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Consultation Framework

July 7 2003 - The government is required to implement the EU Directive on Information and Consultation. The Directive takes effect for firms with 150 employees or more in 2005, those with 100 or more in 2007, and those with 50 or more in 2008. Following the publication of a discussion paper, High Performance Workplaces: The role of Employee Involvement in a modern economy in July 2002, the DTI has now agreed a framework with the TUC and CBI.

The agreed framework for implementing the directive is intended to avoid riding roughshod over existing arrangements between employers and employees. It also takes account of the wide range of existing arrangements in the UK by:

- facilitating voluntary agreements, rather than laying down detailed 'one size fits all' rules that apply to everyone;

- allowing pre-existing agreements to continue if they have both workforce and employer approval;

- ensuring that arrangements which have been agreed with the workforce cannot be overturned by a small minority of employees.

Employees will be able to request information and consultation arrangements from their employer if they can present a petition from 10% of the workforce. This would be followed by a period of time for negotiating a voluntary agreement. But if arrangements are already in place that have been agreed with employees, the employer may ballot the workforce to see if they endorse the request for new arrangements. Only if at least 40% of employees endorse the request for new arrangements would the existing ones have to be changed.

Organisations will be able to agree with their employees the information and consultation arrangements that best suit their needs and circumstances. Where no agreement is reached by negotiation, standard provisions would apply, based on the requirements in the Directive.

Enforcement of the provisions will be by a range of bodies such as the Central Arbitration Committee, Employment Tribunals and the civil courts. Sanctions for companies who break the rules will involve a mix of remedies based on specific performance orders and financial penalties of up to 75K depending on the size of the firm and other factors.

Trade and Industry Secretary, Patricia Hewitt, said:

"I want these changes to lead to a "no surprises" culture at work where employers and employees discuss common ground and find solutions to mutual problems. I want to see an end to the climate where people only hear about job losses from the media, over their breakfasts.

"We have reached this agreement with the CBI and TUC through constructive dialogue and discussion. It's exactly the spirit in which we all want new rules on information and consultation to operate in workplaces across Britain." CBI Director General, Digby Jones, said:

"The Government has made sense of a poor piece of EU legislation. It has protected good consultation, which matters so much to employers and employees. It has also avoided overly rigid rules and damaging one-size-fits-all solutions."

TUC General Secretary, Brendan Barber, said:

"Information and consultation rights are good for both employees and business. These proposals are all about building trust, respect and partnership in the workplace, a crucial ingredient in closing the UK's productivity gap."

ACAS Chair Rita Donaghy welcomed the new framework:

"ACAS has for many years promoted the importance of good communication and effective employee involvement. Ensuring that everyone has a say in decisions that affect them is the basis for building better relationships within workplaces.

"Effective employee involvement is also a key to good decision making, smooth management of change and organisational improvement. Our most successful workplace projects combine the joint development of arrangements with a real commitment from managers and employees to improved information flows and consultation arrangements.

"No two workplaces are identical and so no single model of information and consultation will apply. But recent research carried out with our own specialist advisers has been valuable in identifying a set of principles to ensure arrangements are effective and sustainable. Key elements for success include commitment from senior managers and employees, training and a focus on issues of real concern.

"Drawing on our practical experience in setting up information and consultation processes, we look forward to playing an active role in helping organisations to respond to these new requirements. The report itself highlights the wide-ranging role we can play through providing training, advice and guidance on best practice.

"I welcome the way in which the TUC and CBI have worked together to agree the framework for implementing the Directive. As Chair of a body that fully recognises the importance of the joint involvement of employer and employee representatives, this gives me particular pleasure."

See the Work Foundation's comments at Wall of Silence Employers .

The consultation document High Performing Workplaces: Informing and consulting employees is available on the DTI website The consultation closes on 7 November 2003.

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