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Research and Information
Key themes - ConsultationThis summary is intended as an introduction for employers, employees and their representatives to the Information and Consultation of Employees (ICE) Regulations that came into force on 6 April 2005:
Threshold numbers and timingThe regulations will cover undertakings with:
- 150 employees or more, by 06 April 2005;
- 100-149employees by 06 April 2007; and
- 50-99 employees by 06 April 2008.
An 'undertaking' is a legal entity such as a company, a co-operative, a partnership, a mutual, a building society, a friendly society, an association, a trade union, or charity 'carrying out an economic activity, whether or not operating for gain'.
Many public service organisations may also be covered including schools, colleges, universities, NHS trusts and government. Where there is a dispute about the application of the legislation, the Central Arbitration Committee (CAC) will decide whether an organisation is an undertaking carrying out an economic activity. The Cabinet Office will also be issuing a code of practice to cover areas of government (local and central) that do not carry out an economic activity.
The regulations emphasise the government's intention for organisations to develop their own voluntary approaches to informing and consulting employees. As such, when the regulations come into force, employers are not obliged to act until a sufficient number of employees trigger a request for negotiations.
However, even where there are well laid out arrangements for informing and consulting employees, these may not constitute a pre-existing agreement unless they:
- are in writing;
- cover all the employees of the undertaking (including senior management and head office staff);
- have been approved by the employees; and
- set out how the employer is to give information to the employees or their representatives and to seek their views on such information
Employees may demonstrate their approval in a number of ways. The DTI suggest the following:
- a majority of those who vote in a ballot of the workforce;
- a majority of the workforce expressing support through signatures;
- the agreement of employee representatives (including officials of independent recognised trade unions) who represent a majority of the workforce.
Two or more separately approved agreements, which when taken together cover all the employees in the undertaking would also constitute a pre-existing agreement. A single agreement may also provide for different arrangements in different parts of the undertaking.
Request for information and consultation proceduresA valid request by employees to set up information and consultation procedures, may consist of a single request made by at least 10 per cent of the employees in the undertaking, (constisting of between 15 and 2,500 employees) or a number of separate requests made on the same day or different days. In either case a valid request must:
- be in writing;
- be sent to the registered office, head office or principle place of business of the employer, or if they wish to remain anonymous, to the CAC; and
- specify the date on which it was sent.
Each individual request will remain valid for six months from the date on which it was sent.
If arrangements are already in place, the employer has the option to request a ballot of the entire workforce, provided it can demonstrated before the CAC that the employees had approved one or more pre-existing agreements covering the entire workforce. The employer must ballot the entire workforce even where the request comes from the employees in only one area, covered by a specific agreement.
Where 40 per cent or more of employees in the undertaking and a majority of those voting endorse the request in such a ballot, the employer must initiate negotiations to reach an agreement with employee representatives within three months of completing the ballot. Where fewer than 40 per cent endorse the request, there would be no such obligation to negotiate a new agreement. Where a valid request has been made, or the employer has initiated negotiations, no further requests or notifications may be made for three years.
Click here to view a flowchart in PDF format that demonstrates how the new regulations may apply to organisations with and without pre-existing information and consultation arrangements.
Negotiating an agreementThe employer and employee representatives (appointed or elected) have six months (extendable by agreement) in which to reach a negotiated agreement. Negotations must commence within three months of the date the employee request was made or the employer notification was issued. During the initial three months the employer must make arrangements for employees to appoint or elect negotiating representatives. A negotiated agreement must:
- be in writing;
- be dated;
- cover all employees in the undertaking;
- be approved either by all the negotiating representatives or a majority of the negotiating representatives and either 50 per cent of employees (in writing or by ballot);
- be signed by or on behalf of the employer;
- provide for the appointment or election of information and consultation representatives or provide information and consult with employees directly; and
- set out the circumstances in which the employer must inform and consult employees.
A single agreement or multiple agreements may provide for different arrangements in different parts of the undertaking.
Standard information and consultation provisionsWhere a valid employee request or employer notification has been made, but no agreement is reached within the required period, 'standard information and consultation provisions' will apply.
The employer has a further six months to set up the relevant structures including the election of information and consultation representatives (information and consultaion directly with employees is not recognised under the statutory provisions) from the point at which negotiations failed, in order to set up the necessary information and consultation structures.
The number of information and consultation representatives required is proportional to the number of employees in the undertaking - one per 50 employees or part thereof, subject to a minimum of two representatives and a maximum of 25.
The standard provisions apply at the undertaking level and there is no provision for different arrangements in different parts of the undertaking.
Where the standard I&C provisions apply, employee I&C representatives are to be elected and the employer must provide:
- Information on:
(i) the recent and probable development of the undertaking's activities and economic situation. The purpose of this information is to help I&C representatives understand the context in which decisions affecting employment, work organisation and employees' contractual relations are made;
- Information and consultation on:
(ii) the situation, structure and probable development of employment within the undertaking and, in particular, on any anticipatory measures envisaged where there is a threat to employment within the undertaking. The emphasis here is on the overall number of employees within the undertaking.
- Information and consultation with a view to reaching agreement on:
(iii) decisions likely to lead to substantial changes in work organisation or in contractual relations. 'Contractual relations' means employers' contractual relations with their employees. Decisions in category (iii) may include decisions on collective redundancies and business transfers. However, employers will not need to consult on these decisions under the standard I&C provisions where they notify I&C representatives, on a case-by-case basis, that they will be consulting under the legislation on collective redundancies or business transfers.
Consultation means giving enough time and information to allow I&C representatives to consider the matter and form a view, with genuine and conscientious consideration of that view by the employer.
The standard I&C provisions require the employer to meet the I&C representatives at a level of management relevant to the subject under discussion, and to give a reasoned response to any opinion they may give.
Employers are not obliged to adopt the views of I&C representatives and decision-making remains the responsibility of management.
In the case of a disputeWhere a negotiated agreement has been agreed, or the standard information and consultation provisions apply, disputes may be presented to the CAC within three months of an alleged failure. Where a complaint is well-founded, the CAC shall specify:
- the steps which the employer is required to take to comply with the terms of the negotiated agreement or standard provisions;
- the date of the failure; and
- the period within which the order must be complied with.
The CAC may not suspend, alter, prevent or delay any act proposed by the employer, or any agreement made, by that employer. However, where a complaint is upheld, the person who brought it may then apply to the Employment Appeal Tribunal (EAT) for a penalty of up to £75,000 against the employer. The EAT must impose a penalty unless satisfied by the employer that the reason for the failure was beyond their control. It is also worth noting that CAC orders are enforcable via the courts and not the EAT.
Negotiated agreements after the standard provisions applyEmployers and information and consultation representatives may come to a negotiated agreement at any time after the standard information and consultation provisions apply.
Other provisionsOther provisions in the regulations deal with confidentiality, the protection of employee reps, the appointment of reps in the absence of a negotiated agreement, and ballot arrangements.
Please click here to find out how the IPA can help you make the most of informing and consulting your workforce.
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