Businesses to inform & consult - April 07

From 6 April 2007, the scope of the Information and Consultation of Employees Regulations 2004 will be extended.  The effect of this is that a wider range of businesses will find that staff are entitled to have a say in management decisions when they are first contemplated including, for example, redundancies or changes to the workforce.

The Regulations previously applied to businesses with 150 or more staff.  Since 6 April 2007 they have been extended to businesses with 100 or more staff, and by 2008 they will apply to all organisations with more than 50 employees.

Employees in those businesses will have the right to submit a requisition to their employer for an information and consultation body.  A request must come from 10% of the workforce, and following such a valid request, the employer must enter into negotiations for an agreement.  If agreement cannot be reached within certain timescales, onerous default provisions will apply.  These require businesses to inform and consult employees on:

·         Recent and probable future business developments; 

·         The development of employment within the business and any threats to
    employment (i.e. redundancies or reorganisations);

·         Substantial changes in work organisation or contractual relations (including
    redundancies and transfers).

Alternatively, an employer can set up its own arrangement on a voluntary basis, which can be more flexible in scope.  If this has already been done it is more difficult for employees to make a formal request.

If your business currently has no structure for informing and consulting you should start thinking now about how to create a dialogue with employees before decisions are made.  Otherwise you run the risk of a formal request being made which could result in you being bound by undesirable default arrangements.