Consulting on Consultation

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The government has issued its consultation document on the draft Regulations implementing the EU Information and Consultation Directive.

The Regulations will apply to all businesses with more than 50 employees. If 10% of employees request it, the company must set up a workforce committee enabling full information and consultation with the workforce.

The company must then provide information to, and consult with, the committee on matters relating to the development of the undertaking, changes in employment patterns (particularly if there is a threat to employment) and decisions likely to lead to substantial changes in work organisation or contractual relations, such as changes to terms and conditions, TUPE transfers or collective redundancies.

The sanctions, though, are small. Employees can apply to the CAC if the employer has failed to comply with the Regulations. If the CAC orders the employer to take steps to remedy the position, and the employer fails to comply with the CAC's order, the complainant can apply to the Employment Appeal Tribunal which can impose a fine of up to £75,000 (irrespective of the number of employees affected). This is unlikely to be a sufficient deterrent to large companies to force them to comply with the information and consultation obligations on large or sensitive issues.

Neither the CAC nor the EAT will have power to reverse or suspend any decisions or actions taken by the employer whilst in breach of its consultation obligations.

The consultation period closes on 7th November. The draft Regulations are appended at the back of the Consultation Document.