Employers' responses to employee consultation Regulations examined

Research published in late 2005 suggests that UK employers are responding more actively to the introduction of the Information and Consultation of Employees Regulations than previously thought.

The Information and Consultation of Employees (ICE) Regulations 2004 took effect in April 2005 in respect of undertakings with 150 or more employees (UK0502103N). The Regulations seek to implement the requirements of the 2002 EU Directive (2002/14/EC) on informing and consulting employees (EU0204207F). To date there has been little systematic evidence on how employers, employees and trade unions have been responding to the new legislation, and on what patterns of implementation are emerging. However, two recent pieces of research suggest that the new legislation is proving not to be the 'damp squib' that some commentators have predicted.

IRS survey

In October 2005, IRS Employment Review published the results of a questionnaire survey completed by 160 organisations, over three-quarters of which were private sector firms. The survey suggested that the new legal framework was 'prompting an increase in the extent to which employees are informed and consulted at work', and that 'an increasing number of employers have chosen to go down the route of setting up some form of [representative] consultation mechanism such as a works council or staff forum'.

While the most popular means used by employers for informing and consulting their employees tended to be direct mechanisms such as departmental or site briefings (85%) and email updates (84%), over two-thirds (68%) of respondents reported having permanent consultative forums - a considerable increase on the 49% that reported having them in a similar IRS survey one year previously. Just over half the respondents (51%) informed and consulted via trade unions.

Of the employers that were able to say when their consultative forum had been established, as many as one-fifth said it had been set up in 2005, and a further 22% had set them up in 2003 or 2004. In total, more than half of the consultative bodies had been set up since 2001.

Nearly half of the respondents (49%) said that they had made changes to their information and consultation arrangements in the past two years. Of these 65% said that the changes had been made in order to comply with the ICE Regulations or made 'partially' for reasons of compliance, while 32% said they were not. A further 16% of respondents said that changes were planned in the next two years. In the great majority of cases these changes were being planned to comply with the Regulations or partially for that reason.

However, fewer than half the employers in the survey (46%) said that their information and consultation arrangements were set out in writing. Under one-third of the employers had sought workforce approval of their information and consultation arrangements - in almost all cases during the past year, suggesting that 'the ICE Regulations have proved a strong motivation for employers to check that employees are satisfied with current arrangements'. A further 14% said they planned to do so in the future. Methods of approval included:

• approval by the existing consultation body (cited by 22 organisations);

• a staff survey (16 organisations);

• the agreement of trade union representatives (12 organisations); and

• an employee ballot (nine organisations).

Only two employers in the survey said that they had been asked by employees for new information and consultation arrangements, and in neither case had the request been via the statutory procedures established by the ICE Regulations (whereby 10% of the workforce can initiate negotiations for new information and consultation arrangements). Very few employers (only 3%) expected a request from employees for new information and consultation arrangements in the future.

Warwick survey

In December 2005, Warwick Business School's Industrial Relations Research Unit (IRRU) published the findings of a small-scale survey for the West Midlands Employment Relations Forum. This asked about member organisations’ arrangements for informing and consulting their employees and their responses to the ICE Regulations.

Of the 34 respondents, 41% reported they had an information and consultation body or employee forum, and 50% informed and consulted via recognised trade unions, but the most popular practice was information and consultation directly with employees, reported by 59% of organisations. A majority (62%) reported using two or three of these methods. Some 15% said that they had no current arrangements.

Information and consultation via recognised unions is the most widespread practice among unionised organisations, reported by over three-quarters of relevant respondents (77%). Direct information and consultation takes place in 64% of unionised organisations and 46% have information and consultation bodies. Only one unionised organisation said it had no current arrangements.

Amongst the non-union organisations, direct information and consultation is the most popular practice (50%), while one-third (33%) have information and consultation bodies. Thus, non-union organisations in the survey are less likely than unionised organisations to inform and consult directly and less likely to have information and consultation bodies. They are also more likely to have no information and consultation arrangements at all.

Of the respondents that had information and consultation arrangements, 48% have arrangements based on written agreements with trade union representatives and 21% on written agreements with non-trade union representatives. In only 7% of cases were the arrangements reported to have been approved by employees.

Arguably the most interesting findings concern the impact of the ICE Regulations on organisations’ information and consultation arrangements. Active responses to the Regulations were reported by almost two-thirds of relevant respondents:

• 37% said that they had already modified their arrangements in response to the Regulations;

• 20% intended to review their current arrangements in the near future; and

• a further 7% intended to introduce new information and consultation arrangements.

The 37% of the respondents that said they were not planning to take any action in response to the Regulations was made up of eight organisations that already had one or more types of information and consultation arrangement and three which had nothing in place.

Unionised organisations are proportionately more likely than non-union organisations to have already modified their information and consultation arrangements (38% compared to 33%), and are more likely to intend to introduce new arrangements (10% compared to 0%). Non-union organisations are more likely to say they are not planning any action in response to the Regulations (44% to 33%). Respondents without any current arrangements but that are not planning to take any action are also more likely to be non-union organisations. Overall, therefore, these figures suggest an association between union recognition and active compliance strategies on the part of employers.

Finally, all but one of the respondents said that they do not expect their employees to request negotiations under the Regulations on the establishment of new information and consultation arrangements.

Commentary

A key question is the extent to which the ICE Regulations will result in 'legislatively-prompted voluntarism', with the prospect of recourse to statutory procedures driving the voluntary introduction or reform of organisation-specific information and consultation arrangements. The proportions of employers in both surveys that are actively responding to Regulations by reviewing their information and consultation practices and putting new or modified arrangements in place are higher than might have been expected, given the widely held view that relatively little seems to have been happening on the ground. At the same time, both surveys found that very few employers expected to receive formal requests under the Regulations for the establishment of new information and consultation arrangements. This suggests that, particularly in undertakings with no union presence, the 10% threshold of active employee support required under the Regulations to trigger negotiations represents a high hurdle (except perhaps where significant in-company events, such as redundancies, provide the catalyst), and that the pressure on employers to respond to the Regulations may not necessarily be very strong in practice. (Mark Hall, IRRU)