Employers and unions submit views on UK consultation law

The closing date for responses to the government's discussion paper on employee involvement and the UK implementation of the EU information and consultation Directive was 11 December 2002. This feature reviews the submissions made by the Confederation of British Industry, the Trades Union Congress and other key organisations.

The UK government’s consultation on implementing the 2002 EU Directive (2002/14/EC) on informing and consulting employees (EU0204207F) began with the publication in July 2002 of a Department of Trade and Industry (DTI) discussion paper, High performance workplaces: the role of employee involvement in a modern economy (UK0208101N). The closing date for responses to the discussion paper was 11 December 2002. The main points of the submissions made by the UK’s main employer and trade union bodies - the Confederation of British Industry (CBI) and the Trades Union Congress (TUC) - and other leading organisations are outlined below.

CBI response

The CBI submission argues that:

• there is no single set of people management practices which can be said to improve productivity - a 'one-size fits all' approach should be avoided;

• employee involvement is one of a number of practices which can contribute to increased productivity but it is direct consultation which is most effective, rather than consultation through employee representatives;

• effective employee involvement mechanisms can only be achieved by ensuring that employers have the flexibility to introduce structures which are appropriate for their firm;

• collective redundancies are an area where effective consultation is particularly important but the government should guard against 'simplistic calls to extend existing obligations'; and

• the government should adopt a 'light touch' in implementing the Directive, preserving as much scope for flexibility and diversity as possible.

The CBI says that it is still considering what specific provisions would best serve to provide such flexibility, but at this stage it recommends that the UK legislation should:

• incorporate a trigger mechanism to ensure that consultation mechanisms are only set up where they have genuine employee support;

• maximise the scope for companies to operate arrangements agreed with employees which differ from the specific requirements of the Directive;

• ensure that employees are represented whether they are trade union members or not, and enable companies to keep information and consultation arrangements separate from collective bargaining mechanisms where appropriate; and

• protect the legitimate interest of companies in keeping certain information confidential.

The CBI stresses that even the 'light touch' approach to implementation it recommends is 'still likely to involve some major changes, particularly for medium-sized firms'. The CBI says that companies will need time to familiarise themselves with the new regulations in order to make sensible decisions regarding how they should be applied in their particular circumstances. It therefore 'urges the government to make full use of the extended lead-in time allowed for smaller enterprises'.

TUC response

The TUC’s submission to the government argues that 'effective information and consultation with workers’ representatives is critical to the delivery of high performance. Evidence from the UK and elsewhere supports the view that it is a mix of direct employee involvement and representative participation that delivers the best results for both employers and workers'. The TUC also sees implementation of the Directive as a 'valuable tool in achieving another government aim - fairness at work through partnership'. Effective information and consultation arrangements would also be a vehicle for complying with existing workforce consultation requirements, eg on redundancies and transfers, and for promoting the establishment of workplace dispute procedures which would help reduce the number of claims made to employment tribunals.

On the specifics of the UK’s approach to implementing the Directive, the TUC believes that 'allowing employers and unions/employees to determine the practical arrangements for information and consultation via negotiated agreements will provide the best basis for safeguarding existing systems where they are working well, as well as enabling arrangements to be tailored to the particular circumstances of the undertaking.' However, the TUC contends that agreements which provide solely for direct employee involvement cannot be regarded as an acceptable alternative to the Directive’s requirements.

The TUC also proposes that:

• detailed guidance on what is meant by consultation and the subjects on which it should take place should be set out in a code of practice;

• information and consultation should be via union representatives where unions are recognised and otherwise by independent representatives elected by employees;

• information and consultation mechanisms should be permanent, not ad hoc;

• in the absence of agreed information and consultation arrangements, employees should be able to seek the establishment of the necessary mechanisms via some form of trigger mechanism; and

• there should be provision for a statutory fallback framework (the TUC suggests this should take the form of an undertaking-wide joint information and consultation committee) enforceable on employers who are unwilling to introduce the necessary information and consultation arrangements by agreement.

Views of other organisations

Among other organisations responding to the discussion paper, the Chartered Institute of Personnel and Development (CIPD), the professional body for human resource managers, also calls for a 'light touch' regulation to 'maximise flexibility and allow organisations to develop arrangements that are best suited to their circumstances'. The CIPD recommends an 'opt-in approach', requiring employers to set up information and consultation procedures only where requested by a proportion of the workforce. It is suggested that 'this might be [done] through a petition from individual employees or elected employee representatives'.

The Engineering Employers’ Federation (EEF) wants to see 'simple and flexible' regulations which employers can support, with the emphasis on voluntary agreements. The EEF argues that information and consultation 'should only be legally required where the majority of employees want them', and that 'the statutory system should be based on democratic principles of fair and open elections for employee representatives.'

The submission of the Involvement and Participation Association (IPA), whose membership includes both employers and trade unions, argues that UK legislation on information and consultation should be guided by best practice, and quotes examples from a range of organisations of arrangements said to work effectively. The IPA recommends a 'dual approach' to implementing the Directive - regulations providing 'general guidelines rather than prescriptive detail', backed up by a code of practice giving examples of good practice. The IPA believes the regulations should emphasise three main points:

• regular, structured dialogue is essential for achieving real benefits. It is vital for information and consultation mechanisms to be permanent rather than ad hoc;

• employee representatives, union or otherwise, must be genuinely representative of their constituencies. 'It is not appropriate for managers to appoint employee representatives'; and

• information and consultation arrangements should be the subject of a written agreement between management and employee representatives.

The IPA does not favour detailed statutory fallback arrangements: 'the danger is that too many organisations will simply apply them for the sake of complying without generating any ownership or commitment.' The IPA’s preference is for 'conciliation-based intervention in the first instance with good practice in the sector being the relevant benchmark to guide decisions'.

Commentary

EU Member States have until 23 March 2005 to comply with the requirements of the information and consultation Directive (although the UK will be allowed to phase in the coverage of its implementing legislation in three stages, applying it to undertakings with at least 150 employees from March 2005, undertakings at least 100 employees from March 2007 and undertakings with at least 50 employees from March 2008).

The DTI discussion paper is the first stage of a two-stage consultation process. The government will be taking account of responses to the discussion paper, and views expressed in a series of round-table meetings on the issue involving interested parties, when it prepares a consultation document and draft legislation to implement the Directive. These are expected to be published later in 2003.

While the government must ensure that its new legislation complies with the requirements of the Directive, the latter provides only a 'general framework' and ministers will have to make some key policy choices in determining the specific approach the UK legislation adopts - in the face of competitive lobbying from the main interest groups.

Inevitably, employers’ groups tend towards a 'minimalist' approach to implementation, whereas unions want to see robust legislation that is sufficiently detailed to ensure effective implementation. While the submissions of the CBI and TUC highlight the two organisations’ differing stances on the Directive, they also suggest there is some overlap of approach in certain areas, eg an emphasis on voluntary agreements and support for some sort of trigger mechanism. In view of the Directive’s radical implications for UK law and practice, there is a strong argument that the government should go beyond the traditional pre-legislation consultation process and seek the more active involvement of the UK 'social partners' in developing the UK’s implementation strategy. This could be done either by asking the CBI and TUC to engage in joint discussions on the key elements of the necessary legal framework, as happened in 1997 in respect of the trade union recognition procedure (UK9801194F), or by establishing a more broadly-based commission or taskforce on the issue. (Mark Hall, IRRU)