Information and consultation regulations

The Information and Consultation of Employees Regulations come into force in less than five weeks time - on 6 April 2005 - for all organisations with 150 or more employees.

Smaller organisations have longer to prepare for the rules - April 2007 for those over 100 staff and a year later for employers with 50 or more workers.

The aim of the regulations is to ensure that employees have the right to be informed and consulted about issues affecting their employment and the organisation they work for - including issues such as employment prospects and major changes in work organisation.

In effect, the rules require both public and private sector employers to have formal procedures in place to deal with such matters and which have been agreed by the workforce.

The Chartered Institute of Personnel and Development (CIPD) claimed that employers embracing the principle behind the new regulations would "reap real rewards" in terms of employee motivation and commitment.

However, it added that organisations which ignored the rules risked being "forced to adopt rigid arrangements" that would not suit their business.

'Opinions matter'

The warning came as the CIPD published a comprehensive guide to the regulations, including a number of case studies highlighting various ways in which organisations had already put useful procedures in place.

Ben Willmott, CIPD adviser on employee relations, said: "These new regulations are now just around the corner. For organisations that embrace them willingly, they could improve employee motivation and business performance.

"But employers that sit back and wait to be challenged risk losing the goodwill of their employees and having arrangements that do not fit with their business needs imposed upon them by the new legislation.

He added: "Employees who are informed and consulted about matters that affect their employment experience are more likely to feel that they and their opinions matter and that they have a stake in the organisation they work for.

"A substantial body of research shows that in workplaces where this 'employee voice' exists workers are likely to be more motivated and committed to their employer. This employee voice can be provided either collectively through employee representatives sitting in staff associations or information and consultation forums or directly between managers and employees.

"Our practical guide to the regulations highlights examples of a range of companies that have established or are establishing arrangements to inform and consult with employees. Their experiences show how the regulations can bring positive benefits to the workplace."

Pre-existing arrangements

The CIPD said that the regulations had been drafted to allow employers "significant flexibility" to establish or maintain information and consultation methods.

But what the rules do make clear is that any information and consultation arrangements must cover all employees, including management - up to, but not including, company director level - and that they must have been formally approved by the workforce.

Those organisations that have pre-existing information and consultation arrangements meeting these requirements, would only have to consider making changes if they received a request supported by 40% of employees to negotiate new arrangements.

Organisations with no preexisting information and consultation agreements will be forced to negotiate an agreed method of informing and consulting if 10% of employees make a request for them to do so.

If a negotiated agreement cannot be reached employers will be forced to adopt the regulations' standard provisions for informing or consulting with employees.

Penalties may be imposed on an employer if the Central Arbitration Committee (CAC) judges that an employer has breached the terms of a negotiated agreement, has failed to comply with one or more of the standard provisions, or failed to arrange for the election of information and consultation representatives.

The maximum amount of any penalty imposed on an employer by the Employment Appeal Tribunal is £75,000.

Options to consider

In effect, the regulations mean that an employer has three options to consider, according to the CIPD:

1. Ensure there is in place a formally approved pre-existing agreement for informing and consulting staff before the relevant implementation deadline - April 6 2005, 2007, 2008 depending on the size of the organisation.

2. Take the initiative and negotiate new information and consultation arrangements.

3. Do nothing and wait for a valid request from 10 per cent of the workforce to negotiate new arrangements and risk having the regulations' standard provisions for informing and consulting employees imposed on them.

Consultation is defined in the regulations as 'the exchange of views and establishment of a dialogue' between the employer and employees or information and consultation representatives.

Effective consultation occurs when employees and their representatives are given detailed, clear and good quality information with enough time to allow them to respond to management proposals before decisions are made.

The regulations state that the information provided must be given at such time, in such fashion and with such content to enable the information and consultation representatives to 'where necessary prepare for consultation'.

Acas recently launched a free web-based training package to help employers, employees and employee representatives to reach agreements under the regulations. The e-learning package includes good practice advice, details of the new legislation, an online 'how to do it' learning course and a "trainers' toolkit" for HR professionals to use within their own organisations.

The package is available via the training section of the Acas website - see link above/right. Acas has also produced a downloadable 'good practice' guide.

In addition, the Department of Trade and Industry (DTI) recently published online guidance concerning the regulations.