Employee Voice

Bibliography: Edwards (2003) Industrial Relations Theory & Practice (second edition), Blackwell, Chapter 14 Appendix 1 Informing and Consulting Employees ' ' A Brief Guide to the Legislation Who will be affected? The Information and Consultation of Employees Regulations give employees in larger firms ' ' those with 50 or more employees ' ' rights to be informed and consulted on a regular basis about issues in the business for which they work. The Regulations apply to businesses with:- 150+ employees from 6 April 2005; 100+ employees from 6 April 2007; and 50+ employees from 6 April 2008. They will not apply to businesses with less than 50 employees. The Regulations apply to public and private undertakings situated in Great Britain that carry out an economic activity whether or not operating for gain. This covers companies, partnerships, co-operatives, mutuals, building societies, friendly societies, associations, trade unions, charities and individuals who are employers, if they carry out an economic activity. It may also include schools, colleges, universities, NHS trusts, and central and local Government bodies, again, if they carry out an economic activity. Ultimately it is a matter for the courts to decide, on a case-by-case basis, whether an organisation is carrying out an economic activity. However, further information may be obtained from the DTI’s guidance which is available on its website Overview of the Regulations The requirement to inform and consult employees does not operate automatically. It is triggered either by a formal request from employees for an Information and Consultation (I&C) agreement, or by employers choosing to start the process themselves. An agreement must set out how the employer will inform and consult employees or their representatives on an on-going basis, but the legislation lets them agree arrangements and structures tailored to their 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. Where no agreement is reached following an employee request, certain “standard” provisions for informing and consulting representatives of employees would apply. 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. Key Aspects of the Information and Consultation Regulations There are a number important steps that need to be taken during the process of creating an Information and Consultation agreement. Some of the more significant are listed below. • An employee request to negotiate an I&C agreement must be made by at least 10% of the employees in the undertaking (subject to a minimum of 15 and a maximum of 2,500 employees). • Upon receipt of a valid request an employer must negotiate an agreement unless there is a valid pre-existing agreement in place (see section on pre-existing agreements below). • There is a 3-year moratorium on employee requests where: (1) a negotiated agreement is already in force; or (2) the standard I&C provisions apply; or (3) an earlier employee request to negotiate a new I&C agreement in place of a pre-existing agreement was not endorsed by the workforce in a ballot. • Employers must initiate negotiations for an agreement no later than three months after a valid request is made. During this 3- month period the employer must make arrangements for the appointment or election of employee negotiating representatives. • Negotiations can last for up to 6 months, but the employer and representatives can agree to extend this period for as long as they like in order to reach an agreement. • A negotiated agreement must:- (i) set out the circumstances in which the employer will inform and consult their employees; (ii) provide either for employee I&C representatives or for information and consultation directly with employees (or both); (iii) be in writing and dated; (iv) cover all the employees of the undertaking; (v) be signed by the employer; and (vi) be approved by the employees. • More detailed issues such as method, subject-matter, frequency and timing of information and consultation arrangements will be for the parties to agree. • Agreements may cover more than one undertaking or provide for different arrangements in different parts of an undertaking, such as individual establishments (sites), divisions, business units or sections of the workforce. • The standard I&C provisions in the Regulations apply where negotiations fail to lead to an agreement or where an employer fails to initiate negotiations following a valid employee request. The Regulations allow employers and I&C representatives to come to a different negotiated agreement at any time after the standard provisions are applied. • Where the standard I&C provisions apply, employee I&C representatives are to be elected and the employer must inform and consult them in the way set out in the Regulations, namely: Information on: (i) the recent and probable development of the undertaking’s activities and economic situation. The purpose of this information is to help I&C representatives understand the context in which decisions affecting employment, work organisation and employees’ contractual relations are made; Information and consultation on: (ii) the situation, structure and probable development of employment within the undertaking and, in particular, on any anticipatory measures envisaged where there is a threat to employment within the undertaking. The emphasis here is on the overall number of employees within the undertaking; and Information and consultation with a view to reaching agreement on: (iii) decisions likely to lead to substantial changes in work organisation or in contractual relations. “Contractual relations” means employers’ contractual relations with their employees. • Decisions in category (iii) above include decisions on collective redundancies and business transfers ' ' areas which are already covered by existing legal obligations to consult employee representatives. However, employers will not need to consult on these decisions under the standard I&C provisions where they notify I&C representatives, on a case-by-case basis, that they will be consulting under the legislation on collective redundancies or business transfers. Employers may wish to include a provision addressing this issue in any negotiated agreement. • Consultation means giving enough time and information to allow I&C representatives to consider the matter and form a view, with genuine and conscientious consideration of that view by the employer. The standard I&C provisions require the employer to meet the I&C representatives at a level of management relevant to the subject under discussion, and to give a reasoned response to any opinion they may give. • Employers are not obliged to follow I&C representatives’ opinion. Consultation is different from negotiation, collective bargaining or joint decision-making. Decision-making remains the responsibility of management. Employers must aim to reach agreement on decisions in category (c) above, though sometimes agreement may not be possible. • Employers may, on confidentiality grounds, restrict information provided to I&C representatives in the legitimate interests of the undertaking. They may also withhold information from them altogether where its disclosure would be prejudicial to, or seriously harm, the functioning of the undertaking. • There are provisions to protect employees who seek to exercise their legal rights. • In the case of a negotiated agreement under the Regulations, or where the standard I&C provisions apply, complaints of failure to abide by the agreement or by the standard provisions may be brought to the Central Arbitration Committee. Pre-existing agreements As a general rule, when a valid employee request is made, the employer will come under an obligation to negotiate an I&C agreement with representatives of the employees. However, there is an important exception where employers already have in place one or more pre-existing I&C agreements approved by employees. Instead of negotiating a new agreement, they may ballot the workforce to ascertain whether it endorses the request by employees. If they choose not to ballot the workforce, they will come under the obligation to negotiate a new agreement. Where a ballot is held, and 40% of the workforce plus a majority of those who vote, endorses the employee request, the employer would come under the obligation to negotiate a new agreement. Where fewer than 40% of the workforce or a minority of those voting endorses the employee request, the employer would not come under an obligation to negotiate a new agreement, and a three-year moratorium on further employee requests would begin. A pre-existing agreement may cover employees in more than one undertaking, in which case employers may hold a single ballot of the employees in all the undertakings covered by the agreement. Before holding a ballot to endorse an employee request, employers must inform the employees within one month of the request that they intend to do so. They must then wait 21 days before holding the ballot, in case employees wish to challenge the validity of the pre-existing agreement(s) at the Central Arbitration Committee. To be valid, pre-existing agreements must: (1) be in writing; (2) cover all the employees in the undertaking (though there may be several agreements which between them cover all the employees, and agreements may cover employees in more than one undertaking); (3) set out how the employer will inform and consult the employees or their representatives. The legislation does not impose any requirements or set any restrictions, on the method, frequency, timing or subject-matter of the information and consultation arrangements set up under pre-existing agreements; and (4) be approved by the employees. This would include support indicated by a simple majority among those voting in a ballot of the workforce; a majority of the workforce expressing support through signatures; or the agreement of representatives of employees (including trade union and other appropriate representatives) who represent a majority of the workforce. Different agreements may cover different parts of an undertaking, such as different establishments (sites), business units or sections of the workforce. They may establish different consultation arrangements in these different parts of the undertaking, and may be approved by employees separately, in different ways and at different times. FURTHER GUIDANCE For more information, see the full DTI Guidance. For practical advice on how to develop and maintain effective information and consultation arrangements, visit the Acas website. Appendix 2 Wall’s Ice Cream Background The Wall’s ice cream factory in Gloucester is one of 11 ice cream factories owned by Unilever in Europe. It has 450 employees, and uses additional 50-100 agency workers on a seasonal basis when demand increases. The site is strongly unionised, in common with many manufacturing businesses, a substantial majority of the workforce being union members. There are three recognised unions ' ' the Transport & General Workers, Amicus and the GMB. Wall’s has been informing and consulting employees for many years, and had a partnership agreement with the unions. But in 2002/3 there was a major restructuring exercise involving 320 compulsory redundancies. The fact that it was carried out in just 5 months was testament to the good employment relations that had been built up in the previous years. Nevertheless, there was a clear feeling at the time that a new approach to employee involvement would be needed if the factory was to survive in an increasingly competitive environment. Both sides saw the need for more structure to their arrangements, and for broader consultation to include non-trade union representatives. Following discussions with trade unions, the company launched “Fresh Start for Partnership” in April 2003, a key aspect of which was new arrangements for informing and consulting employees. Information & Consultation practices The new arrangements are made up of two parts ' ' the Partnership Steering Group and the Partnership Council. The Steering Group comprises the factory manager (who chairs it), the HR manager, two managers from manufacturing, and four senior trade union shop stewards. The Partnership Council is made up of 9 constituencies with two representatives from each. Representatives on the Council are chosen by nomination and secret ballot to serve for a period of two years. They may be of any grade, and do not have to be trade union members. Each represents between 15 and 50 employees. In addition, sub-groups can be appointed to investigate specific issues. The Steering Group meets monthly, while the Council meets with the Steering Group every quarter. Partnership Councillors are also invited to monthly update meetings for first line managers. The Partnership agreement distinguishes between: information ' ' issues on which information is shared and any views expressed are formally noted, for example, Unilever’s policies and procedures that are set nationally; consultation - employee input is sought and is expected to influence a decision, for example, local polices; and consensus - employee input is sought and an attempt is made to reach agreement on an issue, for example, a recent proposal to ban wearing weddings rings on the shopfloor. For each issue it is made clear which form consultation will take, and whether management is consulting on a policy itself or just on its implementation. After each meeting a joint statement recording the outcome of the meeting is agreed and issued to all employees within 24 hours. Partnership representatives would also be involved in communicating and explaining company decisions, which can be very helpful in achieving acceptance. What makes it work Management has a very open and transparent approach with employee representatives. In particular, it shares issues with the members of the Steering Group in confidence at a very early stage of the decision-making process. It will often discuss options for responding to a problem, rather than just presenting solutions, and this has been very useful in helping them understand the pressures facing the business, and the need to take action. Maturity of relationships has helped secure a high degree of trust. So for example, it will discuss the need for additional shifts or reductions in volume several months in advance. A new minimum hours contract was introduced which it began discussing with the Steering Group twelve months before it actually happened. This very open approach, at a stage when decisions may be little more than a “glint in the eye”, can be challenging at times. And not just for management. Trade union representatives have to be able to handle information that is confidential and sensitive over an extended period of time. It can lay them open to accusations of siding with management. They have been given the option of not having sensitive information in advance, but are clear that they would prefer to be involved in decision-making in this way, even at the risk of misunderstanding or criticism, rather than just react to decisions. The Future The emphasis going forward is on: • Ongoing development of the partnership relationship and forums: to enable continuous improvement and maintain high levels of effectiveness and productivity in spite of changes in personnel in key roles, including a new HR Manager. • Development of local partnership in the context of national Unilever changes: with Unilever UK moving to its ‘One Unilever’ national structure, Gloucester will need to ensure local arrangements interface with the changing structure of Unilever’s national information and consultation arrangements. This is especially key as Unilever looks to standardise policies and procedures and harmonise some employee benefits. • Using strong relationships to deliver competitive edge: as the internal and external competitive environment intensifies, strong local relationships will provide the foundation on which increasingly braver conversations can take place. More than ever, the Gloucester site cannot afford to be too internally focused. All employees need to be focused on making the site competitive and everyone’s energy focused on finding creative ways to put the site ahead, for example, some current discussions around making the Gloucester site more flexible in the future. First published March 2007. Department of Trade and Industry. www.dti.gov.uk © Crown Copyright. DTI/03/07/NP. URN 07/754