Information and consultation case highlights corporate complexity

During 2012, four complaints were made in the UK under rules brought in to comply with the 2002 EU Directive on informing and consulting with employees. The regulations give workers rights to information and consultation on a range of issues. Three of the complaints made in 2012 led to formal decisions from the Central Arbitration Committee and one was withdrawn. The cases highlight important aspects of the legal framework, particularly its application in complex corporate groups.

Background

A general framework for informing and consulting employees was introduced by the EU Directive 2002/14/EC. The regulations were transposed into UK law by the Information and Consultation of Employees (ICE) Regulations 2004 (UK0502103N). The regulations’ collective provisions are enforceable via complaints to the Central Arbitration Committee (CAC).

The legislation is intended to give employees the right to insist on being kept informed and consulted by their employers on a range of key business, employment and restructuring issues. Employees should be able to insist on negotiations with their employer to agree new information and consultation arrangements. If the negotiations do not produce an agreement, statutory information and consultation arrangements will become applicable by default.

Few complaints

Relatively few complaints have been made under the regulations (UK1202029I). Nevertheless, some cases have addressed key aspects of the legislative framework and resulted in CAC decisions that have significant implications for both employers and unions.

In 2012, the cases dealt with by the CAC under the regulations followed a similar pattern. Four applications were received during the year – fewer than the previous annual average of six cases per year. Three resulted in formal CAC decisions. The fourth – the latest in a series of cases concerning Bournemouth University – was withdrawn by the applicant before reaching this stage.

Coombs and Holder/GE Aviation Systems Ltd

Arguably the most significant of the cases in 2012 was that involving GE Aviation Systems (IC/43/2012). This concerned the impact of the regulations in complex corporate groups and clarified the effect of the regulations’ application to ‘undertakings’. The applicants, representatives of the trade union Unite, submitted a complaint to the CAC under regulation 19(2). The union claimed the employer’s arrangements for a ballot to elect information and consultation representatives were defective because they did not provide for representatives from three GE sites. Representatives from these sites were excluded by the company on the grounds that they belonged to separate legal entities.

The Unite representatives contended that centralised managerial and corporate decision-making procedures within GE’s UK aviation division meant that the division as a whole should be considered as a single undertaking for the purposes of the regulations. However, GE Aviation Systems successfully argued that, in the absence of a negotiated agreement to cover the four separate UK companies in the aviation division by a single information and consultation body, the regulations’ standard information and consultation provisions applied separately to each company because they were separately incorporated legal entities.

The CAC panel rejected the union’s complaint on the basis that an undertaking must be capable of being an employer – in other words, it must be a legal entity. The panel admitted it did not reach its conclusion ‘with any enthusiasm’. The CAC pointed out that the business and industrial relations organisation of corporate groups often ‘does not map very well onto [their] legal structure’.

Hayward/SITA UK

In the second case (IC/44/2012), a Unite official submitted a complaint under regulation 10(1) against recycling company SITA. The union said SITA was not entitled to hold a ballot to establish whether employees endorsed a request for the establishment of information and consultation arrangements.

It is open to an employer to hold a ballot where an employee request is made by at least 10% but less than 40% of those working in the undertaking, and a ‘pre-existing agreement’ is already in place. In this case, the union argued that the existing SITA UK Employee Consultation Forum did not meet the regulations’ criteria for pre-existing agreements.

It was also the case that SITA had failed in its duty under the regulations to inform its employees within one month of the employee request that it intended to hold a ballot. This led the CAC panel to decide that the company was obliged to initiate negotiations in response to the employee request and not proceed with the ballot.

The CAC panel did not give a ruling on the issue of the employee consultation forum. It said a ruling wasn’t necessary because the same outcome would have resulted from a finding that the information and consultation arrangements already in existence did not meet the criteria for a valid pre-existing agreement under the regulations.

Demming/Coin Street Community Builders

The third case (IC/41/2012) concerned a complaint against Coin Street Community Builders. Employee Nigel Demming said the building company had failed to hold elections for information and consultation representatives in circumstances where the regulations’ standard provisions applied (regulation 19(4)). He said he had been denied access to information available to other potential candidates in the elections.

The panel was left to review the complex and contested sequence of events which had given rise to the case. In the end, the CAC panel rejected the applicant’s argument that the employer had failed to initiate negotiations over an information and consultation agreement early enough to satisfy the requirements of the regulations. It ruled that the standard information and consultation provisions did not therefore apply.

Mark Hall, IRRU, Warwick Business School

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Pridať nový komentár