Information and Consultation how will it affect your business - 04/04/2005

The new rules on Information and Consultation (I&C) that come into effect from April this year provide employees with the right to be informed and consulted about matters affecting their employment.  But what does that mean in reality for an unwary employer?

When do the new rules apply?

The new rules are being phased in over a number of years and will apply to undertakings with:
- 150 or more employees from 6/4/05
- 100 or more employees from 6/4/07
- 50 or more employees from 6/4/08

What is an undertaking?

The Regulations define an undertaking as “a public or private undertaking carrying out an economic activity, whether or not operating for a gain”.  DTI guidance on the new rules suggests that this means, in the case of a company, a separately incorporated legal entity, rather than an organisational entity such as an establishment, division or business unit.

What if there is no valid pre-existing agreement in place?

If there is no valid pre-existing agreement in place, and ten per cent of the workforce requests that an I&C arrangement be set up, then the employer must enter negotiations on this with workforce representatives.  A pre-existing agreement is valid only if it meets certain minimum criteria.   Employers without an existing arrangement in place may wish to put one in place to pre-empt any potential employee request.

The Benefits of Employee involvement

Many employers have realised that having two way communication and consultation with employees can be a key contributor to business success.  Companies with a high level of employee involvement are now more likely to be seen as “an employer of choice”.

A company giving a representative group of staff a voice in decision making is more likely to reap the rewards of lower staff turnover and higher morale.

Enforcement and adjudicated

The main forum of enforcement of the rights and obligations contained in the ICE Regulations  is the Central Arbitration Committee “CAC”.  The CAC will adjudicate, amongst other things on:

what amounts to an undertaking in individual cases
- how many employees are employed in the undertaking
- whether an employer has failed to provide data on the number of employees
- whether an employer has held a valid ballot in time
- whether the appointment or election of negotiating representatives was valid
- whether an employer has failed to comply with the terms of a negotiated or standard arrangement.

In the case of the last point above, I&C representatives or, if they have not been appointed or elected, employee representatives, may apply within three months of the decision to the Employment Appeals Tribunals (EAT) for a penalty notice to be issued.  This may be for a sum of up to £75,000.00.

The CAC will be publishing guidance on this procedure for the conduct of complaints under the ICE Regulations and the CAC will also be obliged to refer matters to ACAS where there is a chance that the matter could be resolved by way of conciliation.  Appeals from the CAC will be on points of law and will go to the EAT.

What Keoghs has done

Keoghs has set up a Staff Forum with the aims of complying with the Regulations and improving internal communications.

The Staff Forum complements Keoghs’ comprehensive approach to communications and is not seen as a substitute for everyday communications. 

Following guidelines on the formal appointment of representatives we now have a team representing all employee groups in the business.  The first two meetings have already been held.

For more information contact: Kevin McKenna Head of Employment at kmckenna@keoghs.co.uk or 01204 677070

Disclaimer of Liability: Nothing in this document constitutes legal advice.  You should always consult a suitably qualified lawyer about any specific legal matter. Keoghs assumes no responsibility for the information in this document and disclaims all liability relating to such information.

© Keoghs Solicitors 2005