Information and Consultation

There are a number of distinct situations when an employer is obliged to consult with its staff. Some of these situations are prescribed by legislation and regulations; others arise from the need to ensure agreement to specific contractual changes.

1. European Law

A set of regulations called the Transnational Information and Consultation of Employees Regulations 1999 implement certain EU consultation obligations in the UK. However, these regulations are, in practice, only of concern to large employers that employ staff in at least 2 EU member states. Companies with over 1,000 employees in EU states, that have at least 150 employees in 2 or more EU states, must have in place a European Works Council (EWC), or an equivalent procedure. The aim of the EWC is to provide “transitional information and consultation” for the entire workforce. The calculation of the number of employees includes part-time workers as well as full-time workers.

The creation of a EWC can be instigated by a written request signed by at least 100 employees or their representatives, in at least two of the states directly affected. There are detailed provisions about the election or appointment of members of the special negotiating body, the SNB. Employees are allowed to take reasonable paid time off work to perform their functions as members of the SNB, or as candidates in an election to be a member or representative.

Central management of the business and the SNB are obliged to negotiate in a spirit of co-operation, with a view to reaching agreement on the detailed arrangements for implementing information and consultation.

The subjects of the information and consultation are for the SNB and central management to agree. However, the object is to involve the employees in matters which significantly affect workers. This may include:-

• Structure of the business
• Methods of working
• New processes
• Finance
• Production and sales, and
• Employment numbers.

2. Redundancies

a. Small scale redundancies: fewer than 20 people

The many cases on this subject indicate that even when fewer than 20 employees are facing possible redundancy it is essential to the fairness of any resulting redundancy dismissal that there is some degree of consultation with affected staff. The actual extent and detail of the consultation will depend on the particular circumstances. In essence there should be some consultation over the possibility of finding measures to avoid the need for redundancies, the selection criteria to be used, and the possibility of finding alternative suitable employment with the employer.

b. Large Scale redundancies:20 or more people in a 90 day period

Specific legislation sets out rules on dealing with large scale redundancy procedures. These apply when the employer is proposing to make 20 or more employees redundant over a 90 day period or less.

Even if the employer hopes that some of the jobs losses will be by voluntary methods the statutory procedures will still apply. In these the cases consultation is required to try to:-

i. Avoid the dismissals for redundancy,

ii. Reduce the number of possible redundancies, or

iii. Mitigate the consequences of the redundancies.

It is crucial that consultation has conducted before the notice of redundancy is finally issued to the relevant staff. Information and consultation should be with any recognised trade union – if there is one. Failing that it should be conducted with employee representatives. Set pieces of information must be provided to the representatives in writing, including (but not exclusively):-

iv. The reasons for the proposal,

v. The numbers and descriptions (i.e. by reference to a department, or particular skill, or group) of employees it is proposed to make redundant,

vi. The proposed method of selection for redundancy.

The consultation period must be at least 30 days, unless 100 or more employees may be affected –in which case it must be at least 90 days.

3. Transfer of Business

The transfer of undertakings (Protection of Employment) Regulations 2006 will be relevant when there is a transfer of a business, or a distinct part of a business, or contracting out of a distinct service to another employer – which can include to sister or parent companies. The aim of these regulations is to preserve the employment of the affected staff, together with their employment rights, when they are transferred from one employer to another.

The regulations oblige the employer to provide information to and consult with the affected staff. There is no minimum threshold number of staff in these regulations, so this obligation arises even if there is only one employee affected!

Information to be provided to the employees in these cases include:-

a. The fact the transfer is going to take place,

b. When and why it is to take place,

c. Its legal, economic and social implications for affected employees, and

d. Any action the prospective new employer proposes to take which would affect the employees.

There is no specified minimum period of consultation, however it must be such that allows adequate time for consultation. There are rules on the election of staff representatives (link PAYG) for the purpose of consultation (see PAYG). The original employer “transferor” is obliged to provide certain information about the employees to the proposed new employer (see link PAYG), and this must be provided before a set date prior to the transfer.

4. Health and Safety

Employers are obliged to consult with staff health and safety representatives about any health and safety matter affecting the workforce.

If the employer recognises a trade union the trade union can select the appropriate health and safety representative. If there is no recognised trade union the employer must either inform and consult the employees directly, or via elected representatives. Consultation must be conducted about, amongst others, any health and safety training, and the health and safety consequences of introducing any new plant, machinery or equipment into the workplace.

5. The Information and Consultation of employees Regulations 2004

These regulations originally only applied to businesses with 150 or more employees. However, from April 2007 they have applied to businesses with 100 or more employees. From 2008 they will apply to businesses with 50 or more employees.

These regulations give employees the right to be informed about the business’s economic situation. In addition they give employees the right to be both informed and consulted bout employment prospects, and decisions which are likely to lead to substantial changes in work organisation or contractual relations. Employers may choose to instigate the information and consultation processes themselves, or instigate them on receipt of a request from their employees. There are complex rules on the correct form of request from employees.

These regulations apply to both unionised and non-unionised workplaces, and require employers to provide information on a wide range of subjects, and areas of their businesses. It is therefore vital that the employer control the extent of the range of information and consultation by maintaining the momentum in creating the basis of the agreement with the employees over the scope of these regulations in their businesses (PAYG).

6. Miscellaneous Contractual Issues

As a general point of contract law, all changes to terms and conditions of employment should be agreed with employees rather than simply being imposed on them. To unilaterally impose new terms and conditions can give rise to claims of constructive dismissal. Therefore proposed changes should always be the subject of discussion and consultation with staff.