INFORMATION & CONSULTATION

Are You Ready ?

Tom Flanagan

7 October 2004

Popular Misconceptions• The new Regs require you to create a

“Domestic Works Council” - NO !

• You must put something in place by 6 April 2005 - NO !

• A Pre-Existing Agreement means that you escape the Regs requirements - NO !

• If you satisfy these Regs, you avoid the risk of penalties under existing laws on TUPE and collective redundancy - Not necessarily !!

Structure of Talk

• Choose your approach

• Directive: basic principles

• Regulations: current state / introduction

• Overview

• Key practical issues

• Practical solutions

Choose your Approach

• Don’t care / too busy / irrelevant

• Compliant

• Gain positive advantage (“High

Performance Workplace”)

• Evangelical

The Directive - Basic Principles (1)

• General framework - up to Member States• Existing law on I&C inadequate• Earlier I&C preferred (Renault / M&S /

Vauxhall)• 3 levels: (Article 4):

– inform– inform and consult– …with a view to reaching agreement

The Directive - Basic Principles (2)

• Exception (Article 5)

• Basis of “Pre-Existing Agreement”

• Agreement between “management and labour”

• Which does not need to follow Article 4

• As long as “respecting the principles laid down in Article 1”

I&C Regs: Current State of Play

• In force by 25 March 2005

• UK Government plans 6 April 2005

• 2 Consultation Papers: “High Performance Workplaces” - 2002/2003

• Current Draft Regs / DTI Guidance

• DTI seeks views before 22 October 2004

• Possibility of further change ?

I&C Regs: Introduction

• April 2005: >150 employees (c.14,000)

• March 2007: >100 employees

• March 2008: >50 employees (c.38,000 in all)

• Employees “in the undertaking”

Overview

• “High Performance Workplaces”

• Flexibility (allegedly)

• Obligation to I&C

• Comply with Directive

• Empowering Trade Unions ?

Overview : The Structure of the Regs (1)

• Voluntary

• Negotiated

• Statutory

Overview : The Structure of the Regs (2)

• Obligation to negotiate an I&C process• if either/or…

– employer volunteers– trigger is pulled

• Trigger: – 10% of workforce– min. 15% / max 2,500

• Unless: pre-existing agreement• If neither: Standard Provisions (statutory fall-back)

Key Practical Issues

• Undertaking

• Pre-existing agreement

• Sanctions

• Overlap with existing law

Undertaking

• “a public or private undertaking carrying out an economic activity, whether or not for gain…” (similar to “old” TUPE

• DTI: “a separately incorporated legal entity” (why?)

• Not “establishment, division or business unit of a Company”

• But if TUPE jurisprudence applies, DTI guidance must be doubtful

Significance of Undertaking

• Application

• Trigger

• Pre-existing agreement

• Election / appointment of negotiating reps

• Election of I&C reps

Pre-Existing Agreements (1)

• Valid employee request (10%/2,500 (etc))• By less than 40% “in the undertaking”• Agreement

– in writing– covers all employees “in the

undertaking”– approved by the employees– sets out I&C procedures

• More than one undertaking’s employees

Pre-Existing Agreements (2)

• Content not prescriptive

• ACAS guidelines

• Different parts of undertaking

• As long as, together, cover all employees of the undertaking

• Collective agreements

Pre-Existing Agreements (3)Employee Approval

• Simple majority in ballot

• Majority through signatures

• Agreement of those representing majority

• Different methods for different agreements

Pre-Existing Agreements (4)Effect

• No “Article 13” opt-out• Still have to ballot or negotiate• 40%+ majority = endorsement negotiate• Pre-existing agreements still exist?

(Collective Agreements)• <40% or minority = no endorsement• Therefore, no obligation to negotiate• Pre-existing agreement stands• 3 year moratorium

Pre-Existing Agreements (5)Effect

• Does not let you off the hook

• Still need a ballot

• If survives - 3 year moratorium

• If it doesn’t survive - negotiate a new I&C process

• Going on to the negotiated procedure

Do You Have a Pre-Existing Agreement ?

• Irrelevant unless trigger pulled already

• Don’t drive policy based wholly on it

• Adapt existing processes

• …with half an eye to a PEA

• Unlikely that you can satisfy it

Why is it Unlikely ?

• Covers all employees in the

undertaking

• Approval of the workforce

Sanctions

• Complaint to CAC (not for PEAs)

• Declaration

• Penalty notice, from EAT

• Max of £75,000 per failure

• Paid to DTI

Overlap with Existing Law (1)

• Collective Redundancies (s188 TULRCA)• TUPE• “Double” jeopardy

– protective award: redundancy - up to 3 months

– compensation: TUPE - up to 13 weeks– I&C Regs: up to £75,000 fine

Overlap with Existing Law (2)

• Overlapping obligations

– redundancy: TU Reps / elected

– TUPE: TU Reps / elected

– ICON: reps under Regs

• Exclude ICON in redundancy / TUPE cases ?

• Hidden trap ?

Practical Solutions• Employees in the undertaking

– umbrella agreement– sub-committees

• Employee approval– existing procedures– reps are truly representative– “employee representative” not defined

• Voluntary / PEA: do what you like ?• Collective agreements survive a PEA

Conclusion

• “DON’T PANIC

• Avoid the trigger

• Not necessarily a PEA

• Satisfied workforce

• Engage trade unions