These ‘cornflake redundancies’ have been all too common in the modern business world. High-profile examples include Accident Group – where 2,400 workers were ignominiously sacked by text message – and the sudden administration of Rover in 2005, putting nearly 6,000 workers out of a job at its Longbridge site overnight.

Thanks to European legislation, however, such incidents should in theory be a thing of the past. In April 2005, the Information and Consultation of Employees (ICE) Regulations came into force.

The Information and Consultation (I&C) Directive, as it is more commonly known, gives employees the right to be informed and consulted about the business they work for. Initially, only affecting companies with more than 150 employees, on 6 April this year it was widened to include firms with at least 100 employees. In April next year, it will extend to firms with more than 50 employees. All business owners and shop-floor workers concerned are wise to pay close attention to how the I&C laws affect them.

Short notice
“The I&C regulations are going to be a major feature of UK employment law for some time,” says Amicus assistant general secretary Tony Burke. “Prior to this legislation, companies were getting away with making announcements on job losses, redundancies and closures at very short notice.”

Now, employers are obliged to consult their workforce on an ongoing basis, to ensure that employees have a better idea of potential changes in the workforce. These can include substantial changes in the economic situation, work organisation, contractual relations and future employment prospects and decisions.

This consultation works through the deployment of employee representatives. The role of the rep is to garner the appropriate information from employees, present feedback and receive a reasoned response. Employers have the ability to withhold information that could harm the company, or request that it be kept confidential by employee reps, where they can justify so doing.

The most important aspect of the legislation is to establish a working I&C agreement. No employer is obliged to do so unless a valid employee request is made in writing by a minimum of 10% of the workforce. However, by proactively establishing an agreement, employers are then better placed to negotiate on its terms within the scope of the flexibility that the legislation permits.

Amicus and the BPIF share a working ‘model’ I&C agreement as part of their Partnership at Work document. “Rather than a guideline, we think of the model as providing a set number of principles that we think are applicable to the majority of company situations – it is a partly-cooked agreement if you like,” explains BPIF corporate affairs director Andrew Brown. “From there, it’s something that employers and reps can work on together and develop in line with their employee relations culture.”

Brown is keen to stress that the purpose of an I&C forum is “exactly what it says on the tin”, which is to inform and consult. “It’s not a collective bargaining forum as such – it’s basically providing a vehicle for employee reps to have an input into decisions before they are made,” he adds.

Those decisions could subsequently be the subject of collective bargaining in another forum, or they could be the subject of a decision by management alone. “It doesn’t mean that employee views will necessarily be acted upon, but it does mean they have been heard and understood, and factored into the decision-making process,” says Brown.

Rather than perceiving it as a burden, employers should realise that establishing an I&C agreement can bring advantages. Tapping into the mindset and ideas of the workforce can help decision-making at management level, while enabling employers to judge likely reactions to future decisions.

Some might argue that an I&C forum can slow down the whole decision-making process, losing a company its competitive advantage. “Of course, there are instances where decisions have to be made quickly, and the reps need to be receptive to that and respond immediately. However, in the main, an I&C forum should actually speed things up,” says Brown. “While there’s a little bit more time spent informing and consulting, it can more than pay for itself when it comes to the final decision, because when it’s rolled out, there’s immediate support for it.”

Confidentiality agreement
There is also the issue of confidentiality to consider. If companies give elected bodies sensitive commercial information, what can be done to stop them passing that on? David Potter, head of employment at law firm Freeth Cartwright, suggests that by proactively creating a voluntary agreement, an employer can limit the areas to which a consultation can be made.
“For those companies where the unions are sniffing around the edges, there is perhaps an advantage to take things into their own hands,” says Potter. “I’m not taking sides here – of course unions can be very effective and useful bodies – but that is not always the perception of management.”

Brown believes that as the legislation is still in its infancy, there’s sensitivity among managers about sharing their thinking and an equal sensitivity among employee reps about sharing that information and not being able to pass it on. “It’s very much about trust, and people not abusing that trust. That can only build over time, knowing you can actually rely on the people on the other side.”

Amicus has been hard at work trying to establish I&C agreements with a number of employers in the print sector. “We are currently in discussions with at least half a dozen large companies to secure good quality I&C agreements,” says Burke. “We’ve trained all our officials and will be ensuring that companies with at least 100 employees are covered by I&C agreements by the end of the year. It’s a massive task but we hope to get there.”

Clearly the I&C Directive is a very complex piece of legislation that employers cannot afford to sweep under the carpet. Having a proper process of employee communication and dialogue is not only good for employees, there are benefits for the organisations they work for. And breakfast times in the future are likely to be far less traumatic as a result.

The law I&C
– The ICE Regulations introduced a new regime whereby employers can voluntarily agree to consult their staff about economic and other employment-related issues. This is supplementary to other areas in which employers have to collectively consult, for example, transfers of undertakings, collective redundancies and changes to pension schemes
– Unlike other employment law, employers are not required to do anything. But the advantage of the employer taking the initiative is the flexibility available
– Alternatively, it is possible for the employees to request to establish I&C procedures. This request must be made by at least 10% of the employees, subject to a minimum of 15 and a maximum of 2,500
– If agreement is not reached then the Standard Information and Consultation Provisions can apply, which set out mandatory requirements for the employer to inform representatives of prescribed information and also consult on other issues
– Provided that satisfies the requirements of a ‘Pre-existing Agreement’, then the employer may be able to resist a request for an I&C for up to three years
Source: David Potter, head of employment, Freeth Cartwright

CASE STUDY: MACMILLAN
In February, the Central Arbitration Committee (CAC) ruled that book publisher Macmillan was in breach of employment legislation, following a complaint made by Amicus. The complaint was part of the union’s long running campaign to set up an I&C forum and, as a result, Macmillan is now forced to establish an employee-elected I&C body, covering every one of its 1,350 UK staff.

Macmillan has been ordered to set up proper procedures and elect employee representatives, and faces the threat of a £75,000 fine if it doesn’t comply.

Speaking at the time of the hearing, Macmillan group personnel director James Richardson said he was “naturally disappointed” with the decision. “We’ve operated formal staff consultation arrangements for 30 years. We will be studying the decision to see how we can best comply with it.”

“We are disappointed that the company has not entered into the spirit of the legislation,” adds Amicus assistant general secretary Tony Burke. “Amicus has reached a number of I&C agreements in the print, papermaking and media industries. We have also encountered a number of companies that are unwilling to enter into discussions with us, in the hope that the matter will go away. Well, it’s not going to and we will use the I&C legislation to get our members their rights.”