Information and Consultation Agreement
How do the Consultation regulations work?
The Regulations oblige employers with 50 or more employees to negotiate the terms of an Information and Consultation Agreement (“ICA”) with elected representatives when requested to do so by at least 10% of its employees. An employer can also initiate the procedure on a voluntary basis.
Which organisations does this apply to?
Any public or private undertaking carrying out an economic activity, whether or not it is for a profit.
How is the number of employees calculated?
The number of employees employed in the 12 months before the process is triggered, including part-time workers (counting as one or a half according to their hours), but excluding agency workers and contractors.
What about divisions, subsidiaries and group companies?
The number of relevant employees is confined to the specific company that is the subject of the request. Divisions and sub-divisions, geographical locations, subsidiary and other group companies are all disregarded for the purpose of counting employees within a single company.
What about existing agreements?
There is no obligation to introduce an ICA if the employer already has a pre-existing agreement that is in writing, covers all employees in the undertaking, has been approved by a majority of them and sets out a basis for giving information and seeking views. The employer must re-negotiate this if requested by 40% of relevant employees, or 40% voting in a ballot.
How should an employer respond to a request for an ICA?
The employer must initiate negotiations within 3 months of the request being made and in the meantime conduct elections for appointing representatives that will represent all employees of the undertaking. Negotiations can last for up to 6 months, which can be extended by the agreement of a majority of the representatives.
What form must a negotiated ICA take?
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The ICA must be in writing and dated, cover all employees and be signed by either all the negotiating representatives, or if signed by only a majority of those representatives then approved by at least 50% of the employees either in writing or in a ballot (to be fair, open to all employees and held in secret where possible). It must provide either for the election of consultation representatives, or for the employer to provide this information to the employees direct.
What if an employer fails to comply?
If the employer fails to begin negotiations following a valid request, then after the sooner of 6 months from the date of the request, or 6 months from when consultation representatives were elected, a default framework for information and consultation will apply. This framework will also apply if negotiations are unsuccessful after either 6 months, or any agreed extended period.
What does a default or standard ICA cover?
The default provisions require an employer to provide information to consultation representatives and thereafter to consult with them. The information requirements cover (1) the recent and probable development of the organisation’s activities and its economic situation, (2) the situation, structure and probable development of employment within the business and any threats to employment within the organisation and (3) decisions likely to lead to substantial changes in work in the organisation or contractual relations.
The consultation requirements oblige the employer to consult the consultation representatives on the issues at (2) and (3) above, but not issue (1). Consultation on (3) above need only be “with a view to reaching agreement”.
The employer must also give a reasoned response to consultation representatives, allow sufficient time for information to be considered and enable the representatives to meet with the employer at a sufficiently senior management level. There should be at least 2 representatives and one for every 50 employees (or part thereof).
How does an ICA affect redundancy and TUPE consultations?
An employer can avoid having to duplicate the information and consultation requirements on redundancy and TUPE by confirming to the consultation representatives that it will comply with these information and consultation obligations separately.
What information is excluded from an ICA?
Employers are not expected to provide confidential information if this would seriously harm the functioning of the business, or cause prejudice to it. Consultation representatives also have duty of confidentiality and could be liable in damages if they breach that duty.
What is the penalty for non-compliance?
A penalty of up to £75,000 is recoverable through the Central Arbitration Committee. There is no remedy for non-compliance through an Employment Tribunal, although negotiating and consultation representatives are protected from dismissal and unfair treatment for carrying out their duties.
How soon can an ICA request be re-submitted?
A request cannot be made either three years after the date of a negotiated agreement or the application of the default provisions, or three years from the date of an unsuccessful request and ballot, unless in each case there are material changes affecting the business that make current arrangements inappropriate.