Government issues discussion paper on employee involvement

In July 2002, as a first step towards the UK implementation of the EU employee information and consultation Directive, the government published a discussion paper on employee involvement intended to highlight some of the main issues raised by the Directive. The government will be consulting at a later stage on specific legislative proposals.

On 11 July 2002, the UK Department of Trade and Industry (DTI) published a discussion paper entitled High performance workplaces: the role of employee involvement in a modern economy. This is the first stage of a two-stage consultation procedure on framing UK legislation to implement the EU Directive (2002/14/EC) establishing a general framework for informing and consulting employees in the European Community (EU0204207F). Interested parties have been asked to submit comments by 11 December 2002. The government has said it will hold further consultations later on the detail of the UK’s implementing legislation.

Under the Directive, all undertakings with at least 50 employees (or establishments with at least 20 employees) must inform and consult employee representatives about business developments, employment trends and changes in work organisation. EU Member States have until 23 March 2005 to comply with its requirements.

In the discussion document, the government confirms that, following the adoption of the Directive, it will be introducing legislation to establish a right to new minimum standards for information and consultation. It states that 'the basic case for these new standards is fair treatment for people at work' but that the government also wants to use the implementation of the Directive to 'contribute to its promotion of high performance workplaces, partnership and employee involvement'.

The discussion paper gives few real pointers to the government’s likely approach to implementing the Directive. It does, however, say that:

  • 'The legislation will not cut across existing good practice or impose rigid arrangements across all businesses. It will not be imposed on workforces, but will give those who want it the right to information and consultation' (p.5);
  • 'The government wants to see business and employees agreeing arrangements that best suit their needs. Where agreement is not reached, there will be a statutory minimum requirement for formal information and consultation procedures consistent with the arrangements laid out in the Directive' (p.11); and
  • 'The works council model seen in a number of European countries may be suitable for some UK companies, but it may be inappropriate for others, especially for smaller and medium-sized firms ... A single static model - a 'one size fits all' approach - will not do. Instead we should build on UK experience and create room for the wide diversity of practices that have built up over the years, combining both representative and direct forms of participation' (p.28).

On handling redundancies, the discussion paper says that the Directive could help promote better practice, and emphasises that the UK Listings Rules do not prevent companies quoted on the stock exchange from consulting with employee representatives, in confidence, about proposed redundancies before they are publicly announced.

The questions and issues on which the DTI has invited views are as follows:

  • what do you see as important contributors to high performance workplaces?
  • what do you think employees want from their place of work?
  • what benefits do you see in employees being informed and consulted about their company or organisation?
  • what information and consultation mechanisms are used in your company? What works well and why? What are the main obstacles to developing a meaningful dialogue?
  • what issues do you think employees should be informed and consulted about? How and when do you think this should happen?
  • do you have any experience of information and consultation arrangements overseas that you think might be relevant to the UK?
  • what should be the key features of domestic legislation to implement the information and consultation Directive?
  • should the government try to promote information and consultation in small and medium-sized enterprises not covered by the information and consultation Directive (those with less than 50 employees)? If so, how should it do so?

On the same day, the government published terms of reference for a review of the Employment Relations Act 1999 (UK9912145F) and a discussion paper on extending employment rights to categories of worker other than 'employees'.

The Trades Union Congress (TUC) welcomed the three initiatives, stating: 'Today has set in train a process that is bound to lead to advances in rights at work. No-one wants to see total uniformity across the EU, but today provides another staging post in our long campaign to give people at work in the UK the same minimum decent standards as in the rest of Europe.'

The Confederation of British Industry (CBI) argued that 'there is no need for a radical shake-up of UK employment law with labour markets working well and few industrial disputes'. On the implementation of the Directive, the CBI added: 'The government has recognised that employers need the freedom to inform and consult staff in a variety of ways. Now this Directive is to become law, it is vital employers get as much flexibility as possible.'

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