We really need to talk about this

On 6 APril the Information and Consultation of Employees Regulations 2004 will come into force. The regulations will give employees new rights to be informed and consulted about their employer’s business. The affected organisations must agree an information and consultation agreement with their employees if requested to do so by a certain proportion of their workforce.

The regulations will at first apply to all organisations with 150 employees or more but will be extended in 2007 to cover those with 100 or more employees, and to those with 50 or more in 2008. Employers who are affected by the new legislation and have not already acted should consider their strategy now. Employers are advised to:

• identify which parts of their organisation will be subject to the regulations and when
• consider whether or not it is likely that 10% of employees will make a request for an I&C agreement and what should be the appropriate response to such a request
• consider starting the process themselves by asking employees whether they want an I&C agreement – this approach may be beneficial to employee relations
• review existing agreements and arrangements (for example, trade union recognition agreements) to determine whether they qualify as pre-existing agreements. Pre-existing agreements can be used to defeat an I&C agreement request provided that the request is not endorsed in an employee ballot
• review the existing employee relations strategy and decide whether any aspect of the strategy needs to be changed.

So what is included in a voluntary I&C agreement? The regulations set out only very limited requirements regarding their content because the government wants to encourage the negotiating parties to establish arrangements that are best suited to their particular circumstances. The minimum requirements are that I&C agreements must:

• set out the circumstances in which the employer must give information to and consult with an employee
• be in writing and dated
• cover all employees in the organisation
• be approved and signed by the employer
• provide for the appointment or election of representatives to participate in the consultation process.

Negotiations with the employee representative must commence within three months after they make the request and may last for six months

This leaves a number of issues to be agreed between the parties, such as:

• the method of informing and consulting with staff, including whether there will be employee representatives or whether the employer will inform and consult directly with the entire workforce
• any obligations there may be on employee representatives
• any training, facilities and time off for employee representatives
• the frequency, timing and subject matter of information and consultation
• how the view of employees will be given and what the employer will do to respond to employees’ views
• who represents management at meetings
• how other legal requirements to inform and consult will be dealt with, for instance under TUPE, collective redundancies, health and safety and so on
• what information will be given to staff representatives and how confidential or price-sensitive information will be dealt with
• how disputes will be resolved
• how long the agreement will last and how it will be reviewed or terminated.

Negotiations with the employee representatives must commence within three months from the date of the request and may last for up to six months. If no agreement is reached within that time, then the parties may agree to an extension to the negotiating period. Where the parties fail to agree, the standard I&C provisions will apply.

Many UK employers will worry about the bureaucratic impact of the regulations. However, they are far less onerous than originally expected. In particular, the regime is not mandatory but depends on employees making a request. Moreover, employees are not entitled to claim compensation or overturn an employer’s decisions just because of a failure to comply with the regulations. The only remedy for a breach is by way of complaint to the Central Arbitration Committee – though it’s worth remembering that could result in an employer being ordered to pay a fine of up to £75,000.