Gerry Sutcliffe MP

Information and Consultation Masterclass

But we are looking to do more than just raise awareness of new legislation. We want to encourage business, employees and unions to see the benefits of a better informed and consulted workforce. And we want you to learn from those who are at the forefront of good practice in this area.

I’m very pleased therefore that we have speakers from Cap Gemini and Canon who are here to describe what they are doing, and what they are learning, in terms of communicating with and consulting their employees.

I’m also pleased that the CBI and TUC are here today to give their perspectives on this subject. So we have a lot of experience and wisdom represented here today, not just on the platform but also amongst the audience. So I hope many of you will take the opportunity, particularly in the Q&A session at the end to bring your own insights, as well as your questions.

Now why do we in Government see this issue as so important to UK business?

We all know that businesses are working in an increasingly competitive environment. In many sectors it’s a global market. To keep ahead of the competition, you need to look for competitive advantage in every area of your business. That includes the way you treat your employees, and how you involve them in the business.

There’s lots of evidence that the more people are involved and informed at work, the more they contribute, the more they commit themselves, and the better prepared they are for change.

The business they work for can reap the benefits not just in reduced absenteeism and staff turnover, but in higher levels of productivity, performance and customer satisfaction.

Not that any of this follows automatically of course. The challenge for employers is to get the right blend of policies and practices that will best suit their particular circumstances.

This is why the Government has put implementing the Information & Consultation directive at the heart of its strategy of maximising potential in the workplace. And this is why we have implemented it in a way that tries to give as much flexibility as possible.

The new Information and Consultation regulations come into force on 6 April next year. Initially they will apply only to firms with 150 or more employees. Eventually, by April 2008, they will apply to firms with 50 or more employees. So, smaller companies will have longer to prepare.

We reached agreement with the CBI and the TUC on what this legislation should look like. This was the first time the Government had approached implementation of European legislation in this way. The fact that we did so was an excellent example of the sort of co-operation that the directive seeks to promote. It has also helped to create a very positive climate for the introduction of the legislation.

What we agreed with CBI and TUC, in outline, was:

· first, the requirements should not apply automatically – there should be demand from employees for consultation arrangements;

· second, where employees request consultation arrangements - but there are existing arrangements already in place that meet some minimum standards - then the request for something new should be endorsed by the wider workforce;

· third, employers and employees should be free to agree arrangements best suited to their individual circumstances; and

· lastly, only where employers and employees are unable to agreement on these arrangements, should the legislation dictate how and when consultation is to take place.

One of the strongest messages the Government got back from the consultation we carried out over the past two years was the need for flexibility

We know that the best companies to work for share many common features. But we also know that no two companies are identical. What works for one in terms of employee communications may not work for all.

Some organisations will have arrangements that are already working well. Others will be starting from scratch. Some recognise a trade union, others do not.

That's why we agreed with the CBI and TUC that we would not impose a single, rigid model on all.

We agreed businesses could tailor arrangements to suit their individual circumstances, as long as employees were happy with them.

We agreed businesses could establish arrangements covering more than one company, or different arrangements in different parts of a company as necessary - again as long as employees agreed.

Agreement is what’s key - nothing should be unilaterally imposed by management.

We could have said “all companies over a certain size must consult in the following way, on the following subjects and at the following time”. It would have been a lot easier!

But the more complex legislation we have is surely a price worth paying for flexibility. And it’s what we agreed with the CBI and TUC.

So you enjoy some flexibility with this. You also have time on your side - some more than others, depending on your size of business.

But your best option is to be ahead of the game. Put processes in place now so that the benefits of effective employee involvement can be felt as soon as possible.

We've deliberately designed the legislation to encourage employers to get on with it now. Don't wait until next year. Don't wait until you are forced. Be pro-active.

The emphasis in the legislation is on voluntary agreements. The Regulations give every opportunity to reach an agreement with employees on how information and consultation will be carried out within the business.

So if you have existing consultation arrangements in place, review them in light of the forthcoming legislation. But make sure you do it with your employees or their representatives, because one of the fundamental principles of the legislation is that voluntary agreements must be just that – agreements.

If you don’t have anything in place at the moment, or you know it falls short of what the new legislation requires, again, review the situation with your employees, find out what they want, make sure they are aware of the new rights coming in and have an informed discussion with them.

As I have said, we have provided a lot of flexibility in the legislation, but for you to make the most of it, you need to act now.

The Regulations will start to come into force next April. The DTI will be laying the legislation in Parliament later this month - substantially the same as the version that was published in July. It is hoped to have the legislation approved before Christmas.

At the same time the DTI will finalise its guidance that will sit alongside the legislation. Our consultation on that guidance closed last month and we got some very useful feedback.

One of the messages coming across was the need for different types of guidance for different types of organisation. Perhaps a simple basic guide along the lines you have in your packs today, complemented by the more detailed guidance that is clearly important to many organisations.

If I&C is to work in practice there has to be a real sense of commitment and trust on both sides. Training is vital. Training both for managers and for employee representatives. Training in how to establish and operate effective information and consultation arrangements.

Simply setting up a staff forum or committee or some other means of dialogue with your workforce won’t automatically deliver better employee involvement or business benefits.

Indeed, if structures are no more than empty shells, they risk creating disenchantment and cynicism with employees. I can think of nothing more likely to make it fail.

So make the most of the support on offer. Acas have recently launched a package of training materials which will complement the DTI guidance that I referred to a moment ago. I also know that the TUC has also put in place a comprehensive training programme for union representatives and officers.

The Government has high ambitions for the Information and Consultation legislation. Approached in the right way, it has the potential to bring about a culture change in workplaces throughout the UK.

To significantly improve the way we work.

And to empower employees to contribute even more to the businesses they work for.

The best employers already know this and practice it. But more need to raise their standards to the levels of their peers.

Information and consultation makes business sense.

It helps maintain your competitive edge.

It helps creates a high performance workplace.

Because if you invest in your workforce, your workforce will invest their time and energies in you.

I’m particularly pleased to be sharing the platform with two organisations who I know are committed to a very pro-active approach in the whole area of employee involvement and who can bring a wealth of knowledge and experience to bear. I’m sure we all look forward to learning from them.