At the same time, it was suggested that previously blocked proposals from Europe for increasing such rights might soon be brought forward. So what does this mean for employers thinking about restructuring in 2001.
Under existing UK law employers proposing to dismiss by reason of redundancy 20 or more employees at the same establishment over a period of 90 days have to inform and consult in good time through authorised employee representatives. Where there is a large-scale redundancy programme involving 100 or more employees, consultation must begin at least 90 days in advance of the first dismissal.
The definition of redundancy is wide, covering restructuring such as regrading and other variations in terms of employment. Obligations to inform and consult also apply where there is a transfer of a business undertaking (but not simply where there is a sale of shares). So why do we need European regulation?
Almost all member states of the EU already have a legal framework for informing and consulting employees. However, the European Commission felt that this wasnt effective because it was only applicable after the event. It has therefore proposed a directive to establish a general framework for the EC.
Organisations with at least 50 employees will be required to inform and consult workers about key issues facing them. These include information on recent and reasonably foreseeable developments in the organisations activities and its economic and financial situation; information and consultation on the situation, structure and reasonably foreseeable developments concerning employment, including anticipatory measures envisaged; as well as on decisions likely to lead to substantial changes in work organisation or in contractual relations such as collective redundancies.
Some information may be designated confidential for the purpose of the information and consultation process. But where there is a serious breach of the employers obligations for example withholding information or providing false information any decisions taken by the employer would have no legal effect on the employment contracts of the employees concerned. In other words, it would be difficult for an employer to change working conditions unilaterally as part of a restructuring exercise.
Opposition both from the Government and business groups appeared to have stalled plans for European regulation of information and consultation at the end of 1998. However under Frances presidency of the EU, the proposals are back on the agenda. Both the UK and Irish governments continue to block them.
One of the major criticisms has been the level at which the directive will apply. Denmark, Ireland and the UK have all expressed fears that the proposed threshold of 50 employees could result in discrimination between big and small employers. There are also disagreements about whether individual employees should be consulted directly by their employer or whether representative structures are necessary. The Commission believes that the right to be consulted should be given to each worker individually but exercised collectively. The UK also argues that the proposed framework is out of proportion to any perceived problems with current national procedures.
Trade unions support the new framework, arguing that the UK has the highest rate of mergers and takeovers in Europe possibly because there is less legal protection for UK workers. Furthermore regulation is needed because employment decisions initiated in Europe may be taken by non-European employers.
At the core of the debate is whether employers should be allowed to communicate directly with employees in accordance with national, and local, custom and practice. But perhaps more important will be the need for each employer to answer the question: what is the best practice and means of informing and consulting workers in the business concerned, whether it is a European or global operation?
E-mail address: janet.gaymer@haynet.com
Janet Gaymer is head of employment law at Simmons & Simmons