It pays to be informed

Amicus v Macmillan Publishers Ltd

The Information and Consultation of Employees Regulations 2004 state that employers who fail to comply can be fined up to £75,000.

In Amicus v Macmillan Publishers Ltd, the Employment Appeal Tribunal (EAT) fined the company £55,000 for its “cavalier attitude” to their obligations under the regulations.

The regulations

The regulations (which at the time applied only to undertakings with at least 150 employees) state that employers have to initiate a negotiating process for Information and Consultation (I and C) arrangements, once they receive a valid request from at least 10 per cent of their employees. If they fail to reach an agreement within six months of the request, they have to abide by standard provisions set out in the regulations.

The only other option is under regulation 8. This states that if there are pre-existing agreements (PEAs) that have already been approved covering all employees, the employer only has to negotiate a new agreement if 40 per cent of the workforce asks them to.

If only 10 to 40 per cent ask for the agreement, the employer can hold a ballot to gauge the level of support. The obligation to negotiate then arises if at least 40 per cent of the workforce and a majority of those voting endorse the request.

Basic facts

On 15 March 2006, Amicus submitted an employee request to the company to negotiate an I and C agreement that was signed by 196 employees (out of a possible 1372). This was conveyed formally by the Central Arbitration Committee (CAC) to both parties on 6 April, confirming that the application was appropriate.

As the company then failed to negotiate with the union by 15 September 2006, the standard provisions applied. The union complained to the CAC in November 2006 that not only had they not been set up, but the employer had failed to take any steps even to conduct the relevant ballot.

Macmillan argued that it already had PEAs in place which were supported by “a significant majority of the workforce”, although confusingly it also agreed that the standard procedures applied.

In February 2007, the CAC upheld the union’s complaint that Macmillan was in breach of the regulations. As the CAC has no power to impose a sanction, Amicus asked the EAT to issue a penalty notice.

EAT decision

Perhaps not surprisingly, the EAT agreed with the union, saying that “this was a significant failure because it must have been plain, reading the legislation, that the relevant provisions were being ignored at almost every stage”. This failure was compounded by the fact that the employers had been found to be in breach of the same regulations on a number of other occasions.

These breaches were also aggravated by the company’s failure to honour the CAC’s order in February. The EAT commented that “it is difficult not to form the impression that it is opposed to these regulations and is seeking to delay their implementation for as long as it reasonably can.”

It decided, therefore, in fixing a penalty, “to stipulate a sum which, within the limits imposed by the legislation, will deter others from adopting what can only be described as the wholly cavalier attitude to their obligations that has been demonstrated by this company.” Out of a maximum of £75,000 the EAT fined Macmillan £55,000.