UK: The Introduction of UK Work Councils - Are you Prepared?

Last Updated: 21 October 2005
Article by Noel Deans

From 6 April 2005 all employers with at least 150 employees in the United Kingdom could be asked to set up employee information and consultation arrangements (or Works Councils) to comply with the Information and Consultation of Employees Regulations. There are good reasons why all affected employers should start preparing now.

How is the procedure triggered?

At first, the Regulations will only apply to organisations with at least 150 employees working in the United Kingdom. The Regulations will apply where there are at least 100 employees from 6 April 2007 and where there are at least 50 employees from 6 April 2008.

From 6 April 2005 either the employer or employees can "trigger" a procedure which should eventually lead to the establishment of information and consultation arrangements. Once the arrangements are established, employers will need to inform and consult with employee representatives over agreed subjects.

Arrangements can be set up before April 2005 to pre-empt the formal procedures set out in the Regulations. However, if the formal procedures are triggered and agreement is not reached, standard fall back arrangements will apply and it is against this backdrop that negotiations are likely to take place.

The introduction of these Regulations, are unlikely to be welcomed by many employers, though many are likely to be practical and, therefore, decide to make the best of things. This might be taking a positive approach and being seen to be a "good" employer. Effective planning and implementation are likely to take months rather than weeks and there will be advantages to making sure the arrangements are in place before April 2005. Set out below are some of the issues which will need to be considered by employers to whom the I&C Regulations apply.

Who do the regulations apply to?

As mentioned earlier, the I&C Regulations will apply to any employer which employs at least 150 employees in the United Kingdom. Employers will have to take account of all UK employees when trying to work out whether the 150 person threshold has been reached and this will also include part-time employees. An employer may incur a penalty of Ł75,000 where it fails to comply with its obligations under the Regulations.

Pre-existing arrangements

It is possible that some pre-existing agreements could qualify as an appropriate I&C arrangement. These would include a collective agreement concluded with a recognised trade union before the 6 April 2005 or an existing staff consultation body. Many employees already have collective staff councils and the employer will want to examine these carefully to see whether any changes would be necessary to comply with the new Regulations.

Will one arrangement fit all?

It is now clear that as long as all of the employees are covered by a suitable arrangement, there is no need for all of them to be covered by the same arrangement. So, it might be more appropriate, for example, to set up I&C bodies at a divisional level. However, if it is more convenient, an employer could have a single I&C arrangement to cover more than one group company. A significant factor will be who will negotiate on behalf of employees.

What will the employers and employees have to negotiate about?

One question that most employers will be concerned about is whether the I&C body will have the power to block employers’ decisions. The I&C Regulations provide for "negotiation with a view to reaching agreement". If agreement is not actually reached, then the employer may be able to make its own decisions. The I&C Body may, however, be able to delay the implementation process. The topics to be discussed will not be prescribed by the Regulations as long as agreement is reached. However, if employee representatives are to agree to I&C arrangements which provide for less than is required by the standard fall-back provisions they are likely to require an incentive. The fall-back arrangements provide for information and consultation on the following topics:

  • To provide information on the recent and probably development of the undertaking and economic situation;
  • To provide information and consult on the structure situation and probable development of employment, especially if there is an anticipated threat to employment and measures which are intended; and
  • To provide information and to consult with a view to reaching agreement on developments likely to lead to substantial changes in work organisation or contractual arrangements.

Limiting risk

It is important to note that if the employer is happy with the fall-back arrangements (or if the employer thinks it will not be able to do much better through negotiation) this will make the process simpler. The employer may, therefore, be happy to wait until employees trigger the process. The question which is worth asking is whether the procedure is likely to be triggered by the employees at all. If not, the employer may prefer to do nothing. However, there can be no certainty in this regard and most employers would be well advised to prepare, even if they think trigger is unlikely. A written request from at least 10% of employees will be enough to trigger an "endorsement ballot".

The next step

All affected employers would be well advised to start preparing thoroughly now as they are more likely to achieve their goals if they think hard about their own requirements whilst there is still time. Some of things that employers will need to consider are set out above, but the real issues for their particular business are only likely to be flushed out properly when managers start to think about the precise form and scope of their ideal I&C arrangements. Once this has been done, managers will be able to prioritise their "wish list", to identify items which they can afford to give away, and, most importantly, try to identify arrangements which both parties would be happy with and which will work for the business.

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.

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