MacRoberts warns employers : focus on talking the talk- or face potential penalties

BUSINESSES which fail to talk to their employees about certain business issues could face hefty penalties for breaking the law, from next April, MacRoberts, solicitors, is warning.

Employment law partner, Alan Masson is urging employers to prepare now for incoming rules designed to give employees a greater ìsayî in strategic decision making.

The Government plans to introduce the first phase of the Information and Consultation Regulations next Spring. It seems very likely that from 6 April 2005, businesses employing 150 or more employees will be subject to a new statutory scheme the principal aim of which is to require employers to inform and consult their employees about a potentially wide reaching number of issues regarding the business and employment prospects.

There is a very important proviso though and that is that the statutory information and consultation rules will not be triggered in individual businesses unless at least 10% of the workforce requests an information and consultation arrangement or if the employer voluntarily decides to negotiate an information and consultation agreement with the workforce.

In those cases the employer is likely to have a 6 month period to negotiate a satisfactory arrangement. If the employer fails to do so, a statutory scheme will apply. This sets out rules about the number of employee representatives, elections of those representatives and the matters about which the employer should inform and consult employees, amongst other issues. Businesses that have satisfactory arrangements in place prior to the Regulations coming into force, will not require to go through the process of agreeing another arrangement, unless there is a request by at least 10% of the workforce for another arrangement and that request is subsequently endorsed in a ballot by at least 40% of the workforce. If the request is not endorsed, a three year moratorium on the arrangements would apply, except where there are significant changes in the business.

Current estimates are that the Regulations will be laid before Parliament soon with a view to parliamentary approval being given in December.

ìThe governmentís rationale is that it is no longer acceptable for employees to first hear significant news about the business in which they work on the TV news ñ or by email, with the often quoted example being, that their factory is closing and that theyíre losing their jobs,î Mr Masson explains.

ìThe bottom line is the Government wants more consultation between management and employees to create a ëno surprisesí culture and talking to recognised trade unions may be one route to achieve this. Employers who ignore the law are likely to expose themselves to fines of up to 75,000, if they donít inform and consult as required.

Itís very important to be aware that although this is about information and consultation it is not about imposing obligations on employers to enter into extensive negotiations, whether with trade unions or other employee representatives, about how they run their businesses. In other words employers may have to provide information and to enter into discussion but they do not have to reach agreed outcomes, come what may.

Employers who employ 150 or more should be using the lead in period before next April to identify how they should be dealing with relevant issues and whether, to maximize their position, they ought to be offering a satisfactory voluntary arrangement either before or after next April. î