Ireland: Workplace Consultation: A New Era

A new legal framework of compulsory collective workplace representation will be created in Ireland when the Information and Consultation Directive comes into force. The deadline for the transposition of this Directive was 23^rd March 2005 but to date it has not yet been implemented in Ireland and a draft of the implementing legislation in Ireland is expected in early course.

All employees, in qualifying organisations, will have a right to be informed and in certain cases consulted, through their elected representatives, on the company’s activities and economic situation; employment within the company and decisions likely to lead to substantial changes in work organisation or in contractual relations.

Examples of the above therefore could include the launch of new products or services, mergers or takeovers, reorganisations, changes in senior management or the undertaking’s financial situation, changes in overtime or working hours or retirement policies, redundancies, changes in the pension scheme or disciplinary procedures etc.

To achieve the above the employer and the employees will need to negotiate and implement an information and consultation agreement.

It should be noted that the Directive leaves it open for each member state to decide whether the legislation when fully implemented by 2008 will apply either to undertakings having 50 or more employees or establishments having 20 or more employees. "Undertaking" relates to a legal entity such as a company whereas "establishment" is defined in such a way as to include branches or factories or units, which form part of a larger legal entity. It remains to be seen which approach the Irish legislature will adopt. It is likely that the legislation will however be introduced in Ireland on a phased basis between 2005 and 2008 initially applying to undertakings with at least 150 employees or establishments with at least 100 employees.

It has been left to each member state to determine whether the legislation should apply automatically once the thresholds in relation to the number of employees are exceeded or only once a stated number of employees request a consultation agreement.

Consultation is defined in the Directive as an exchange of views and establishment of dialogue between employee representatives and the employer. Therefore, it would not appear to require negotiation. However, it should be noted that the employer is required to consult "with a view to reaching agreement" in some circumstances and therefore, it must be shown that the consultations are genuine in such circumstances.

Employers are permitted to enter into their own local agreements with employees. It is likely that local agreements will need to cover certain key principles and minimum requirements but the employer and employee representatives will be free to negotiate any other terms applicable. The agreements entered into must however apply to the entire workforce and be negotiated and not imposed by an employer. Agreements must be negotiated and concluded within a deadline and they must be in writing, dated and available for inspection. The agreements must contain a clear statement of the subjects and conditions and methods for information and consultation and must be signed by the employer and the employee representatives.

If an agreement is not reached the legislation will provide for a fall-back position.

The Directive provides that there is a duty on the employee representatives to respect the confidential nature of the information provided as asserted by the employer. For the confidentiality of the information to be established it must be expressly provided in confidence and the confidentiality requirement must be justified by the legitimate interest of the employer’s business.

The employer is also not obliged to communicate information or undertake consultation when the nature of that information or consultation is such that according to objective criteria it would seriously harm the functioning of the undertaking or would be prejudicial to it.

Employers with a unionised workforce will now face the dual possibility of dealing with both recognised trade unions and specially elected representatives of their staff.

It is for member states to establish what sanctions and penalties apply in the case of non-compliance but in any event these sanctions must be effective, proportionate and persuasive.

The draft Irish implementing legislation in relation to the above is therefore eagerly awaited so that employers can establish the precise implications of the requirements for their particular companies.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.