The Expanding Duty to Inform & Consult

by Hazel Phillips

The expanded duty to inform and consult employees has been a legal requirement for larger employers for a number of years. However, from 6th April 2008 the scope of the Information and Consultation of Employees Regulations 2004 (which can be found at www.opsi.gov.uk) extends to cover businesses with 50 or more employees. This month’s bulletin will highlight the requirements of these Regulations and the steps that employers need to take in order to be compliant.

The aim and scope of the Regulations

The thinking behind the Regulations is that if there is better communication between employers and employees, employees will be more committed, which will lead to decreased absenteeism and staff turnover, resulting in increasing turnover.

Exactly what information the employer has to inform and consult with employees about is dependent on what is agreed, but the standard procedure in the Regulations provides for discussions about upcoming mergers, new areas of business, important successes or failures and upcoming large scale redundancies or recruitment.

It is important to realise that these Regulations do not apply automatically. Unless an employer triggers the Regulations or employees make a valid request (see below) then the employer does not have to do anything.  Employers will still have a duty to inform and consult in certain situations (for example, with regards to large scale redundancies) as usual but, once triggered, the Regulations extend the scope of informing and consulting in the workplace and impose additional obligations on employers.

Who is covered by the Regulations?

If an employer is not carrying out ‘economic activity’ then these Regulations do not apply. If you are in any doubt with regards to your status please contact Burnetts for further advice.  An employer also needs to employ more than 50 people before the Regulations will apply. However, determining whether you have 50 or more employees is not a straightforward exercise. The number of employees in an undertaking is averaged out over the 12 months prior to the request.  Therefore, just because your business has less than 50 employees now, does not mean that Regulations won’t apply.  If an employee works part time for 75 hours or less a month then an employer can choose to count them as ‘half an employee’, rather than a ‘whole’.  Employers will need to check carefully who has been working for them in the last 12 months before making the decision as to whether or not the Regulations apply.

How is the duty to inform and consult triggered?

As explained above, unusual feature of these Regulations is that the Employer doesn’t necessarily have to do anything.  The Employer can decide to be proactive or can wait to see if the Employees will initiate the process.

For employees to initiate the process they need to have the support of at least 10% of employees in the undertaking (this is subject to a minimum of 15 employees agreeing and a maximum of 2,500). Part time employees count as ‘whole’ employees when calculating whether the employees have managed to amass enough support for the request.  Employees have up to 6 months to make up the required 10%, so they can submit multiple requests that add up to 10%. Employees must make their request in writing, state who is making the request and date the request. Employees can also make an anonymous request via the Central Arbitration Committee (CAC).

How to deal with a request

If employees make a valid request this does not mean that the employer will be forced into provisions over which they have no control. There are three options:
(1) continue with a pre-existing agreement;
(2) negotiate a new agreement;
(3) use the fall back standard provisions in the Regulations; or
(4) the employer can dispute the validity of a request by referring the matter to CAC.

Pre-existing Agreement

If an employer has a pre-existing arrangement regarding sharing information with staff the employees can request a ballot.  40% of the workforce and a majority of those voting have to vote in favour of the request for a new agreement to be negotiated for the request to be valid. If these numbers are not reached then the employer is under no obligation to negotiate a new agreement and the old agreement will continue.

 In order for a pre-existing arrangement to be valid it must:

(1) have been made prior to the employee request;
(2) be in writing;
(3) cover all employees within the undertaking;
(4) set out how the employer is going to give the employees information and get their views on it; and
(5) be approved by the employees.

If your business has a pre-existing agreement in place and you are about to become subject to these Regulations now would be a good time to look at the agreement to establish whether it complies with the above requirements and to make any adaptations that are necessary prior to a request being made by your employees.

Putting new procedures in place

If you do not have an agreement in place at present, or know that your current agreement is not compliant, then you may wish to take the initiative rather than waiting for the request.  If you are of the opinion that an employee request is inevitable in any event you may wish to start this procedure on your own terms and at a time convenient to you.

If an employer wants to start this procedure they need to:

(1) notify all employees in the undertaking;
(2) make it clear they are starting the procedure to inform and consult;
(3) state that notification is given under the Regulations; and
(4) give the date on which notification is given.

Employers are then subject to the same procedure as when an employee request is made.

Negotiating an Agreement

If an employer has no existing agreement in place, or if a ballot to request a new agreement succeeds then the next step is to try to negotiate an agreement. Negotiating representatives should be appointed by the employees and negotiations can then commence.

The Regulations are very flexible with regards to the agreement that is reached. The employer needs to:

(1) specify in which situations they will inform and consult with their employees;
(2)  provide for the selection of informing and consulting representatives or state that they will consult with the workforce directly;
(3) document the agreement in writing;
(4) date the Agreement; and
(5) ensure the agreement is approved by the employees.

However, the frequency, timing and method of informing and consulting are left up to the employer and the employee representatives to agree.

Standard Provisions

If negotiations fail, or if negotiations are not initiated within the time limit set down by the Regulations then the standard provisions will apply.

Under the standard provisions informing and consulting representatives must be elected in a ballot and there must be at least one representative for each 50 employees (subject to a minimum of 2 and a maximum of 25). The Regulations set down the situations in which the employer must inform and consult with their employees, but even in the standard provisions there is some flexibility with regards to the timing, method and content of the informing and consulting.

The above is just a general outline of the Regulations and there are many complexities connected with implementing an informing and consulting system that is compliant with the rules. In particular, there are specific time scales that have to be complied with and additional rules if you want different agreements for different parts of your business. If you require specific advice on if and how these Regulations apply to your business please do not hesitate to contact Burnetts’ Employment Team on 01228 552222.

Back to Employment Law E-Bulletin April 08

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Apr 08