9 January 2006

The Information and Consultation of Employees Regulations 2004 (ICE) has been in force for nearly a year now for large employers.  The second of the three phased implementation dates, for employers of between 100 and 149 staff, will not be until April 2007 but that does not prevent them or any size of employer from taking action early. Indeed there may be advantages in doing so!

When implementing the European Directive, which broadly required member states to ensure employers ‘inform and consult’ their employees on significant company matters, for example business restructuring, the Government sought to introduce flexible business friendly provisions. As such, to enable companies to implement procedures suited to their particular business the Regulations can be satisfied in one of three ways:

• A pre-existing agreement (PEA),
• A negotiated agreement, or 
• A standard (default) agreement.  

A PEA offers the most flexibility to employers, as the Regulations do not specify the content of a PEA, they are not enforceable (unless expressly stated in the agreement) and cannot be referred to the CAC. 

PEAs also demonstrate to the workforce that their employer voluntarily wishes to create a more open and co-operative work environment, and are therefore a useful labour relations tool. 

An employer may enter into agreement with the workforce to set up a staff forum prior to a statutory request from their employees. To be a valid PEA, such an agreement must be agreed in writing by a majority of the workforce or their Representatives.  

In a recent survey of 160 employers with over 500,000 staff undertaken by IRS Employment Review, 25% confirmed that they had taken advantage of the flexibility and had established a new consultation body in the 2 years preceding ICE coming into force in April 2005.

The IRS Employment Review survey (October 2005) revealed topics most commonly discussed are: pay and benefits; changes to employment status; health and safety; financial performance of the company; and company restructuring. 

Before your statutory obligations under the Regulations arise, shouldn’t you be considering seeking a PEA, setting up a staff forum and appointing employee representatives, who will have the opportunity to discuss employee issues and concerns on behalf of the workforce?

Remember PEA terms are usually less onerous and, unless otherwise agreed, binding in honour only.