EEF warns on regulation

EEF today warned that up to 10,000 companies not presently impacted by the ‘Information and Consultation of Employees Regulations’ will need to be aware of its provisions from 6 April. From this date, it will be extended to include smaller companies employing 100 or more employees.

The regulations, which carry penalties of up to £75,000 for non-compliance, previously applied only to firms employing upwards of 150 people. Partnerships, charities, associations, and public bodies will also be affected by the changes.

The Information and Consultation of Employees Regulations give employees rights to be informed and consulted on a regular basis about issues in the business for which they work. The requirement to inform and consult employees does not operate automatically as it is triggered either by a formal request from employees for an Information and Consultation (I&C) agreement, or by employers choosing to start the process themselves.

Under the regulations, 10 per cent of the workforce can ask an employer to set up an ‘Information and Consultation’ arrangement unless a pre-existing arrangement is in existence covering all employees; in which case it needs 40 per cent to overturn the existing arrangements.

Peter Schofield, Director, Employment and Legal Affairs at EEF, said: ‘Some 10,000 smaller companies may not yet have realised that they will have to comply with these regulations. We are alerting these companies to be aware of their new obligations from 6 April because the penalties for failing to comply can be significant — up to £75,000 – which is clearly a very large sum of money for a smaller business.

‘We are advising employers that these arrangements do not need to be onerous, and in fact there is much to be said for putting purely voluntary arrangements in place rather than waiting to see if employees call for an agreement under the regulations. Even under the regulations, employers are free to agree the scope of the arrangements with employee representatives. However, if there is failure to reach agreement, or failure to act on an employee request, default provisions are triggered which could lead to the significant penalties mentioned.’

This law is being extended on 6 April as a requirement of the associated EU Directive. It will be extended again on 6 April 2008 to companies with 50 or more employees.

Further information on the Information and Consultation of Employees Regulations is available in the EEF Guide ‘Information and Consultation: A practical guide to the law’ or from the DTI.