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INFORMATION AND CONSULTATION
FAQs
Why has
this legislation been introduced
Who will be affected by the new
legislation?
What does
the legislation require?
What do
employers need to do?
Do
employees need to do anything?
What if
there are already I & C arrangements in a company?
What are
the standard I&C provisions?
What
happens if the legislation is breached?
1. What is “information and consultation”?
It
is about on-going dialogue with the workforce so that employees
are kept up-to-date about significant developments in the
workplace. It is more than simply providing information.
Consultation means employees have the chance to express an opinion
about particular issues, and employers genuinely and
conscientiously consider and respond to their views. Informing and consulting can take place through employee
representatives, directly with the employees, or through a
combination of both methods. However, informing and
consulting is different to negotiation, collective bargaining or
joint decision-making. Decisions remain the responsibility
of management.
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2. Why has this
legislation been introduced?
It must be implemented in all
Member States.
The Government supports the Directive and the principle
behind it – that effective employee involvement is good both for
individual employees and the business they work for.
The UK’s approach to implementation is to encourage
employers and employees to think of this not just as a piece of
legislation to comply with, but as an opportunity to review and
revamp communication strategies within their organisations as part
of the wider aim of maximising the potential of their workforce.
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3. Who will be affected by the new legislation?
The
legislation applies to “undertakings”.
These are defined in the Directive and the Regulations as
“a public or private undertaking carrying out an economic
activity, whether or not operating for gain”.
In terms of companies, DTI believes this means a separately
incorporated legal entity (which would have its own
shareholders and, in the case of British companies, a unique
registration number at Companies House), as distinct from say an
organisational entity such as an establishment, division or
business unit of a company. It
would also include partnerships, co-operatives, mutuals, building
societies, friendly societies, associations, trade unions,
charities and individuals who are employers – if they carry out
an economic activity. It
may also include schools, colleges, universities, NHS trusts, and
Government bodies (both central and local), again if they carry
out an economic activity. Ultimately
it is a matter for the courts to decide (in the first instance,
the Central Arbitration Committee), on a case-by-case basis,
whether an organisation is carrying out an economic activity.
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4. What does the legislation
require?
The new law
will only apply if at least 10% of the workforce makes a written
request for information and consultation arrangements or employers
start negotiations for an I & C agreement on their own
initiative. If this
happens the employer must normally make arrangements to allow the
workforce to elect or appoint representatives to negotiate an Information and
Consultation agreement with the employer.
However, where there is a valid pre-existing agreement in
place and a request for new arrangements is made by less than 40%
of the workforce, the employer may ballot the workforce to see if
it endorses the request by employees.
Where at least 40% of the workforce and a majority of those
voting in the ballot endorse the employee request, the obligation
to negotiate a new agreement will apply; otherwise the pre-existing agreement may continue (see
question 7 for the requirements for pre-existing agreements). Where an employee request is made but no agreement is
reached, standard provisions apply requiring the employer to
inform and consult employee representatives in the way set out in
the Regulations (see question 8 below).
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5. What do employers need to
do?
This will
vary from organisation to organisation depending on what kinds of
communications systems are currently in place.
Employers are advised to review, and if necessary revamp,
any existing consultation arrangements they have, in light of the
new legislation, and in consultation with employees or their
representatives. Employers
and employees are free to put in place whatever arrangements best
suit their particular circumstances.
These may be informal arrangements that are acknowledged as
not meeting the requirements of the legislation, or pre-existing
agreements that meet the criteria set out in the Regulations (see
question 7 below), or negotiated agreements that are enforceable
at the Central Arbitration Committee.
Agreements should detail what subjects will be covered and
how and when the employer will consult employees.
The important point is that whatever arrangements are in
place they must be agreed with employees.
Management cannot unilaterally impose the arrangements.
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6. Do employees need to do
anything?
Yes, because
the requirements in the legislation do not apply automatically.
They are triggered when at least 10% of the employees in
the workforce ask for an information and consultation agreement.
When this happens the employer and representatives of the
employees will normally negotiate an information and consultation
agreement that sets out how and when the informing and consulting
will take place. It
is also possible for the employer and employees to agree voluntary
arrangements with their employer, without a formal request (see
question 7 below). These
may be based on existing consultation arrangements (including
consultation through a trade union) or be completely new
arrangements.
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7.
What if there are already I & C arrangements in a
company?
There are provisions in the legislation covering “pre-existing
agreements”. Although
such agreements will not have been set up under the Regulations,
they may continue and will be treated as meeting the requirements
of the Regulations -
unless there is significant demand from the workforce for new I
& C arrangements. To
be valid, a pre-existing agreement must be in writing, state how
employees or their representatives will be informed and consulted,
cover all the employees in the undertaking, and be approved by the
employees or their representatives.
Pre-existing agreements may cover more than one undertaking
(company), or establish different consultation arrangements in
different parts of an undertaking.
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8. What are the standard
I&C provisions?
These are
requirements that apply if a valid employee request is made for an
I&C agreement, but where no agreement is reached.
They operate as a fallback to ensure that information and
consultation arrangements are put in place where sufficient
employees want them. They
require the employer to inform employee representatives of the
recent and probable development of the undertaking’s activities
and economic situation; to
inform and consult them on 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); and to inform and
consult them with a view to reaching agreement on decisions likely
to lead to substantial changes in work organisation or in
employees’ contractual relations (including decisions on
collective redundancies and business transfers).
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9. What happens if the
legislation is breached?
Where an
employer has an agreement covered by the legislation, or is
subject to the standard I&C provisions, and fails to inform
and consult as required, a complaint can be made to the Central
Arbitration Committee. The
CAC will take the steps it thinks are needed to put any breach
right and on application the Employment Appeal Tribunal can impose
a financial penalty of up to £75,000.
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