1. INFORMATION & CONSULTATION Are You Ready ? Tom Flanagan 7 October 2004

2. Popular Misconceptions The new Regs require you to create a “Domestic Works Council” - NO ! You must put something in place by 6 April 2005 - NO ! A Pre-Existing Agreement means that you escape the Regs requirements - NO ! If you satisfy these Regs, you avoid the risk of penalties under existing laws on TUPE and collective redundancy - Not necessarily !!

3. Structure of Talk Choose your approach Directive: basic principles Regulations: current state / introduction Overview Key practical issues Practical solutions

4. Choose your Approach Don’t care / too busy / irrelevant Compliant Gain positive advantage (“High Performance Workplace”) Evangelical

5. The Directive - Basic Principles (1) General framework - up to Member States Existing law on I&C inadequate Earlier I&C preferred (Renault / M&S / Vauxhall) 3 levels: (Article 4): –inform –inform and consult –…with a view to reaching agreement

6. The Directive - Basic Principles (2) Exception (Article 5) Basis of “Pre-Existing Agreement” Agreement between “management and labour” Which does not need to follow Article 4 As long as “respecting the principles laid down in Article 1”

7. I&C Regs: Current State of Play In force by 25 March 2005 UK Government plans 6 April 2005 2 Consultation Papers: “High Performance Workplaces” - 2002/2003 Current Draft Regs / DTI Guidance DTI seeks views before 22 October 2004 Possibility of further change ?

8. I&C Regs: Introduction April 2005: >150 employees (c.14,000) March 2007: >100 employees March 2008: >50 employees (c.38,000 in all) Employees “in the undertaking”

9. Overview “High Performance Workplaces” Flexibility (allegedly) Obligation to I&C Comply with Directive Empowering Trade Unions ?

10. Overview : The Structure of the Regs (1) Voluntary Negotiated Statutory

11. Overview : The Structure of the Regs (2) Obligation to negotiate an I&C process if either/or… –employer volunteers –trigger is pulled Trigger: –10% of workforce –min. 15% / max 2,500 Unless: pre-existing agreement If neither: Standard Provisions (statutory fall-back)

12. Key Practical Issues Undertaking Pre-existing agreement Sanctions Overlap with existing law

13. Undertaking “a public or private undertaking carrying out an economic activity, whether or not for gain…” (similar to “old” TUPE DTI: “a separately incorporated legal entity” (why?) Not “establishment, division or business unit of a Company” But if TUPE jurisprudence applies, DTI guidance must be doubtful

14. Significance of Undertaking Application Trigger Pre-existing agreement Election / appointment of negotiating reps Election of I&C reps

15. Pre-Existing Agreements (1) Valid employee request (10%/2,500 (etc)) By less than 40% “in the undertaking” Agreement –in writing –covers all employees “in the undertaking” –approved by the employees –sets out I&C procedures More than one undertaking’s employees

16. Pre-Existing Agreements (2) Content not prescriptive ACAS guidelines Different parts of undertaking As long as, together, cover all employees of the undertaking Collective agreements

17. Pre-Existing Agreements (3) Employee Approval Simple majority in ballot Majority through signatures Agreement of those representing majority Different methods for different agreements

18. Pre-Existing Agreements (4) Effect No “Article 13” opt-out Still have to ballot or negotiate 40%+ majority = endorsement  negotiate Pre-existing agreements still exist? (Collective Agreements) <40% or minority = no endorsement Therefore, no obligation to negotiate Pre-existing agreement stands 3 year moratorium

19. Pre-Existing Agreements (5) Effect Does not let you off the hook Still need a ballot If survives - 3 year moratorium If it doesn’t survive - negotiate a new I&C process Going on to the negotiated procedure

20. Do You Have a Pre-Existing Agreement ? Irrelevant unless trigger pulled already Don’t drive policy based wholly on it Adapt existing processes …with half an eye to a PEA Unlikely that you can satisfy it

21. Why is it Unlikely ? Covers all employees in the undertaking Approval of the workforce

22. Sanctions Complaint to CAC (not for PEAs) Declaration Penalty notice, from EAT Max of £75,000 per failure Paid to DTI

23. Overlap with Existing Law (1) Collective Redundancies (s188 TULRCA) TUPE “Double” jeopardy –protective award: redundancy - up to 3 months –compensation: TUPE - up to 13 weeks –I&C Regs: up to £75,000 fine

24. Overlap with Existing Law (2) Overlapping obligations –redundancy: TU Reps / elected –TUPE: TU Reps / elected –ICON: reps under Regs Exclude ICON in redundancy / TUPE cases ? Hidden trap ?

25. Practical Solutions Employees in the undertaking –umbrella agreement –sub-committees Employee approval –existing procedures –reps are truly representative –“employee representative” not defined Voluntary / PEA: do what you like ? Collective agreements survive a PEA

26. Conclusion “DON’T PANIC Avoid the trigger Not necessarily a PEA Satisfied workforce Engage trade unions