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Information and Consultation of Employees Regulations 2004

The Information and Consultation of Employees (ICE) Regulations came into force in April 2005 for all organisations of more than 150 employees, applied to businesses with more than 100 employees from April 2007 and this month apply to all employers of 50 or more staff.

The regulations represent a statutory framework giving employees the right to be informed and consulted on ‘business, employment and re-structuring issues’, some of which are already in common use, e.g. in areas such as Health and Safety and redundancy. What is different about the regulations is that a request from at least 10% of the workforce to set up a formal mechanism for information and consultation (for example, a regular forum where management and staff representatives meet) must be responded to by the business and failure to agree a structure will result in the complex system set out in the regulations being imposed. The consequences for employers are demonstrated in the case of Amicus v Macmillan Publishers Ltd. (HR News, October 2007) where Macmillan were both forced into adopting the procedures and fined £55,000 for not doing so earlier.

What should we be thinking about, then?

There is no requirement for a business to act unless they are requested to do so by at least 10% of employees, but it may be worth considering establishing a mechanism well before that position is reached:

• It may be stating the obvious, but 10% of employees in a business employing 50 staff is only 5 people and no-one wants to be ‘held hostage’ by a small special interest group of staff.
• The regulations allow employers to choose any system of consultation and will not impose one where it already exists. This means that a system designed to suit your business now may be preferable to the cumbersome one designed by legislators and imposed under duress.
• It may be in your interests to create a forum for positive reasons – there is some evidence that employees value forums where they are created, that managers in businesses with forums are more trusted and that employees express greater satisfaction with their work in firms where consultation forums exist.

Consider ICE as a strategic issue

In some recent research, a number of key factors influenced company strategy on implementing consultation forums, including:

• Corporate values – is it worth doing just because it suits your brand or wider aims?
• Is there something ‘big’ in the recent past or the near future of the business? Factors such as rapid growth, acquisitions, moving out of the public sector and audit failure often prompt moves to reform employment relations and introduce a consultation forum as part of a wider employee relations issue.

• Is there a wider emphasis on employee involvement? Representative-based ICE arrangements almost always operate alongside an extensive range of direct forms of employee involvement such as quality circles, contingent pay etc.
• What is your current trades Union position? Union avoidance is a factor in some organisations, as is moving beyond a union-based employment relations culture in others.

How to set up a forum

• Larger businesses may have multi-tiered arrangements, but most successful forums have a single body representing all employees. Design a process, communicate it to all staff and set about building some encouragement for it.
• Be clear about what the forum is there to discuss. Research shows that most employers are keen to add strategic issues to the agenda but that most employees gain benefit from discussions over car parking or other ‘housekeeping’ issues. The forum will lose credibility or gain it on the ability of the staff representatives to engage the leaders of the business in the issues that matter to staff.

• Senior Operations Manager, Managing Directors or Chief Executives are regular participants at those forums deemed to be successful, so make it a priority for them early on and publicise their involvement. The HR Manager could be, but doesn’t have to be a regular member of the forum and other senior managers are often drafted in as the agenda requires.
• Employees are best selected by secret ballot of the whole workforce with the election usually overseen by the HR department. Its important to get the electoral rules right to make sure that your election gives a workable body and not a platform for mal-contents. There are software tools to manage complex proportional representation systems which are worth investigating. Many political bodies are well versed in managing elections and are worth talking to for help and / or oversight to make your election more demonstrably fair and open.

• Most businesses report some encouragement by managers for candidates to stand for election.
• You should make training available for those elected and emphasise their role in cascading information back to the whole workforce. Ironically, research demonstrates that the flow of communication back from the elected members to the wider workforce is the weakest part of most forums.

In conclusion

Consultation forums are not to the taste of every employer – in fact many are quite forthright in expressing their opposition in discussion with us – but they do apply to 18,000 more organisations after 1 April 2008. When the regulations where first introduced they were slow to gain pace with larger organisations and many predict the same for smaller firms this time around but things may be different in the light of the MacMillan case and a more positive engagement from Trades Unions.

Whatever the risk management scenario, our experience is that those forums with best success do come as part of wider staff engagement initiative and in those circumstances are useful additions to employment relations activity.