First fine imposed on defaulting company under consultation regulations

In July 2007, the Employment Appeal Tribunal imposed a penalty of GBP 55,000 (approximately €81,000) on the publishing company Macmillan for failing to comply with the UK’s Information and Consultation of Employees Regulations 2004. This is the first time that a penalty notice has been issued under the regulations, which came into effect in early April 2005.

On 24 July 2007, the Employment Appeal Tribunal (EAT) imposed a fine of GBP 55,000 (about €81,000 as at 21 August 2007) on Macmillan Publishers Ltd for failing to comply with their obligations under the UK’s Information and Consultation of Employees (ICE) Regulations 2004 (UK0502103N). Macmillan is thus the first company to receive a penalty notice under the new regulations, which came into effect on 6 April 2005.

Background to case

The move follows an earlier ruling by the Central Arbitration Committee (CAC) upholding a complaint from the trade union Amicus – now part of Unite. Macmillan failed to initiate negotiations over information and consultation arrangements in response to an employee request under the regulations. The regulations’ standard information and consultation provisions therefore became applicable, but the company failed to hold a ballot for the election of employee representatives as required. The CAC ordered the company to do so (UK0706069I).

Tribunal ruling

As provided for by the regulations, the trade union also applied to the EAT for a penalty to be imposed on Macmillan. The regulations provide for a fine of up to GBP 75,000 (about €110,000), depending on the gravity of the breach of regulations.

In this case, the EAT stated that, although the company’s actions did not constitute the most serious breach of the regulations that could be envisaged, they were nonetheless ‘a very grave breach affecting many employees’ and fixed the penalty at GBP 55,000 (€81,000).

The EAT commented:

Employers must recognise that [the regulations conferred] important rights on workers. The provisions must be complied with. We think it appropriate, in fixing this penalty, to stipulate a sum which, within the limits imposed by the legislation, will deter others from what can only be described as the wholly cavalier attitude to their obligations that has been demonstrated by this company.

Trade union reaction

Unite’s Assistant General Secretary, Tony Burke, declared: ‘This is a legal first for Unite. We are very happy to have won this case.’ However, he questioned whether ‘the level of the fine will act as a sufficient deterrent for a global company of this size in the future’.

Mr Burke added: ‘We hope that the company will now open urgent talks with us as, until this issue is resolved, they will continue to be in breach of the regulations they have been fined [under]. These regulations are not going away and neither are we.’

Company response

Macmillan announced in a statement:

Whilst we accept that we have not complied with the original CAC ruling, it remains a fact that we have had well-established information and consultation mechanisms in place for over 30 years. We find it hard to believe that the legislation was intended to be used against a company, such as ourselves, that has consulted with its workforce for many years.

According to a press article by the printing trade journal PrintWeek, the company explained that it was in the process of consulting with ‘interested parties in order to establish a national information and consultation body for the Macmillan group in the UK in addition to our joint consultative committee structure’.


The EAT ruling follows a series of complaints by the trade union to the CAC under the ICE Regulations (UK0603039I). Macmillan admitted that it was in breach of the legislation and was not represented at the hearing. In mitigation, the company made a number of points to the EAT in writing, including that they had thought it was sufficient to adapt their existing mechanisms to the new legislation, and that they were now actively seeking to carry out their legal obligations. However, the EAT commented: ‘It is difficult not to form the impression that [the company] is opposed to these regulations and is seeking to delay their implementation for as long as it reasonably can.’

The penalty imposed on Macmillan falls short of the GBP 75,000 maximum, which some trade unions and legal experts had already criticised as being too low to constitute an effective sanction, especially in the case of large companies with substantial financial resources. However, if necessary, the enforcement of a CAC order may be pursued through the courts.

Mark Hall, IRRU, University of Warwick

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