Time to put your cards on the table

first_imgTime to put your cards on the tableOn 22 Jul 2003 in Personnel Today The Information and Consultation Directive will take time and resources toimplement, which is why HR must ensure it is not left to the last minute.Roisin Woolnough reportsEmployers need to think long and hard about how they communicate businessnews and changes to staff, following the Government’s announcement on theInformation and Consultation Directive. While the legislation itself does notrequire companies to have an employee consultative body, it does stipulate thatif just 10 per cent of the workforce demand it, then the company must provideit. What form that consultative body takes is to a certain extent left up to theemployer. The framework has taken into account the varied nature of existingarrangements between employers and employees, some of which are highlysuccessful, and the DTI has avoided a one-size fits all approach. One thing the DTI, employer and employee industry bodies are all agreed uponis that companies should at the very least establish if they comply with thedirective and what the business implications are. Any organisations that fallfoul of the directive could face a fine of up to £75,000. “HR people are going to want to drive this initiative, rather thanrespond to demands from employees,” says Ken Allison, Head of HRConsulting at Bond Pearce. “There are good business reasons for doing itahead of time, so that you have the machinery in place and representatives canhandle their roles well.” The EU-legislation takes effect for companies with 150 employees or more inMarch 2005, in 2007 for those with 100 or more employees and in 2008 for thosewith 50 or more employees. Information and consultation means just that and nothing more. “People tend to think consultation is the same as negotiation, but itis not,” says Patrick Burns, director of advocacy for The Work Foundationconsultancy and think-tank. “Consultation still very much leaves decisionmaking in managers’ hands. The directive says a company must be prepared tolisten to employees’ views, state its own views and then make a decision,”he adds. The legislation came about because of EU concerns about the number ofcompanies making public announcements about fundamental changes to their businesses– such as restructuring and mass redundancies – with no prior warning to staff.Employees have to be informed and consulted on management decisions thataffect their future, and the consultation has to be meaningful. It also needsto be done right down to departmental level and at the time the decision-makingprocess is taking place – not when plans have already been finalised. “If the board signs this off, saying ‘Yes we must consult’, but thenthey go through the motions at national level, then there is a problem,”says Burns. “All the personnel we have spoken to said consultations haveto take place while there are still options and the decision can still beaffected.” If companies only pay lip service to the notion of consultation, Burns believesemployees and unions could bring about cases of non-compliance. “If I had to predict a potential flashpoint,” says Burns, “itwould be confidentiality. Accidental exposure is a problem, but not if peoplelearn from good management.” A major concern expressed by employers is that employee reps will leaksensitive corporate information, but Burns sees no reason why this shouldhappen if they understand what is expected of them. He says representativesneed to be given good training to ensure issues such as confidentiality are notbreached. Senior and middle management also need to understand just what theprocess entails, what information needs to be disseminated and when it shouldhappen. “It is very important to work out if both sides feel confident thatthey have the skills to deal with this,” says Burns. “Clarity is veryimportant as accidents of confidentiality often happen because protocols andprocedures are not clear enough.” It is up to HR to set the guidelines, audit the systems already in place,provide the framework, organise elections and monitor progress. That wholeprocess takes time and resources, which is why it is important that it is notleft until the very last minute. “It’s very hard to see how an organisation will get something set upthat is credible, functioning and compliant in under six months,” saysBurns. “You need to find out how well your system works and match it torequirements and have effective dialogue with employee representatives and atboard level.” Global companies also need to bear in mind how their EU counterpartsinteract with employees. “There are issues around links between UK arrangements and Europeanarrangements,” says Allison. “The works council in the UK would haveto nominate a rep to the EU council, which might be a lot more trade-uniondominated.” This could be tricky for employers and it’s up to HR to negotiate itsuccessfully. Whatever happens, Allison says that for employee councils to beeffective, companies need to set them up and treat them in an appropriatemanner. “Make sure it’s not imposed from the top – implement it in aconsultative way,” he says. weblinks www.cbi.org.uk www.dti.gov.uk  www.tuc.org.uk  www.theworkfoundation.co.uk  Philippa James, HR Officer at AlfalvalThe sales and services arm of Swedish process engineering manufacturerAlfalaval has had an employee representative body since mid-1999. “We started it because we had a new managing director who was very muchinto being open and communicating with employees,” says HR officerPhilippa James. Called the Employee Consultative Forum, it meets three times a year withfive representatives from different divisions of the business. Representativesfrom the UK’s 200-strong workforce are elected for a two-year period. “Employees can ask most questions they want to, particularly thingssuch as whether there are any areas that cause problems and office improvementsin working methods,” says James. The company will not discuss any issues that are deemed strictlyconfidential or anything relating to particular individuals, and the forum doesnot cover minor workplace issues, such as washroom provisions. “That’s forthe facilities people,” says James. Before each meeting, the agenda is set out so that suggestions can be putforward, and James says that employee opinion surveys show the staff feel theforum is working. On the question ‘I’m kept well informed on the company’sprogress’, the opinion surveys show that 50 per cent of employees agreed in2002, compared with 34.2 per cent in 2001. And the staff response to ‘Thecompany does a good job of keeping employees informed about matters affectingus’, showed an increase of 25 per cent from 2001 to 40.4 per cent in 2002. James feels the forum is fairly well aligned with the directive, althoughshe feels the company may need to make the processes a bit more in-depth in thefuture. www.alfalaval.com Information and consultation regulationsWhen will the regulations begin toapply to my company?Organisations which employ more than 150 employees will be liableto act on a staff request to set up a new information and consultation(I&C) body (a works council) from 23 March 2005 onwards. Where the organisations have more than 100 employees, theoperational date is 23 March 2007, and where the undertakings have more than 50employees, the operational date is 23 March 2008. As from those dates, the lawdoes not require employers to do anything. However, if requested by theiremployees, they will from those operational dates be required to commencenegotiations on the setting up of an information and consultation body/workscouncil. How will such a request for aninformation and consultation body/works council be triggered?Employers will be required to set up an I&C body when theyreceive a petition of more than 100 employees from within the undertaking. Thiskickstarts a process whereby the employer has six months in which to negotiatean I&C agreement. If an agreement is not reached, a lead-in period of afurther six months will operate, at the end of which the ‘default model’I&C body will automatically operate. In the next six months, the employer has the opportunity tocontinue to try to reach an agreement on a voluntary I&C body and/or toarrange the transition arrangements for the operation of the I&C defaultmodel.What is the position where myorganisation already has an I&C-type body such as a staff consultativeforum? Will this have to be disbanded?Unlike the position for European works councils, having anexisting agreed I&C body is not a complete defence to stop new negotiationsproceeding to set up a works council under the I&C regulations. However,the draft regulations do provide some limited measure of support in thissituation. Existing I&C arrangements can remain in place unless and until aformal petition, from more than 10 per cent of employees, is received. Where the employer wishes to preserve its existing staffconsultative forum, it has the option to call a ballot of all the employees inthe undertaking to vote on whether they want to proceed with the statutoryI&C negotiation process. If less than 40 per cent vote in favour ofprogressing with the negotiation for a new I&C agreement, then the employercan continue with the existing employee consultative forum, and the employeescannot submit a new petition for an I&C negotiation for a period of threeyears. Where the original petition to set the I&C negotiationprocess into motion is signed by at least 40 per cent of the employees in theundertaking, there is no entitlement for an employer to hold a ballot. Theemployer is forced to go ahead with the negotiation for a new I&Cagreement. What does the default modelprovide for?The draft regulations provide for information andconsultation in three areas:– The recent and probable development of the undertaking’sactivities and the economic situation– The current situation, structure and probable development ofemployment within the undertaking and any anticipated measures envisaged whichmay put a threat on employment within the undertaking– Decisions likely to lead to substantial changes in workorganisation or contractual relations, including collective redundancy and TUPEtransfersIn the first two of these, consultation is described as”an exchange of views or establishment for dialogue”. In the third –substantial changes in contractual relations and work organisation –consultation is defined as “with a view to reaching agreement”. Itshould be noted that this ‘higher’ level of consultation comes close to a formof negotiation, and would include subjects such as terms and conditions, hoursof work, methods of work, places of work, use of machinery and equipment atwork, changed methods of working, and so on.  Interestingly, the I&C Regulations referto “decisions likely to lead to substantial changes of work organisationand contractual relations”. In addition, the default model has provisions relating toconfidentiality. Unlike the position for European works councils, the draftregulations (in their current form) limit the employer’s ability to withholdconfidential information to where disclosure of it would, judged objectively,seriously harm or prejudice the undertaking. What is the timeframe for myorganisation to negotiate an I&C agreement before the default modelstructure is applied?There is an initial negotiation period of six months, beginningwith the date when the petition for the start of the negotiation process isreceived by the employer. If an agreement is not reached by the end of thatperiod, the default model will automatically apply, but there is a furthersix-month lead-in period for the employer to make arrangements for this – forexample, employee elections. At any time, the parties can extend the period ofnegotiations for an I&C agreement. Employers must do the following, all within the six-monthperiod:– Carry out an audit of its existing I&C arrangements– Develop a strategy on I&C– Educate and brief senior management– Manage employee expectations– Devise and implement the employee communication programmes onI&C– Develop an I&C agreement with which to begin negotiations– Train line managers on I&C– Arrange for the election of employee representatives tonegotiate the I&C agreement– Actually negotiate the I&C agreementSix months is a very short timescale to do all this, and ithighlights the importance of doing the preparatory work well ahead of the March2005 deadline.Compiled by Fraser Younson,partner, McDermott, Will & EmeryFive key points for hrKen Allison’s five key points that HRneeds to get right:– Have clear and realistic expectations of what the processwill deliver and what it is for, so that employees do not think it is anegotiating body– Display a willingness to discuss substantial issues soemployees find it meaningful– Ensure staff representatives are trained properly andunderstand their roles– Manage the agenda and communications strategy. Everyone needsto know when consultation is going on– Ensure that senior management commitment is visibleThe legalitiesThe legislation comes into effect forcompanies of:– 150 employees or more in March 2005– 100 employees or more in March 2007– 50 employees or more in March 2008Employee requests only have to be acted upon if 10 per cent ofthe workforce are behind the motion. If the employer already has a consultative agreement withemployees, then 40 per cent of the workforce need to endorse the 10 per centrequest for a review to be mandatory. How the directive is implemented is up tothe employer and employees to decide, unless they cannot agree, in which casethere are standard directive provisions.Claire Logan, organisationalchange manager at SafewaySafeway set up what it callsColleague Councils in March this year. It started with four councils and hassince added another. “We have gone for a staged implementation approach andthen we will roll it out across the whole company,” says Claire Logan,organisational change manager at Safeway, which employs 90,000 in its 480stores across the UK. Each council meets once a month, with between seven and 10representatives, and two weeks later, representatives from those councils go toa Total Council Meeting. “Individual council meetings provide the agenda for theTotal Council Meeting,” says Logan. “That ranges from discussionsabout pensions through to piloting a corporate training programme. If there areparticular initiatives we are wanting to work through we talk to them prior togetting board approval.”Logan says there have been teething problems in the informationflow. “The timing of the meetings is a challenge,” she says.”You need to balance how often you meet with having enough time for peopleto get feedback on the outcomes and generate ideas and suggestions. You need toget that right for it to be effective.”Each council member represents between 50-100 people and 47members have been trained so far. The training focuses on the legal issues.There are council sponsors at a senior level and meetings arechaired by an HR facilitator. Logan says acting as a facilitator swallows upsome HR hours, as does typing up the minutes, but that they have also savedtime and resources through trialling the training programme with the reps. www.safeway.co.uk Comments are closed. Previous Article Next Article Related posts:No related photos.last_img read more