INFORMATION

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

• Dont 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 IC inadequate
• Earlier IC preferred (Renault / MS / 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
IC 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
IC Regs Introduction

• April 2005 gt150 employees (c.14,000)
• March 2007 gt100 employees
• March 2008 gt50 employees (c.38,000 in all)
• Employees in the undertaking

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Overview

• High Performance Workplaces
• Flexibility (allegedly)
• Obligation to IC
• Comply with Directive
• Empowering Trade Unions ?

10
Overview The Structure of the Regs (1)

• Voluntary
• Negotiated
• Statutory

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Overview The Structure of the Regs (2)

• Obligation to negotiate an IC 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)

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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 IC reps

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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 IC procedures
• More than one undertakings employees

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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

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Pre-Existing Agreements (3)Employee Approval

• Simple majority in ballot
• Majority through signatures
• Agreement of those representing majority
• Different methods for different agreements

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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)
• lt40 or minority no endorsement
• Therefore, no obligation to negotiate
• Pre-existing agreement stands
• 3 year moratorium

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Pre-Existing Agreements (5)Effect

• Does not let you off the hook
• Still need a ballot
• If survives - 3 year moratorium
• If it doesnt survive - negotiate a new IC
  process
• Going on to the negotiated procedure

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Do You Have a Pre-Existing Agreement ?

• Irrelevant unless trigger pulled already
• Dont drive policy based wholly on it
• Adapt existing processes
• with half an eye to a PEA
• Unlikely that you can satisfy it

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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
• IC Regs up to 75,000 fine

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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 ?

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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

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Conclusion

• DONT PANIC
• Avoid the trigger
• Not necessarily a PEA
• Satisfied workforce
• Engage trade unions