Information and Consultation: The New Regulations

1
Information and Consultation The New Regulations

• David Coats, Head, Economic and Social Affairs
  Department

2
Introduction

• The UKs representation gap
• The requirements of the Information and
  Consultation Directive
• Why does it matter?
• What next?

3
The representation gap in the UK

• Surveys report a lower level of information and
  consultation than employers rhetoric suggests
• Fewer than a fifth of employees report frequent
  consultation on workplace change
• 17 asked their views on future work practices
  and 14 on plans for the workplace
• Only 8 consulted about redundancies and 5 on pay

4
Information and consultation is popular All in
all do you think your workplace would be better
with? ( of employees, BWRPS 2001)
5
The importance of the IC Directive

• A guarantee of worker voice
• A spur to higher performance
• Based on the evidence that a mix of direct and
  indirect participation works best

6
Workers favour an organisation whose primary goal
is to work with management to improve the
workplaceover an organisation that defends
workers against unfair treatment by management
(Source BWRPS 2001)
7
The Directives requirements

• A minimum framework partial harmonisation
• Informationtransmission by the employer to the
  employees representatives of data
• Consultationexchange of views and dialogue
  between employees representatives and the
  employer

8
What is subject to IC?

• Information on recent and probable development of
  the undertakings activities or economic
  situation
• Information and consultation on employment
  matters
• Information and consultation with a view to
  reaching an agreement on substantial changes in
  work organisation and contractual relations

9
Flexibility through agreements

• Provided for in Art 5 of the Directive
• Must be freelynegotiated
• Defining practical arrangements for IC
• Must be consistent with Art 1
• Therefore must be negotiated by representatives
  and must provide for IC with representatives
• Anything less an inadequate transposition

10
Worker participation counts

• Teamworking/group delegation has a positive
  impact on - quality - output -
  absenteeism - sickness (EPOC 1997)
• Individual delegation/empowerment led to -
  faster throughput time - increases in output
  (EPOC 1997)
• Successful delegation depends upon information
  and participation to build trust
• Relationships are critical

11
Direct and Indirect Participation

• Optimum results secured by a mix of direct and
  indirect participation (EPOC 1997)
• Reliance on direct participation only leads to
  less employee involvement and poorer productivity
  (Wood and Fenton OCreevy, 1999)
• Unionised workplaces more likely to make use of
  HPWS (WERS 1998, Gallie et al 2002)
• US evidence suggests that HPWS unionisation
  delivers higher productivity (Black and Lynch
  1999)

12
Barriers to high performance/high trust

• Management competence
• Other pressures maximise shareholder value,
  meet your targets
• Ratner was right!
• Unitarism v pluralism
• Low trust

13
Conclusion

• Evidence of what makes for high performance very
  persuasive
• UK has serious barriers to high performance
• IC may start to make a difference but only if
  employers are imaginative enough to grasp the
  opportunity
• Govt must set the tone and be enthusiastic
  about IC implementation