Employers with 100 or more employees have a duty under the Information and Consultation of Employees Regulations 2004 to provide their employees with information and to consult them on major business decisions which affect them at work, with a view to reaching agreement on decisions likely to lead to substantial changes in work organisation or the contractual relations between them and their employees.
The legislation applies to anyone carrying out an economic activity, whether it is a business, a school, a public sector body or a charity.
Earlier this year, the Central Arbitration Committee (CAC) found that Macmillan Publishers Ltd. was wrong to ignore a valid request from employees for information and consultation arrangements. The company had argued that it already had adequate arrangements in place but the CAC disagreed and ordered it to arrange for the holding of a ballot of its employees to elect information and consultation representatives. However, no such action was taken by Macmillan.
The union, Amicus, therefore made a complaint to the Employment Appeal Tribunal (EAT), which found that there had been an ‘unacceptable dragging of feet’ over complying with the order and regarded it as a ‘very grave breach affecting many employees’. The EAT stressed the importance of these rights for workers. It therefore fixed a penalty notice of £55,000, to act as a deterrent to others from adopting ‘what can only be described as the wholly cavalier attitude to their obligations that has been demonstrated by this company’. This is the first time a penalty has been awarded for failing to comply with the legislation. The maximum penalty is £75,000.
The Information and Consultation of Employees Regulations will apply to employers with 50 or more employees from April 2008.