Employers and Consultation

4 07 2009

What obligations are there on an employer to consult with its workforce and when should they do so?  Many people will be aware of the provisions of s.188 of the Trade Union and Labour Relations (Consolidation) Act 1992 which imposes a requirement on all employers making 20 or more staff redundant in a 90 day period to collectively consult with any recognised Trade Union or employee representatives on the need for and ways of avoiding redundancies.    I’ve covered this issue before and it is particularly relevant in the current climate of large numbers of redundancies.

However, there is a more general obligation to consult, on a much wider basis under the provisions of the Information and Consultation of Employees Regulations 2004 SI 2004/3426(ICER).  The regs. apply to “undertakings” with more than 50 employees (it was more but have been gradually whittled down since 2005). An undertaking can be a public or private business or not-for-profit organisation. In brief if more than 10% of the employees in that company (and that does not include group companies) request the employer to inform them or consult with them about matters affecting the business, the employer must set up a consultation system.  If the employer fails to do so they can be fined up to a maximum of £75,000 by the Employment Appeals Tribunal.  If an employee is dismissed for exercising his/her rights under the regs, that will be an automatically unfair dismissal, meaning no qualifying period of employment is required (usually 12 months is needed) but the claim will be capped at the current maximum of £66,200, although this increases each February in line with inflation.

What does the employer have to do?

The regs require the employer to provide employee representatives with information on the following issues;

  1.  Future developments in the business, its activities and economic situation
  2. The employment situation in the business and any threats to employment
  3. Any decisions likely to lead to substantial changes in the workforce, e.g restructuring of the workforce or the business

The employer has to set up a system of ballots and facilities to allow the information to be disseminated and for consultation to take place and the regs make it clear that the employer must consult with and provide the information so that it can be considered and digested by the employee representatives prior to consultations.

The regs do not require the employer to consult in respect of pension issues where there is a duty to inform and consult under the Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006 SI 2006/349 (and as amended).  Also, in mass redundancy situations, if the employer announces that it will consult in accordance with s.188 TULR(C)A 1992  there is no need for it also to consult under ICER.

Complaints of non-compliance are made to faintly sinister sounding Central Arbitration Committee (CAC).  This isn’t some ancient remnant of the old USSR but a statutory body headed up by a senior employment Judge.  It has various duties under the regs to monitor, supervise and enforce.

Quite frankly, I find the regs rather underwhelming and I await my first client complaining of being dismissed for seeking to exercise his/her rights under them.  I would welcome feedback from anyone, employer employee or lawyer on what difference the regs really make.




One response

6 07 2009
Peter Lawton

Dear Jobsworth,

I’m so glad you raised the topic of information and consultation.

My experience is that the Regs appear to provide a framework on which the employer can hang various HR-led procedures but otherwise they appear relatively meaningless to your average employee. Putting my cynicism aside for a moment I concede that a well-constructed, reasonable and meaningful agreement is the real key to the success here. That is until poorly enlightened employees eventually spot that their constitution and agreement is one that was cleverly recommended by a legally well-briefed employer prior to the implementation of the Regs and by which the workforce is rendered pretty much impotent.

What can an unhappy consultative body do with an enduring (indefinite) pre-existing agreement they believe no longer serves the best interests of employees – write another one??

I am led to believe the Regs provide for a negotiated agreement if greater than 40% of employees require a change? Such a challenge is easier said than done, methinks? But it’d be nice to give the Politburo something to do by the sounds of things??

I suspect this may not be Jobsworth’s only post on this topic…..


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