RESPONSES TO THE PUBLIC CONSULTATION ON DRAFT DTI GUIDANCE ON THE INFORMATION AND CONSULTATION REGULATIONS

Introduction

1.  DTI consulted on draft regulations to implement the EC directive on informing and consulting employees in July 2003. Revised draft regulations were published in July 2004 taking account of responses to the consultation, together with draft guidance explaining the legislation. Comments on the draft guidance were invited by 22 October 2004, and more than 30 responses were received. DTI also commissioned the Involvement and Participation Association (IPA) to undertake a pilot of the guidance involving almost 100 organisations. A full list of those who responded to the consultation and took part in the IPA pilot is shown at the annex.

2.  The consultation asked:

• Is the structure of the guidance helpful? Does it make the legislation and the process established by the legislation sufficiently clear?  
   

• Is the approach of keeping the main text relatively short with box links to more details useful? Does it strike the right balance between keeping the length manageable and providing sufficient detail on specific points?
   

• Is the overall length about right, too long or too short? Are there specific issues where you feel the guidance is too long, or too brief?
   

• Are there any other aspects of the guidance you would like to comment on?

Summary of responses

3.  In general, consultees were broadly happy with the clarity of the guidance as an explanation of the legislation, and its comprehensiveness. But many – especially smaller organisations - felt it was long and quite detailed. At the same time, there was no strong view on what could be deleted (other than where there was repetition), and indeed many respondents asked for additional guidance on a range of points. Views were somewhat divided on the merits of providing main guidance with links to more detailed advice, though almost everyone pointed out how difficult it was to navigate the text when printed out. There was a strong feeling that key information and definitions needed to be included in the main text, rather than in more detailed guidance.

4.  Various suggestions were made for making the guidance more user-friendly, including greater use of bullet points, diagrams, examples, shorter paragraphs, and plainer English, and less repetition and cross-referencing.  A glossary of key terms and an executive summary were suggested. Clearer distinction was requested between what was legal requirement and what touched on recommended good practice. There was some divergence of view as to whether the guidance should give more examples of good practice, or whether it should stick rigidly to explaining the law. Suggestions for additional good practice advice included guidance on how organisations could resolve conflict in-house without resorting to the Central Arbitration Committee (CAC), how to encourage employees to stand as representatives, how to organise ballots, subjects for consultation under voluntary agreements, facilities for employee representatives, and the importance of employee representatives consulting and reporting back to those they represent. In addition, some consultees thought more could be done to make the case for information and consultation as a means of improving employee satisfaction and engagement.

5.  There was a divergence of views on some issues. For example, some thought the suggestions for the contents of pre-existing and negotiated agreements risked being seen as prescriptive, but others welcomed them, and some thought they did not go far enough; some thought the scope of information sharing under the standard provisions was too broad, others found it too restricted; some wanted more precision on issues like the timing and frequency of meetings and what is meant by consultation, whilst others found the guidance on these points informative and pragmatic.

6.  Further guidance or clarification was requested on a number of points, including:

• the position of directors, partners, overseas workers, fixed-term employees and others as “employees”;
   

• the position of charitable and other not-for-profit organisations;
   

• why there are transitional periods for smaller companies, and why there are minimum and maximum figures for employee requests;
   

• whether the 6 month period for aggregating employee requests is a rolling 6 month period;
   

• how collective agreements with trade unions could constitute a pre-existing agreement for the purpose of the I&C Regulations, and the options available to employers and unions where there is a collective agreement in place;
   

• the difference between electing and appointing negotiating representatives;
   

• the role of representatives of managers who are also employees, both when negotiating an agreement, and as information and consultation representatives;
   

• the fact that references in the guidance to “disputes” about an I&C agreement or the standard provisions mean disputes about how information and consultation has taken place, rather than disputes about the issue on which it has taken place;
   

• what is meant by price-sensitive information, and how long a restriction on confidential information can last;
   

• the relationship between the I&C Regulations and Listing Rules requirements concerning price-sensitive information;
   

• how the legislation applies when administrators or receivers have been appointed; and
   

• what should happen to consultation structures if there is a significant increase or decrease in the number of employees, for example, as a result of an acquisition, divestment, or merger, or simply through substantial recruitment or redundancies

Government response

7.  We are extremely grateful to everyone who provided comments on the draft guidance. In response, the Government will revise the guidance by shortening the text wherever possible, adding more diagrams and bullet point lists, including an executive summary and glossary of terms, and reducing the amount of cross-referencing. To satisfy demand for both detailed and shorter guidance, we will publish a number of versions:

• a summary version;

• a web-based version with broadly the same level of detail as in the draft version; and

• a printer-friendly version with the same level of detail as the web-based version.

8.  We will also produce a version that only deals with pre-existing agreements, and which is aimed at undertakings with fewer than 150 employees who will not be covered by the legislation for the first two to three years. 

9.  We will provide further guidance and clarification on the points detailed at paragraph 6 above, and other points raised by consultees. 

10.  In general, we do not intend to provide good practice advice in the DTI guidance because that is primarily the role of the guidance published by Acas. In places where the DTI guidance does go beyond the letter of the law, the purpose is to help employers comply with their legal obligations. DTI will forward to Acas the suggestions for additional good practice advice referred to at paragraph 4 above, for Acas to consider whether to include in its own guidance. 

11.  In addition, we will make a number of changes to the guidance to reflect changes in the Regulations made since the version published in July 2004. Many of these changes are not substantive, but are made to improve the wording of the Regulations, make them more internally consistent, and correct a few mistakes. Some changes are more substantive, but do not alter the legislation to any significant extent. The more substantive changes include:

• amendments in a number of places to cater for ballots held on more than one day;
   

• making clear in the definition of a pre-existing agreement that the agreement must pre-exist an employee request (not the date of entry into force of the Regulations), and that it would not include a negotiated agreement under regulation 16;
   

• adding a requirement that those making an employee request to negotiate an I&C agreement should give their names (though such requests could still be made anonymously via the Central Arbitration Committee). This requirement was implicit in the previous version of regulation 7;
   

• providing for the CAC to discount any names in an employee request made via the CAC of employees who had already made a request in the previous six months, to avoid double-counting;
   

• changing the effective date of an employee request made via the CAC. It will now be when the CAC has finished handling the request, rather than when it starts to do so. This means that the 3 month period for an employer to initiate negotiations will not be reduced by the length of time it takes the CAC to handle the request;
   

• adding a right to bring a complaint to the CAC that an employer has failed to notify employees of an intention to hold a ballot to endorse an employee request for an I&C agreement;
   

• re-wording regulation 9 concerning pre-existing agreements covering more than one undertaking. The previous wording did not adequately achieve the objective of allowing arrangements that cover more than one undertaking to be established by more than one pre-existing agreement (for example, an agreement covering the manual employees in two or more undertakings, and another agreement covering the administrative or managerial employees). There will be some consequential changes to regulation 10 concerning the circumstances in which employees may challenge the validity of a pre-existing agreement covering more than one undertaking;
   

• some additional cases where the clock is stopped for the purpose of the 3 month period for initiating negotiations and the 6 month period for carrying out the negotiations; 
   

• clarification that a negotiated agreement may consist of different parts relating to different parts of the undertaking, and may be negotiated by different representatives of the employees, and that each part could be approved in different ways;
   

• a new requirement for the employer to inform the employees of the result of any ballot held to approve a negotiated agreement, thereby making it consistent with other provisions concerning ballots;
   

• clarification that an employer wishing to make use of the ability to consult about collective redundancies or business transfers under the legislation specific to those situations must notify I&C representatives on each occasion when they intend to do so, not on a standing basis. In relation to pre-existing and negotiated agreements, the guidance will be revised to make clear that employers and employees will be free to agree to deal with this issue in any way they wish, eg case-by-case, on a standing basis, or by excluding collective redundancies and business transfers from the scope of their agreement altogether;
   

• a new provision, similar to that in the Employment Relations Act 2004, allows the Central Arbitration Committee (CAC) to draw an inference from a party’s failure to comply with a CAC request for information or documents;
   

• the provision concerning conciliation by Acas has been revised to ensure it is consistent with the powers to make the I&C Regulations contained in the Employment Relations Act 2004, and to give Acas the discretion to decline to conciliate where it considers it would not be appropriate;
   

• a new regulation making necessary changes to the Employment Appeal Tribunal Rules 1993; and
   

• a new regulation ensuring that employees in public sector undertakings covered by the EC Directive, but who are employees of the Crown, enjoy the rights given them by the Directive. This is not a substantive change to the Regulations. The Directive applies to public and private undertakings carrying out an economic activity. This may well include some public sector undertakings where the employer is the Crown. Without this clause employees in such undertakings would have been excluded because they are not “employees” as defined in regulation 2, and the UK’s transposition of the Directive would have been deficient.

Next steps

12.  The Government is laying the Information & Consultation of Employees Regulations in Parliament at the same time as it publishes this response to consultation. The date for entry into force will be 6 April 2005. Final guidance on the Regulations, incorporating the changes set out above, will be published once the Regulations have received approval from Parliament.
 

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Last updated 10 December 2004