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Consultancy
About the new regulations
Q. What will regulations require employers to do?The draft regulations require employers to initiate a process which will lead to an information and consultation procedure that will:
- Inform elected employee representatives about business developments and financial situations
- Consult on employment trends
- Consult, with a view to reaching agreement, on changes in work organisation or contractual relations, including business transfers and redundancies
- Consultation must be conducted in an appropriate way and with a relevant level of management to the subject matter under discussion
Click here for more information on developing information and consultation procedures
Q. What are the possible outcomes?There are four possible outcomes:
- No action - neither employees nor the employer take the initiative to start a negotiation on implementing an I&C Procedure
- A Negotiated Agreement - either 10% of employees, or the employer, request negotiations on an I&C Procedure. A suitable agreement is reached within the statutory timeframe (6 months, subject to mutually agreed extensions)
- Default 'standard' provisions apply - if the negotiated agreement route is triggered, but agreement cannot be reached, default standard provisions set out in the Regulations will apply automatically.
- A Pre-Existing Agreement - if employees make a request for an I&C procedure under the Regulations, the employer may resist this on the basis that there is already a Pre-Existing Agreement relating to employee information and consultation. A valid Pre-Existing Agreement would need to be overturned by a vote of 40% or more of the workforce in a ballot. Click here for more information about IPA's balloting services
Q. What is a Negotiated Agreement?There has been a rejection of a 'one size fits all' solution. The content and structure of negotiated I&C Procedures is left open to the parties. There is a procedure in the draft Regulations to elect 'negotiating representatives'. Click here for information about IPA's balloting services.
Q. How does a pre-existing agreement qualify?The qualifying conditions for Pre-Existing Agreements are:
- It is in writing
- Covers all employees in the undertaking
- Has been approved by the employees; (click here for information on IPA balloting services)
- Sets out how the employer is to give information to the employees, or their representatives, and how they will seek views on this information
Q. What are standard default provisions?The default obligations are:
- The recent and probable development of the undertaking's activities and economic situation
- The situation, structure and probable development of employment within the undertaking and any anticipatory measures envisaged, in particular, where there is a threat to employment within the undertaking.
- Decisions likely to lead to substantial changes in work organisation or in contractual relations, including those relating to collective redundancies and transfer of undertakings.
Q. When will it apply?
- Undertakings employing 150+ staff will be covered from 6 April 2005
- Undertakings employing 100+ staff will be covered from 6 April 2007
- Undertakings employing 50+ staff will be covered from 6 April 2008
- There are no plans currently to include undertakings with less than 50 employees in the legislation, click here for best practice guidance for all businesses.
Q. What is an 'undertaking'?An 'undertaking' is a legal entity (e.g. an incorporated company).
Q. The trigger mechanism - what does it mean?An employer must initiate negotiations to reach an information and consultation agreement when requested to do so by at least 10% of the workforce.
Q. What are the penalties of non-compliance?Where a valid application for an information and consultation agreement has been made and not complied with, a £75,000 financial penalty could be applied, and a compliance order issued by the Central Arbitration Committee (CAC)
Q. When do we need to act?Act now to ensure you will meet the deadlines above and gain competitive advantage from early adoption of a negotiated agreement that will deliver real benefits to your organisation. Click here for more help and guidance.
Q. Why inform and consult with your workforce?To comply with the law AND:
- improve productivity
- reduce employees' resistance to change
- improve decision-making
- develop mutual understanding and trust between the parties
Want more information? Call Derek Luckhurst on 020 7354 8040 or click here
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