5th June 2007

INFORMATION
UPDATE

 Issue No.  2007/15

 Sentient
              

 

REMINDER

At the risk of repeating ourselves, we include below the detail of our March 2005 update.  Why?  To reinforce the fact that the Information and Consultation Regulations now affect employers of 100 or more employees.  It will affect more employers in April 2008 when the application threshold reduces to 50 employees.
 
INFORMATION AND CONSULTATION REGULATIONS
 
The purpose of the Information and Consultation of Employees Regulations is to give employees in larger firms the right to be informed and consulted with on a regular basis about issues in the business in which they work.
 
There is a phased introduction of these Regulations which is dependent upon the size of your organisation.
 

NUMBER OF EMPLOYEES
ACTION DATE
150 +
1st April 2005
100 - 149
1st April 2007
50 - 99
1st April 2008

 
Thankfully, the Regulations will not apply to businesses with less than 50 employees.
 
The Regulations apply to both public and private undertakings which are situated in Great Britain that carry out an “economic activity” whether or not operating for gain. Organisations that are not carrying out “economic activity” will be a minority – Can you think of an organisation that does not carry out an “economic activity”?
 
Providing your organisation is carrying out an economic activity, and that you have the appropriate number of employees, the Regulations apply.  However, the requirement to inform and consult employees does not operate automatically. 
 
 
WHAT WILL TRIGGER THE REGULATIONS?                                    
The Regulations will only apply if triggered by either: -
  • a formal request from employees for an Information and Consultation (I&C) agreement, or
  • by employers choosing to start the process themselves. 
WHAT IS AN “I&C” AGREEMENT?                                          
An agreement must set out how the employer will inform and consult employees or their representatives on an on-going basis. The Regulations allow you to agree arrangements and structures tailored to your individual circumstances.  The Regulations also provide for the retention of pre-existing agreements which have workforce support.  Agreements may cover more than one company, or establish different arrangements in different parts of a company. 
 
A negotiated agreement must: set out the circumstances in which the employer will inform and consult their employees; provide either for communication through employee I&C representatives or for information and consultation directly with employees (or both); be in writing, be dated and signed by the employer; cover all the employees of the undertaking; and be approved by 50% of the employees.
 
It is for the parties to agree more detailed issues such as: method, subject-matter, frequency and timing of information and consultation arrangements.
 
WHAT HAPPENS IF THERE IS A PRE-EXISTING AGREEMENT?
A Pre-existing Agreement may be advantageous as it can act as a “buffer” against formal requests for an ‘I&C’ Agreement as specified by legislation.
      Pre-existing Agreements must:
  • Be in writing
  • Cover all the employees of your undertaking
  • Be “approved” by the employees
  • Set out how the employer is to give information to employees or their representatives and to seek their views on such information.
If you receive a request from employees for formal negotiations you must enter into negotiations to reach a formal I&C Agreement within 3 months. However, you will not have to do this if:
  • There is a Pre-existing Agreement in place, and
  • Fewer than 40% of the employees covered by the Pre-existing Agreement have made the request.
WHAT HAPPENS IF AGREEMENT IS NOT REACHED?                                
Where negotiations have taken place but failed to reach an agreement, employers have a further 6 months to set up the necessary information and consultation structures.  This period provide employers with time to arrange the election of I&C representatives.  It also provides a further limited period to try and reach a negotiated agreement. If no negotiated agreement is achieved by the end of this further 6 month period, and no ballot has been arranged to elect I&C representatives, then employers will be liable to a penalty.
 
Where employers are required to, but fail to initiate negotiations for an I&C agreement, the standard provisions will automatically apply 6 months after a valid employee request is made or the employer has made a notification under regulation 11. The employer must have arranged for the election of I&C representatives before the end of this 6 month period, or will be liable to a penalty.
 
As a guide, the number of representatives should be 1 per 50 employees but with a minimum of 2 and a maximum of 25 representatives.
 
Where I&C representatives are elected before the end of the 6 month period in which they must be elected, the standard information and consultation provisions begin to apply at that point.
 
The Regulations are designed to minimise the potential for disputes arising throughout the process but, where these do occur and cannot be settled, the Central Arbitration Committee can resolve them.
 
WHAT ARE THE STANDARD PROVISIONS?                          
These provisions begin to apply once the I&C representatives have been elected.
 
The requirements will vary depending on the circumstances of the organisation. For example, in a restructuring programme, more frequent information and consultation may be appropriate. I&C representatives should have the opportunity to express their views on the subject matter, frequency, timing and method of consultation.
 
There are three categories of information that employers who are subject to the standard provisions must provide to I&C representatives:
 
CATEGORY A INFORMATION
Information on “the recent and probable development of the undertaking’s activities and economic situation”. This is about helping I&C representatives understand the context in which decisions affecting employment, work organisation and employees’ contractual relations are made.  This can include: the launch, change of discontinuance of products and services; increase/decrease in product sales; developments in technology and work methods; re-organisation of company structure; changes in senior management; change in company’s aims and objectives; trading conditions; outlook on market sector; state of order book; financial position.
 
CATEGORY B INFORMATION
Information on “the situation, structure and probable development of employment within the undertaking and on any anticipatory measures envisaged, in particular, where there is a threat to employment within the undertaking”. The emphasis here is on the overall number of employees within the undertaking.  This can include: Recruitment; redundancy; staff turnover; geographic location of workforce; training and skill development.
 
CATEGORY C INFORMATION
Information on “decisions likely to lead to substantial changes in work organisation or in contractual relations”. This includes decisions covered by the legislation on collective redundancies and transfers of undertakings. This can include changes to staff numbers; proposals to change hours, shift systems, work patterns; new employer (following transfer); changes to contractual terms and benefits; changes to occupational pension scheme.
 
WHAT DOES THIS MEAN?                                  
The simple solution is to ring us if you want to invoke the Information and Consultation provisions, or if you receive a request from an employee or employees – we can then talk to you and tailor our advice to your organisations specifics needs including assistance with the I&C agreement. 
 
Similarly, if you would like us to assist you set up a Pre-existing Agreement please give us a call.
 
AND A FINAL REMINDER:
 
All our Information Updates are available on our website www.sentientuk.co.uk.
 
Just click on “Update Archives” on the menu on the left of the Home Page.
 

 

 

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