Q&A
1. Consultation and providing information to employees seems to be at the heart of good employment relations, but it can be confusing. When are you required to consult with employees?
Consultation is indeed essential. In some cases there is a statutory requirement to consult with employees, but even where there is no legal duty for prior consultation, in many cases talking to employees can enhance employment relations, and lead to better results for both parties.
The requirement to consult is distinct from the requirement to meet with an employee to discuss, for example, a disciplinary issue. Rather than affecting one or two employees, and arising following an act or event, consultation requirements generally arise when an act or event is anticipated. Usually this will affect either the whole workforce or a pool of employees.
The three main events leading to consultation are:
- proposed redundancies
- proposed transfer of undertakings
- related to the Information and Consultation of Employees Regulations 1999 (“ICE“)
Consultation may also be required, for example, where changes are made to terms and conditions of employment.
2. What are the main consultation duties relating to proposed redundancies?
Where redundancies are proposed, an employer is required to disclose certain information about the proposed redundancies, so that employee representatives can play a useful part in the consultation process. Information including the following must be disclosed:
- reasons for the proposed redundancies
- numbers and descriptions of employees affected
- proposed method of selecting the employees who may be redundant
- proposed method of carrying out the dismissals, taking account of any agreed procedure, including the period over which the dismissals are to take effect
3. Must an employer consult employees over proposed redundancies?
An employer must consult with a trade union or employee representatives if 20 or more employees are proposed to be dismissed at one place of work over a period of 90 days or less.
Consultation must take place with a view to reaching agreement with the appropriate representatives and must include discussion about:
- ways of avoiding redundancies, including any suitable alternative employment
- reducing the numbers to be dismissed
- mitigating the consequences of any redundancies
Employers also have a duty to act fairly and reasonably in handling redundancies and informing and consulting affected employees individually, regardless of the number of dismissals.
4. What is a protective award for failing to consult over redundancies?
In cases where employers have failed to consult over proposed redundancies an employment tribunal can make a ‘protective award’. The employer is required to pay employees covered by a protective award their normal week's pay for each week of a specified period of up to 13 weeks, known as the protected period, regardless of whether or not they are still working.
To be covered by an award, employees must:
- belong to a group specified in the award;
- be employees whom the employer plans to dismiss or has already dismissed as redundant; and
- be employees in whose case the employer has failed to comply with the information and consultation requirements.
5. Now what about proposed transfers of the business?
Employees have the right to be consulted when a business or undertaking, or part of one, is transferred to a new employer. This right extends to both those employed by the business acquiring a new undertaking and to those who work at the undertaking subject to the take-over.
An employer must tell a trade union or employee representative:
- that the transfer is going to take place, approximately when it will do so, and why
- the legal, economic and social implications of the transfer for the affected employees
- whether the employer envisages taking any action (reorganisation for example) in connection with the transfer which will affect the employees, and if so, what action is planned.
If action is planned which will affect the employees, the employer must consult their representatives. The consultation must be undertaken with a view to seeking agreement.
6. Finally, what are the rights of consultation under the Information and Consultation of Employees Regulations 1999 ("ICE")?
Employees are granted the right, under ICE, to be:
- informed about the business's economic situation;
- informed and consulted about employment prospects; and
- informed and consulted about decisions likely to lead to substantial changes in work organisation or contractual relations, including redundancies and transfers.
Initially, the ICE regulations applied to businesses with 150 employees or more. From 6 April 2007 the regulations applied to businesses with 100 or more employees and from April 2008, will apply to those with 50 or more. The Regulations do not apply to businesses with fewer than 50 employees.