Information and Consultation Regulations - Employment Law News Spring 2005

01 April 2005

In July 2004 the government published the final draft of the Information and Consultation of Employees Regulations (the ‘Regulations’). These set out requirements for employers to put in place arrangements for informing and consulting employees on matters affecting their employment.

They will impose on many UK employers, for the first time, a model of employee representation and information similar to those existing in some larger continental jurisdictions.

In our Autumn 2003 issue we outlined the thrust of the new regime. In this article, we address just the most immediate questions we believe most businesses will be asking at this stage.

Are we ‘in scope’? Initially (i.e. as from 6th April 2005) only undertakings with 150 or more employees will be affected. The regime will be extended to undertakings with 100 or more employees in April 2007, and to those with 50 or more employees in April 2008. For these purposes:

• An ‘undertaking’ means an entity carrying out an economic activity, whether or not for gain. This will include individual companies, and entities such as partnerships (with discrete operational units not being assessed separately in their own right). Within a group context, it now appears clear that thresholds are to be assessed on a company by company basis, not by aggregation across the group; and
• Employee numbers are averaged over a preceding 12 month period, with part-timers (defined as those working 75 hours or less monthly, excluding overtime and assuming no absences) counting as half an employee.

Are we obliged to establish new procedures? Even if you are ‘in scope’, an obligation to establish an information and consultation procedure (ICP) only arises where a valid employee request is made for one. To be valid, a request must be made by at least 10% of the undertaking's employees, subject to a minimum of 15. Requests are aggregated with those made in the preceding six months. They can be made direct to the employer or via the Central Arbitration Committee which has a general policing role and through which employee anonymity can be maintained.

What if we already have procedures in place? If you have a pre-existing arrangement in place and it:

• Is in writing,
• Covers all employees,
• Has been employee approved (to the requisite standard)
• clearly sets out a mechanism under which you provide information to your employees or their representatives and seek their views on it,

then you may have the option to ballot employees on which of the new statutory procedures or your pre-existing arrangement they wish to run with. The option to ballot will only arise if the valid request for an ICP comes from less than 40% of employees. In this case, unless the request is then endorsed in the ballot by 40% of your employees and a majority of those voting, you will be able to continue with your pre-existing arrangement instead of a new ICP.

And, if we can't use our pre-existing arrangement instead? If the employee request for an ICP is endorsed in the ballot, or if the ICP request itself was made by 40% or more of your employees, then you would be obliged to follow the prescribed process of working towards a negotiated ICP with employees and their representatives, within the Regulations' particular framework. A detailed process is set out for this, failing which a default arrangement (again, set out in detail in the Regulations) would ultimately be imposed.

Undertakings with successful, but informal, arrangements already in place could consider formalising them by obtaining requisite employee approval in order, in very loose terms, to raise the necessary support threshold for a new-style ICP from 10% to 40%; and those without any procedures currently in place may wish to consider the possibility of entering now into a voluntary arrangement to achieve the same result.

An advantage of such an arrangement over an ICP under the new regime is that it need only require the employer to give information and to seek employees' views on relevant matters (rather than having to consult them or their representatives, in some circumstances with a view to reaching agreement).

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