The Problem
It is 6 April 2005 and your business receives a letter from staff asking you to set up an information and consultation body. It says that you have three months to act. Your managing director wants to know what the employees are referring to and what is the business's response to the request.

The Law
The Information and Consultation of Employees Regulations will be effective from 6 April 2005. They will require businesses with 150 or more employees to put in place an information and consultation body where a valid request has been received from 10% or more of their employees. The regulations will cover businesses with 100 or more employees at first and then those with 50 or more employees in the following two years.

Expert Advice
The regulations threaten to have a major impact on businesses in the UK's leisure and hospitality sector. Once a valid employee request has been received by an employer, a statutory timetable starts which, potentially, allows the employer only nine months to negotiate and put in place an information and consultation body. If this cannot be done, then statutory default provisions come into play.

It may be tempting to think that with a transient workforce a 10% request is unlikely, but the 10% can be made up of a number of requests over a six-month period. Additionally, it must be questioned whether 10% is that large a part of the workforce - it might, for example, take only one organised site to get over this threshold.

The default provisions require an employer to organise the election of employee representatives and then inform and consult on a wide range of business issues and activities. The obligations include informing about changes to products, services and business performance, including financial figures, market information and takeovers and mergers. They also include consulting on matters that may affect developments in the workforce, such as recruitment drives, reorganisations and training and development.

The default provisions also include a requirement for employers to consult with a view to reaching agreement on matters that are likely to lead to substantial changes in work organisation or contractual relations, eg, redundancies, shift changes and changes to terms and conditions.

The regulations recognise pre-existing voluntary information and consultation bodies if certain minimum conditions are met. Where such a body is in place, it will take 40% support among employees to trigger the statutory process.

Businesses cannot afford to ignore the new regulations, even if they will not be caught until 2006 or 2007. At the very least, businesses need to consider the potential impact of the regulations and the benefits of being proactive and bringing in a voluntary agreement to avoid the default provisions.

The statutory timetable is tight, and the default provisions are inflexible. If a business receives an employee request and it is not ready for the regulations, it will be on the back foot. It may be time for businesses to accept that a more inclusive and open approach to decision making is on its way and take proactive steps to put in place information and consultation provisions that work for them.

Check List
- Hold management and human resources meetings to consider the impact on your business.
- Conduct audit of current information and consultation measures.
- Assess exposure to a valid request.
- Decide on company policy.
- Consider proactive set up of an information and consultation body.
- Prepare strategy of responding to a valid employee request.

Beware!
The regulations will be enforced by the Central Arbitration Committee and the Employment Appeal Tribunal, which is empowered to fine employers up to £75,000 per offence.

Contacts
Michael Bradshaw, Charles Russell
020 7203 5000
www.charlesrussell.co.uk

www.acas.org.uk - contains useful general employment information
www.dti.gov.uk/er/ - contains information on ICER