Richard Arthur, who leads Thompsons Trade Union Law Group, takes a detailed look at how the Information and Consultation Regulations work.
The Information and Consultation of Employees Regulations 2004, which implement EU Directive 2002/14/EC, are far from straightforward.
However, they can be useful to trade union reps as long as they remember the most important point of all – that the rights and obligations only apply if they (or the employer) actually trigger the procedures in the first place.
Numbers of employees
It is crucial to know how many employees are in the undertaking because the regulations only apply to those with 50 or more, and because of the threshold percentages of employees required to initiate the procedures. See “Negotiation” below”.
The number of employees is calculated using the average for the preceding 12 months. Employees or their representatives can submit a request to the employer that must be in writing and dated. If the employer fails to disclose the information within a month, the reps can make an application to the Central Arbitration Committee (CAC) for disclosure.
The process can be initiated either by the employer, or by a “valid employee request”, but it must be in writing; be sent to the employer’s registered or principal office, or the CAC; and specify the date on which it was sent.
What happens next depends on whether there is a “pre-existing agreement” (PEA) and the percentage of employees making the request.
A PEA is an agreement which:
- is in writing
- covers all the employees in the undertaking
- has been “approved by the employees”
- sets out “how the employer is to give information to the employees or their representatives and seek their views on such information”.
Existing collective agreements can be valid PEAs if they satisfy all the above requirements but they must set out how information and consultation is to be carried out. Approval by trade union representatives counts as “approval by the employees”.
Once one of the following conditions is satisfied, the parties can move on to the negotiation stage:
- there is no PEA, but the request has been made by at least 10 per cent of the employees
- there is a PEA and the request is made by at least 10 per cent of the employees, but the PEA does not satisfy all the criteria set out above
- there is a valid PEA, but there has been a request by 40 per cent or more of the employees
- there is a valid PEA, but there has been a request made by between 10 and 40 per cent of employees and a majority of those voting and more than 40 per cent of the workforce has approved the request in a ballot
- the employer has triggered the negotiations.
As soon as is reasonably practical after that, the employer must:
- make arrangements for the employees to appoint or elect “negotiating representatives”
- inform the employees in writing of the identity of the negotiating representatives once elected or appointed
- invite the negotiating representatives to enter into negotiations to reach a negotiated agreement.
The regulations do not specify how many negotiating representatives there should be but they must represent all employees in the undertaking.
The negotiations to reach a negotiated agreement can last for a maximum period of six months from the end of the three-month period beginning with the date of the valid employee request. There are a few exceptions, but these are mainly to do with complaints to the CAC.
A “negotiated agreement” must:
- set out the circumstances in which the employer has to inform and consult their employees
- be dated and in writing
- cover all the employees of the undertaking
- be “approved”
- be signed by or on behalf of the employer and
- either provide for the appointment or election of “information and consultation representatives”, or state that the employer must provide information directly to the employees of the undertaking and consult the employees directly.
There is no required subject matter for the negotiated agreement. That is for the negotiating representatives and the employer to agree on.
The negotiated agreement will be taken to have been “approved” if all the negotiating representatives sign it; or if a majority sign it and at least 50 per cent of the employees either approve it in writing or in a ballot.
Employees cannot trigger further negotiations for three years once they have concluded the negotiation stage.
Standard information and consultation provisions
The standard information and consultation provisions apply if the employer is supposed to initiate negotiations for a negotiated agreement but fails to do so. Either that or the negotiations to reach a negotiated agreement are not successful within the six month period.
If the standard provisions do apply, the employer must arrange to hold a ballot of their employees to elect the relevant number of information and consultation representatives – one representative per 50 employees, subject to a maximum of 25.
The employer must then provide the information and consultation representatives with information about:
- the recent and probable development of the undertaking’s activities and economic situation
- the situation, structure and probable development of employment within the undertaking and any anticipatory measures envisaged, in particular where there is a threat to employment within the undertaking
- decisions likely to lead to substantial changes in work organisation or in contractual relations, including those referred to in collective redundancies legislation and TUPE.
That information must be given at such a time and in enough detail to enable the information and consultation representatives to prepare for consultation.
The employer must then consult the reps at the relevant level of management with a view to reaching decisions that are “within the scope of the employer’s powers”.
Compliance and enforcement
Reps can make a complaint to the CAC (within three months of the alleged infringement) if the employer fails to comply with a negotiated agreement, or fails to properly apply the standard information and consultation provisions.
The CAC can then order the defaulter to take steps to comply with their obligations under the negotiated agreement by a certain date. If the employer again fails to comply, the union can apply to the Employment Appeal Tribunal (EAT) for a penalty notice.
The maximum that can be awarded is £75,000, but this is payable to the Secretary of State. In Amicus -v- MacMillan Publishers Ltd, for instance, the EAT imposed a penalty of £55,000.
The CAC cannot actually restrain any action on the part of the employer and it cannot impose an injunction.
Negotiating representatives, information and consultation representatives and experts assisting them may not disclose confidential information, unless it would amount to a “protected disclosure” under the whistleblowing provisions of the Employment Rights Act 1996.
Anyone who receives confidential information can apply to the CAC for a declaration as to whether or not it was reasonable for the employer to impose such a requirement.
The employer is not required to disclose any information or document when the nature of the information or document is such that “… according to objective criteria, the disclosure of the information or document would seriously harm the functioning of, or would be prejudicial to, the undertaking.”
If there is a dispute as to whether or not information can validly be withheld, either the employer or someone who receives it may apply to the CAC for a declaration as to whether it should be withheld.
With notable exceptions, trade unions have not used the regulations much since they were introduced. This may be because they do not give precedence to trade union representatives at the stage of election or appointment of negotiating or information and consultation reps.
However, it could be argued that the procedures under the regulations can lead to the establishment of mechanisms outside recognised trade union collective bargaining and consultation arrangements, thus diluting the influence of the union.
That said, there may be circumstances in which using the regulations could be useful. Triggering the procedures might be viewed as a step along the way to recognition. Unions may also put forward their own candidates for election or appointment as negotiating and/or information and consultation representatives.
At the very least, the subject matter of the standard information and consultation provisions is wide-ranging and might be used as the basis for the negotiation of recognition and other collective agreements.