FAQ: Information and consultation FAQs
23 FAQs people ask about information and consultation
- Do the information and consultation ('I&C') regulations apply to us?
- We only have 27 employees. Will these regulations apply to us some time in the future?
- We employ people on a seasonal basis, with well over 200 for three months of the year, but for the rest of the year only two or three. Are we caught by the legislation?
- We employ a large number of part-time workers. How do we calculate whether we are affected?
- So the regulations apply to us - what do we have to do?
- We have an existing agreement on informing and consulting employees. Will that be OK?
- Should we initiate negotiations for agreeing a new I&C agreement, even though we already have one?
- Our existing arrangements work well, but they don't cover all employees, and they have never been formally approved. Can we remedy these deficiencies now?
- We don't have any sort of I&C procedure - can we be forced into this whole process by a single trouble-maker?
- An employee has said they will be asking us for data on our employees, for I&C purposes. Do we have to provide it?
- If we get a request for negotiations over an I&C agreement, how long do we have to work out whether the request is valid?
- Should we initiate negotiations for setting up an I&C agreement ourselves?
- Once we have entered into negotiations, how long do we have to reach an agreement?
- What are we negotiating over?
- Are the negotiating representatives and the I&C representatives the same?
- If we refuse to enter into negotiations, or do so but fail to agree, what happens? What are 'standard procedures'?
- Once our agreement is in place, do we have to take any notice of what employees say in consultation?
- Are there matters we can avoid informing or consulting about? What about trade secrets, or takeover negotiations?
- What are the business benefits of having an I&C agreement?
- Can employees ask for changes to a negotiated agreement, once it is made? Will we have to go through this process every three or six months?
- What do we do if the I&C arrangements don't work satisfactorily?
- What happens if we just ignore the whole thing?
- What are the penalties for ignoring requests for action on I&C, and under what circumstances might they be invoked?
1. Do the information and consultation ('I&C') regulations apply to us?
The regulations apply to any British undertaking with more than 50 employees which is 'carrying on an economic activity, whether or not operating for gain'. Limited companies, limited liability partnerships, sole traders, partnerships, friendly societies, mutual associations and charities are all included, if they are employers.
2. We only have 27 employees. Will these regulations apply to us some time in the future?
The government says not. But it is also encouraging all employers, irrespective of size and the nature of their activity, to inform and consult employees in a way suited to their circumstances.
3. We employ people on a seasonal basis, with well over 200 for three months of the year, but for the rest of the year only two or three. Are we caught by the legislation?
To calculate how many employees you have, you need to use the average figure over 12 completed calendar months (or however many months you have been operating, if shorter).
In your case, you employ 200-plus people for 3 months in the year so the calculation is (200 x 3 = 600), plus 3 employees for 9 months (3 x 9 = 27), making 627, to be divided by 12 to reach an average monthly total of just over 52. You therefore fall within the scope of the legislation.
4. We employ a large number of part-time workers. How do we calculate whether we are affected?
For the purposes of working out how many people you employ, you may choose to count anyone contracted to work for 75 hours or fewer a month as half a full-time employee, for the completed months during which they worked. Otherwise, part-time workers are normally counted as full-time employees.
5. So the regulations apply to us - what do we have to do?
No action is required by law.
However, if you have no existing agreement for information and consultation, and 10% or more of your employees (see 11) put in a formal request for an information and consultation ('I&C') agreement, you will have to take steps to introduce such an agreement.
That 10% can be aggregated over a rolling six month period, so even if there are fewer than 10% at the first request, you may find yourself required to take steps in the end.
You might want to consider making a pre-emptive move, and initiating negotiations yourself if you think that might happen (see 7).
If you already have an effective information and consultation process which meets the requirements of the Information and Consultation of Employees Regulations (often abbreviated to ICE) (see 6), your employees may be happy to continue using that process, in which case you need do nothing. However, if 10% or more of your employees request negotiations for new arrangements, you must then either enter negotiations, or hold a ballot of your workforce to find out whether there is enough support for change from other employees. If such support exists, you will have to negotiate a new I&C agreement. If you think that may happen, there can be advantages in pre-empting the situation by initiating negotiations yourself.
Always take advice if you are required, or intend, to establish (or amend) an I&C agreement. You do not want to end up with something which employees can and will challenge because it flouts the spirit or even the letter of the law on the one hand, or something which ties you up in knots on the other.
6. We have an existing agreement on informing and consulting employees. Will that be OK?
It may be, provided that it fulfils certain basic legal requirements, and your employees are happy with it.
The basic requirements are that the agreement must:
- cover all employees, though there may be different arrangements for different parts of the undertaking
- establish the ways in which you as employer are going to inform employees, and how their views will be fed back to you
- be in writing, and dated
- be signed by you, or on your behalf
- be explicitly approved by your employees - either directly (for example, by the signatures of a majority, or by a majority vote in a ballot), or indirectly (for example, by the signatures of a majority of the individuals selected by employees to represent them in information and consultation negotiations)
If your existing arrangements fulfil these requirements, but 10% (or more) of your employees nevertheless come forward with a formal request for new arrangements, you will either have to instigate changes, or ballot your whole workforce to find out whether they agree with the need for a change, or are happy with the existing arrangements. If the ballot indicates support for change and you don't start negotiations (or do but fail to agree), a set of 'standard procedures' will apply, determining what you must inform and consult about, and how you do it (see 7).
7. Should we initiate negotiations for agreeing a new I&C agreement, even though we already have one?
If you have existing arrangements, and believe they fulfil the legal requirements (see 6) and your employees are happy with them you can pre-empt any formal request by employees by announcing that you are going to hold a ballot. You must leave 21 days between that announcement and the ballot, in case anyone wants to challenge the legality of your arrangements before the Central Arbitration Committee (CAC) - the body that polices these arrangements.
If the ballot fails to drum up support for change from 40% or more of your workforce (who must also comprise a majority of those voting), you do not have to change your agreement, and also benefit from a three year moratorium during which no changes can be made unless both you and your employees agree them.
If it shows that 40% or more of your workforce (who also comprise a majority of those who vote) want a change, you will have to negotiate a new agreement - but, again, once you've done that you benefit from an identical three year moratorium.
In either event, the benefits to you of having initiated negotiations are that the matter is done and dusted for three years - you don't have the threat of a possible employees' request for negotiations hanging over you - and you have the kudos of having asked for your employees' views without having been forced to do so.
Either way, it is your responsibility as employer to arrange (and pay for) any ballot of employees. If anyone is unhappy with the way you have conducted it, they may also take that to the CAC, though they must do so within 21 days of the ballot.
8. Our existing arrangements work well, but they don't cover all employees, and they have never been formally approved. Can we remedy these deficiencies now?
Yes, but your employees may still be able to challenge the validity of the arrangements at the Central Arbitration Committee so take legal advice before you do.
9. We don't have any sort of I&C procedure - can we be forced into this whole process by a single trouble-maker?
No. At least 10% of the employees of the undertaking (subject to a minimum of 15, and a maximum of 2,500) must back a request to negotiate an I&C agreement. The request must be in writing, dated, and state the names of the employees making it.
Such a request can be made through the Central Arbitration Committee if the employees in question want to remain anonymous.
10. An employee has said they will be asking us for data on our employees, for information and consultation purposes. Do we have to provide it?
Yes, providing that the request is made in writing and dated. You need to provide the information within one month of the request, clarifying the numbers of part-time workers (see 4) and excluded workers (for example, temporary agency workers, sub-contractors, freelances, non-executive directors, etc) in doing so. If you fail to provide the information, or provide it in a way which is likely to mislead on the issue in question, the employees may make a formal complaint to the Central Arbitration Committee.
11. If we get a request for negotiations over an I&C agreement, how long do we have to work out whether the request is valid?
One month from the date of the request - normally the date on which the request is sent to you, except when:
- an 'anonymous' request has been made through the Central Arbitration Committee (CAC) (see 7), in which case it is the date that the CAC informs employers and employees of how many employees have made the request; or
- the 10% threshold has been achieved, where requests short of that figure have been aggregated over a six month period
The date of the employee request is also used to calculate various other reference dates, including:
- the date for calculating the number of employees in the undertaking (see 3)
- the start of the three year moratorium for further requests, where employees fail to endorse an employee request in a ballot
- the start of the three month period for initial negotiations on an I&C agreement
- the start of the six month period after which the standard I&C provisions will apply, if you fail to do anything about an I&C request
12. Should we initiate negotiations for setting up an I&C agreement ourselves?
If you yourself initiate negotiations and reach agreement, you benefit from a three year moratorium during which employees can't require you to renegotiate the I&C agreement. So you don't have the threat of a possible employees' request for negotiations hanging over you - and you have the kudos of having asked for your employees' views without having been forced to do so. Take advice if you are unsure what to do. You will have to make arrangements for the employees to appoint or elect representatives who will negotiate the new agreement ('negotiating representatives'), and invite them to enter into discussions with you.
13. Once we have entered into negotiations, how long do we have to reach an agreement?
Six months in the first instance (starting within three months of negotiations being instigated by you or your employees). If you cannot agree within the six months, the time can be extended without limit by agreement with a majority of the negotiating representatives, or by up to another six months by you unilaterally. If there is still no agreement at the end of this period, the 'standard procedures' will apply (see 6). If you have done nothing, not even arranging for the selection of negotiating representatives, you could be liable to a substantial penalty.
14. What are we negotiating over?
Whatever is necessary to ensure that the new arrangements allow employees to be properly informed and consulted. It is up to you and the negotiating representatives to decide what you will discuss, although in broad terms it should cover matters such as:
- are employees to be informed and consulted directly, through any I&C representatives they appoint or elect, or through some combination of the two?
- how are any I&C representatives to be chosen, how many of them will there be, and how are they to be replaced?
- on what subjects will information and consultation take place?
- what information is to be provided?
- how often are employees to be informed and consulted?
- how will you as employer be represented?
- how will you give your response to employees' views?
15. Are the negotiating representatives and the I&C representatives the same?
They could be the same people, though they don't have to be. It is up to you and the negotiating representatives to decide how many I&C representatives are needed, and how they are to be selected, unless the standard provisions apply (see 6), in which case there must be one I&C representative for every 50 employees (rounded up), with a minimum of two and a maximum of 25, and they will have to be selected by a ballot of the workforce. Even if they do not apply, the standard provisions are a useful guideline.
16. If we refuse to enter into negotiations, or do so but fail to agree, what happens?
The 'standard procedures' will apply. This means you must provide 'appropriate' information to I&C representatives on 'the recent and probable development of the undertaking's activities' - which might include:
- information on new products or services, or significant changes to the provision of existing products or services
- increases or reductions in production or sales
- takeovers or mergers
- developments in technology
- reorganisation of the undertaking
- changes in senior management
- changes to aims and objectives
You must inform and be prepared to consult on 'the situation, structure and probable development of employment within the undertaking' - which might include:
- moves to shorter hours working
- possible changes to retirement policy
- possible reorganisation of employment within the undertaking
You must also inform and be prepared to consult 'with a view to reaching agreement' on decisions likely to lead to substantial changes in work organisation or in contractual relationships - which might include:
- redundancy or transfer decisions
- changes in policy on flexible working, part-time working or overtime
- changes in shift working, etc
- substantial changes in terms and conditions
- changes to occupational pension schemes
- changes in disciplinary and grievance procedures
- introduction of significant new technology
Once the standard provisions apply, there is a three year moratorium on any unilateral attempt to change them.
17. Once our agreement is in place, do we have to take any notice of what employees say in consultation?
You have to listen and give a reasoned response, but you are not obliged to follow the suggestions put forward by the I&C representatives.
18. Are there matters we can avoid informing or consulting about? What about trade secrets, or takeover negotiations?
You can withhold information altogether, where disclosure would seriously harm the business. Where the information is less critical, but you would still prefer it to be confidential, you can discuss it with the employees' I&C representatives on a confidential basis.
19. What are the business benefits of having an I&C agreement?
Higher levels of employee commitment and engagement, reduced absenteeism, reduced staff turnover, an increased demand for training, higher levels of productivity, performance and customer satisfaction.
20. Can employees ask for changes to a negotiated agreement, once it is made? Will we have to go through this process every three or six months?
No. When you reach a negotiated agreement (or the standard provisions apply, or a pre-existing arrangement has been upheld by a ballot of employees), there is a three-year moratorium on unilateral requests for further changes. You can jointly negotiate a new I&C agreement at any time. If you do intend to amend an agreement, however, take legal advice.
21. What do we do if the I&C arrangements don't work satisfactorily?
Provided you can get the employee representatives to agree, you can terminate the existing agreement and adopt another, or rely on the standard I&C procedures. If there has been a 'material change' in the undertaking (for example, because of a takeover), you (or the employees) can initiate moves to reach a new agreement.
22. What happens if we just ignore the whole thing?
The standard provisions apply automatically to any British undertaking with more than 50 employees, six months from the date of the employee request. If you have made no move, even to initiate the choice of negotiating representatives, you could be liable to penalties (see 23).
23. What are the penalties for ignoring requests for action on I&C, and under what circumstances might they be invoked?
The maximum penalty that can be applied is £75,000. Penalties only apply where the Central Arbitration Committee (CAC) upholds a complaint that the employer:
- has failed to inform and consult as required by a negotiated agreement, or the standard I&C provisions (whichever is relevant)
- has, if subject to the standard I&C provisions, failed to arrange a ballot to elect I&C representatives
However, where employers do attempt to ignore the whole thing, the courts have shown themselves prepared to be very tough. Employees who are subjected to detriment as a result of their attempts to get the I&C regulations implemented can also take their complaints to an employment tribunal.
The article above was written with considerations from Corporate Law tutors in Lancaster and Commercial Law advisors based in Wigan. In relation to the article above our solicitors who serve areas such as Southport, are able to offer expert legal advice on this subject.
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