mischievous challenges by individual employees who are disgruntled with a union for some reason. Secondly, in a non-recognised workplace, it would ensure that the union had sufficient support to allow it to negotiate a lasting and workable system.
There is no explicit requirement in the Directive that arrangements for information and consultation should be permanent. It is implicit, however, that the arrangements should be general, permanent and statutory. Article 3 suggests that workers’ representatives should be able to assess the employer’s proposals and have an opportunity to respond to them. It would be difficult to achieve this in practice if there were not some kind of permanent arrangement. Consultation has to take place “at an appropriate level”, which again would need to be determined and established, rather than left to determination each time an issue arose. In Art.9 (1.A), which deals with transposition issues, reference is made to those member states with no general, permanent and statutory systems of information and consultation, nor representation.
The Regulations do allow for information and consultation directly with individual employees. The TUC was not happy with this but it was a point which the CBI succeeded in winning during the negotiations. There would have to be agreement with the employees that they wanted individual consultation, as the Directive refers to consultation with representatives of the workforce. The TUC believes that the best way of consulting employees is through their elected representatives though there is no harm in employers providing information directly to employees as well. As the consultation has to be with “a view to reaching an agreement” it is hard to see how the employer could reach agreement with all the employees on an individual basis alone.
Flexible implementation
As well as flexibility in terms of the statute, there is provision for voluntary agreements at the appropriate level. Although the TUC is generally relaxed about this where unions are recognised, in some sectors and workplaces where unions are weak, it could encourage employers to do the bare minimum and not take the process seriously. Devising the constituencies, determining the numbers of representatives and conducting the elections should not be under the control of the employer. The Regulations go some way towards ensuring that this is not the case, but there are worries, for example, about those who will supervise the ballots. There is no effective provision to ensure that supervisors will be competent, or fair, or genuinely independent.
Remedies and Sanctions
Article 7 of the Directive, which deals with the question of non-compliance, only requires remedies which are “effective, proportionate and dissuasive”. The TUC believes that the Directive should provide for injunctive relief so that companies can be made to revert to the status quo ante where they have failed to consult properly. This would mean that the employer would have to stop doing whatever it is that they should be consulting on until they have completed the consultation process. If they are proposing to close a site, this would have to wait until the consultation had properly taken place. This is what happens in Belgium and in the Netherlands and it is a much more effective deterrent than a fine. In recent collective redundancies in the UK, companies were publicly castigated for failing to consult their workforce before announcing mass redundancies. In situations where consultation has taken place, it has often been possible to avoid some redundancies or to offset the worst impact on individual workers by providing support packages.
Consequently the Regulations do not provide for interventions by the CAC or the courts where there is a failure to consult. Their only enforcement power is to make a declaration that consultation did not take place and impose a fine, which cannot be more than £75,000. For a large undertaking, this would not be an “effective, proportionate and dissuasive” remedy in the view of the TUC.
There is to be protection in law against detriment or dismissal for those employees who are elected as information and consultation representatives, which is welcome. In addition, the names of those employees who sign a petition supporting a challenge (the trigger) are sent directly to the CAC, who do not have to disclose them to the employer. This will ensure that individual employees are not victimised for challenging the employer.
Other issues for unions
To comply with European Court of Justice rulings, consultation on collective redundancies and transfers must now be conducted where there is no union recognised. The Information and Consultation Regulations have been devised in such a way as to mesh with the existing laws on collective redundancies and transfers. The employer must consult on probable changes under these Regulations. Once the stage has been reached where the employer is proposing redundancies or a transfer of undertakings, they must consult with the union where there is a union recognised, or other workforce representatives, presumably the information and consultation representatives. Thus the “single channel” route in the collective redundancies and transfers legislation is preserved. In recognised workplaces, the ICE representatives may also be the union representatives.
The new legislation could lead to dual or hybrid systems, where information and consultation is conducted with the information and consultation representatives, who may or may not also be union representatives, but collective bargaining, for example pay determination, working hours, and so on, are conducted solely with the recognised union for the employees in their bargaining area. The TUC has been advising unions to ensure that the distinction between collective bargaining and consultation remains, so that where employers set up new systems, they do not result in the dissolution or reduction of collective bargaining. It is likely however that in some workplaces the distinction will become blurred. One interesting fact that has emerged throughout the preparation stage is that some union representatives themselves, and their employers, do not recognise the difference between negotiating and consulting. No doubt employers’ organisations, unions and ACAS, who will be putting a lot of work into training employers and union representatives, will strive to achieve an understanding of the distinction.
In non-unionised workplaces, it is possible that ICE Committees or Councils will start to assume some of the characteristics of trade unions. Where there is no union presence, this may be a progressive development – out of such seeds grew the now independent finance sector unions in the 1990s. Where there is a union presence, if the unions do not succeed in capturing seats and becoming ICE representatives, there is a potential danger of rival organisations which could make recognition attempts difficult (see Part 6 of the statutory recognition schedule).
Another issue for unions is the legal enforceability of information and consultation systems set up under the Regulations. Most collective agreements in the UK (other than those few recently imposed by the Central Arbitration Committee under the new union recognition laws) are voluntary and not legally enforceable. To date, unions have favoured this approach. Agreements reached under the new Information and Consultation Regulations will be legally enforceable. This could result in some cases in the information and consultation aspects of otherwise voluntary agreements being legal but not the rest of the agreement. The TUC is considering the issue of legal enforceability more generally, because some EU Directives, for example the Posting of Worker’s Directive, does provide for derogations via collective agreements but these have to be legally enforceable, which, in the UK, they are generally not. There are, of course, important disadvantages for unions, as indicated above.
It is important to see the positive effects of the new laws. For example, the Government is currently concerned about the increase in individual employment rights litigation. Establishing formal and permanent consultative mechanisms could encourage the development of better dispute resolution procedures in workplaces. Where the workforce has been involved in the implementation of such procedures, as recommended by ACAS, workers are likely to have more faith in the processes. This could make a considerable difference to the volume of individual litigation.
There are workplaces in the UK where unions have a significant presence but not enough to seek statutory recognition. These new regulations will provide a means of permanent and formal involvement in such workplaces, which could encourage union growth and then lead on to recognition. It is also the case that far too few employers in the UK currently consult their workforce, even when major changes are planned. Workers today have a rightful expectation that their views on proposed changes will be listened to and respected, even if not acted on..
Conclusion
There are many issues to be addressed by employers and unions in coming months. These new laws have the potential to transform the employment relations landscape in the UK in a very positive way, as long as employers and unions view them constructively, as an opportunity not a threat. If employers and the Government fail to engage constructively in the transposition at national and at workplace level, great opportunities to improve workplace relations and give UK workers a say in how their work is organised will be wasted and, inevitably, much time and money will be spent pursuing legal challenges. If they do engage, interest will focus on whether the new systems result in significant growth in union influence, or significant growth in non-union collective representation, or significant growth in systems of direct consultation. The Government’s rhetoric when the Regulations were introduced focussed particularly on how unacceptable it was for employees not to have been informed and consulted over major changes, citing recent cases. The implication was that the voice of employees must be heard.
For the TUC, consultation is viewed as a stepping stone, or a rung on a ladder, ending ultimately in full union recognition and negotiating rights. There is growing acceptance that in some cases, consultation rights could be an end in themselves, rather than a means to an end. We will be waiting to see whether union successes in gaining consultation rights will simply rest at that, or will lead to greater things. In either case we will also be waiting to see whether the employee voice becomes heard loud and clear in all larger undertakings or whether employers will remain able to manage by diktat, with little regard for the views of their staff – often cited in annual reports as the greatest assets of the company.
An official from No.10 Downing Street described the ICE Directive as an asteroid coming to hit UK employers. We hope that for employers who fail to respect the voice of their employees this will indeed be the case. For those that already do it, particularly those who trust their employees sufficiently to recognise their union, it should not make much impact. The social partners to the Framework Agreement were united in their view that asteroids should not hit companies where good practices were evident and that damp squibs should not lie around ineffectively in companies that did not practice effective and systematic information and consultation. If it works well, the new legislation should leave the good well alone and deal effectively with the bad.