Introduction: outline of the information and consultation regulations
The Information and Consultation of Employees Regulations (ICE) came into force in 2004 as the result of the need to implement the Information and Consultation Directive 2002 and are now well established. The main rationale for the legislation was to ensure that employers consulted with their employees about their business, its future prospects and any decisions that may affect them. Prior to this the only obligation on employers to consult in the UK was regarding proposed collective redundancies or business transfers.
This guide will lead you through the main provisions of the ICE Regulations and their application in the workplace. Many employers will already have in place their own arrangements for consultation and this guide will also examine whether those arrangements would qualify as a 'pre-existing agreement' to consult and, if not, how to ensure they meet the statutory requirements. More detailed advice on any aspect of the Regulations can be obtained from your HR Rely Advisor.
Under the ICE Regulations any organisation with 50 employees or more have an obligation to provide an information and consultation mechanism if and when they receive a valid request. This guide will look at how the process works for both employees and employers.
Employer responses
What are the options open to employers who are covered by the ICE Regulations but who don’t have an agreement in place?
There is no obligation on an employer to set up an information and consultation mechanism and some may wish to wait and see if employees put in a request before taking action. This may be the case where an employer does not detect any interest in participating in a consultation process or doesn’t believe the employees will make a request. This stance does rely on the employer being able to assess the views of the employees and there is a risk that the employer will be caught unawares by a surprise request.
Doing nothing may be more advisable if a major restructure is planned and it is not worthwhile starting to negotiate a new agreement when the new structure may be very different.
Pre-empting a request
Employers may wish to put steps in place to either prevent a request being made or to ensure they are prepared to deal with a request if one is received. In order to do this the employer should look at any existing arrangements they have in place for the communication of information and consultation. Some arrangements may be part of an existing trade union relationship. If the employer wants to avoid a request they should seek to understand what employees need in terms of communication mechanisms and ensure that what they have is effective, for example, informal briefings, suggestion schemes, newsletters etc.
Employers would also be advised to ensure their managers are prepared in the event a request is received. Have they been trained to deal with a request properly and would they understand and act on their obligations appropriately?
For those organisations that decide to enter into an information and consultation agreement on a voluntary basis they have the advantage of being able to claim a pre-existing agreement which may serve to stave off a request. It also allows the employer to determine a more flexible arrangement in line with its business needs rather than being forced to accept the fall-back provisions. However if the employer has made a notification to enter into a negotiated agreement which fails they may run the risk of having to adopt the fall-back provisions in any event.
This guidance note has been prepared as a general guide only. It is not a substitute for professional advice which takes account of your specific circumstances and any changes in the law and practice; at the time of the preparation of this note various changes to the relevant provisions may be pending. The subjects covered constantly change and develop. No responsibility can be accepted by the firm or the author for any loss occasioned by any person acting or refraining from acting on the basis of this note. The copyright in this guidance note is owned by Weightmans LLP.
Definitions and scope of the ICE regulations
Who is covered by the regulations?
The Regulations apply to any undertaking employing 50 or more employees whose principal place of work is in Great Britain. Similar Regulations are in place which cover employees in Northern Ireland. An undertaking for these purposes is a private or public organisation which carries out a commercial activity.
When calculating how many employees are in an undertaking an average is taken over the previous 12 months prior to a request being received (or the number of months the organisation has been in existence if less than 12 months). Only employees are counted and other types of workers, for example agency workers and sub-contractors, are excluded.
Part time employees may, but are not obliged to be, counted as “half” an employee if they work for less than 75 hours per month.
Employees or their representatives have the right to request data to enable them to ascertain the number of employees in the undertaking to assist them with making a request. If the employer fails to provide the data within one month a complaint may be made to the Central Arbitration Committee (CAC).
How is a valid request made?
The requirement to inform and consult under the ICE Regulations is not automatically triggered by having a certain number of employees but is only triggered by an employer receiving a valid request. Valid requests must be
- Made by at least 2% of employees (subject to a minimum number of 15 and maximum of 2,500 employees) and may be a single request or several requests over a period of six months. The threshold was reduced from 10% of employees to 2%, on 6 April 2020, following the government's Review of Modern Working Practices (the Taylor Review).
- In writing and specify the names of the employees making the request and the date it was sent
- Sent to the organisation’s head office or to the CAC
An employer may initiate the process of setting up an information and consultation mechanism without waiting for a valid request. At any time an employer may issue written notification they are to start a negotiation process. The notification must be in writing and state that it is being given for the purposes of the ICE Regulations and give the date of issue. It must be communicated to all employees as far as reasonably practicable to do so.
Providing an employer does not have a valid pre-existing agreement to inform and consult, they must act upon a valid request as soon as reasonably practical. This would entail making arrangements for the employees to elect or appoint representatives for the employer to negotiate with for the purpose of drawing up an information and consultation agreement. The employer must then write to all employees to let them know the identity of the representatives who are negotiating on their behalf. The employer should then invite the representatives to enter into negotiations with a view to reaching an agreement.
Once the representatives are in place the employer has 6 months in which to negotiate an agreement which must be approved by the either the employees or the elected representatives. The period of six months starts from 3 months after the request is received. If the parties fail to reach agreement within this time frame the fall-back provisions for an agreement will apply.
Electing representatives
No specific requirements are laid down in the ICE Regulations about the election of employee representatives but all employees must be entitled to participate in the election. Employers should ensure the process used is fair, for example, by conducting a secret ballot.
Pre-existing agreements
If the employer has in place information and consultation arrangements which satisfy the requirements set out in the ICE Regulations they need not make any changes. It is important that the arrangements have been agreed with employees and that the employer can demonstrate this as otherwise a valid request from 2% of the workforce will still trigger the need to conduct negotiations.
However, if a valid pre-existing agreement is in place but the employer still receives a request from at least 2% of the employees (and no more than 40%) the employer should conduct a ballot to see if the workforce endorses the request. If more than 40% of employees vote in favour of the new request than a new agreement must be negotiated. If the employees do not endorse the new request they cannot make another request for 3 years.
If the employer has a valid pre-existing agreement and receives a request from more than 40% of employees they have no choice but to initiate the negotiation of a new agreement.
What constitutes a valid pre-existing agreement?
It must be:
- In writing
- Cover all employees in the undertaking
- Be approved by the employees
- Explain how the employer will give information and seek views on this information from employees or their representatives
It is important that an employer can demonstrate they have the approval of employees for the arrangements they have in place by, for example,
- conducting a ballot and obtaining a majority vote; or
- by gathering signatures of endorsement from a majority of employees; or
- by having evidence of a signed agreement with representatives elected on behalf of the employees (providing they are elected properly and represent a majority of the workforce).
Pre-existing agreements do not have to conform to any particular framework and can determine their own timing, frequency, method and subject matter. However the fall-back procedure in the ICE Regulations can be used by employers as a reference point for drafting a typical agreement.
Employers should note that a European Works Council will not qualify as a pre-existing agreement for the purposes of the ICE Regulations nor will an existing collective bargaining arrangement be sufficient to meet the requirements of the regulations if not all employees are covered.
Negotiating a new agreement
Once an employer has received a valid request there is a 6 month time frame in which to negotiate a new agreement and within this period both parties are free to reach an agreement which suits their specific requirements. The agreement must however set out the circumstances in which the employer is obliged to inform and consult. When finalised, the agreement must be in writing and dated. It must be signed by the employer and signed by the employee representatives (a majority will suffice) or approved by the employees (at least 50%). If the subject matter for consultation includes discussion on the employment situation in the undertaking this must include information regarding the use of agency workers if applicable.
What should be included in the new agreement?
The fall back procedure provides a useful starting point for considering the content of a new agreement. Typically the following may be included
Who is covered – depending on the nature of the undertaking it may that arrangements cover all employees or different agreements cover different types of employees in different locations. Consideration may also have to be given to agreements where there is an overlap with trade union bodies which are already in place.
Representatives – it is suggested that one representative per 50 employees is usually appropriate but this will depend on the nature of the organisation. Representatives can cover particular departments, job types, job grades or locations but a minimum of 2 and a maximum of 25 is probably advisable. Consideration also needs to be given to how representatives will be elected, who will be eligible for election and how long they will serve for.
Consultation process – this should ideally be done by way of face to face meetings particularly for issues which require discussion, although online forums such as Zoom and Microsoft Teams may also be acceptable. Other forms of sharing information and seeking feedback may be used to supplement this such as using company intranet systems, briefings, employee surveys or other communication mechanisms. Consideration should be given to the frequency and timing of consultation. Whatever is decided, it is important that consultation is held on a regular and predictable basis although having the provision for ad hoc meetings to be requested by either party where necessary is also advisable.
Agenda items – subject matter can be listed and agreed between the employer and representatives and, if appropriate, the employer may wish to list items that they do not consider appropriate to include in the process. Consideration needs to be given to items which are already covered by other processes, such as an existing health and safety committee or an existing negotiating body with a recognised trade union. The parties need to think about how the new information and consultation body will fit with existing mechanisms and avoid overlap or duplication. Types of information which may be covered can include:
- Terms and conditions of employment
- Workplace issues – environment and management such as training, employment, facilities etc
- Organisational information – objectives, performance, plans, progress, policies
Rights of representatives
Representatives who are appointed as the result of a negotiated agreement or under the fall back procedure are entitled to protection under the ICE Regulations. Specifically they are protected against suffering a detriment or being dismissed in relation to them taking part in a ballot, being a candidate for election or acting as a representative and carrying out their duties as a representative. Reasonable paid time off during normal working hours must be given to them to enable them to carry out their duties. Non compliance is dealt with by application to an Employment Tribunal.
Maintaining confidentiality
The employer is entitled to determine what information it deems to be confidential and how such information will be handled. This may vary depending on the nature of the employer’s business but some items such as pricing are always considered as sensitive. If confidential information is to be shared with representatives the employer can specify that this is subject to an obligation of confidentiality and that disciplinary sanctions may be applied this is breached.
Whether a negotiated agreement is in place or the fall back provisions apply, an employer can require representatives not to pass on to a third party any document issued to them in the role as representatives. The representative under the provisions of the ICE Regulations has a statutory obligation of confidentiality in relation to the disclosure of documents to a third party and if they are in breach of this may lose their protection (see section on Rights of Representatives).
If a representative wishes to query the confidentiality of information passed to them they may apply to the CAC for a declaration as to whether the requirement of confidentiality is reasonable. The CAC may decide that the information would not harm the legitimate interests of the undertaking and would then issue a declaration to this effect.
An employer is entitled to withhold information from representatives if provision of the information would seriously harm or be prejudicial to the organisation. Disputes about the justification for maintaining confidentiality can be referred to the CAC which has the power to order the employer to release the information if they do not agree that it would be harmful or prejudicial.
The ICE Regulations do not cover confidentiality under pre-existing agreements which must be a matter for agreement between the parties.
How long does the agreement last?
The parties may agree the duration of the agreement and the date or circumstances on which the agreement may be reviewed. Events such as company re-structuring can be a catalyst for change and increases or decreases in employee numbers may also trigger a review of the number of appropriate representatives.
Finally the agreement should state how any disputes between the parties may be resolved and whether the agreement is to be deemed to be legally enforceable. However, most employers will opt for the agreement to be “binding in honour only”.
What if the parties fail to reach agreement?
If attempts to reach a negotiated agreement fail within the 6 month period, or if an employer has failed to instigate a negotiation process when they have received a valid request, the standard information and consultation provisions (fall-back provisions) within the ICE Regulations will apply by default. In these circumstances a ballot must be conducted to elect representatives for an information and consultation committee. At least one representative must be elected for every 50 employees, for example, a workforce of 325 employees would be eligible for 7 representatives (25 counting as the last 50). All employees employed on the date the ballot takes place are eligible to vote and the ballot must be supervised by an appointed “ballot supervisor”.
The information and consultation committee will then be subject to the fall-back procedure which is as follows:
- Information (category A in the regulations) must be provided on developments in the undertaking including its activities and economic situation. Examples of this might include the following:
- The launch of new products, significant changes to products or services and developments in new technology, production processes or ways of working;
- Takeovers and mergers and reorganisation;
- Changes to the undertaking’s objectives, vision or mission statement and change in senior management;
- Financial information based on the accounts and competitive environment including trading conditions and demand within the relevant sector.
- Information (category B in the regulations) should be provided on developments and potential threats (e.g., likely redundancies) in the employment situation including the use of agency workers. Examples of this might include the following;
- Present and future levels of employment;
- Distribution of employees and possible re-organisations, re-deployments or other restructurings and transfers
- Information must be provided about potential substantial changes such as large scale redundancies and transfers (category C in the regulations). Examples of this might include:
- Changes in work organisation covering work distribution, planned redundancies, changes in policy or hours, work patterns;
- Introduction of new technology, equipment and associated training;
- Changes in contractual relations either via a transfer due to substantial changes to terms and conditions (other than pay);
- Changes to pensions, disciplinary or grievance procedures.
- Category C consultation on redundancies and transfers must be conducted with a view to reaching agreement. Consultation on category B can be conducted as an exchange of views and establishment of a dialogue. Category A can be covered by providing information only. Representatives must be given information in good time to allow them to study and prepare for the consultation process. The timing, method and content of the consultation process must be appropriate and the representatives be given the opportunity to meet with the correct level of management according to the subjects under discussion.
Complaints and enforcement
If an employer fails to comply with its obligations under the ICE Regulations the representatives (or an employee if none have been appointed) may complain to the CAC which can issue an order requiring the employer to comply. If a complaint is upheld by the CAC the representatives may also complain to the Employment Appeal Tribunal which has the power to issue a penalty notice and a fine of up to £75,000. Employers should be wary of trying to rely on a pre-existing agreement which is not a valid one and ignoring requests for a new negotiated agreement. In a recent EAT case, a company tried to rely on an invalid agreement and was fined £55,000.
For both negotiated agreements and those formed under the fall-back procedure both parties are under a duty to work together in a spirit of co-operation and with due regard to each others’ rights and obligations.
Statutory consultation requirements
Employers are already under a statutory obligation to consult regarding redundancies affecting 20 or more employees and regarding potential business transfers. Where an employer has an information and consultation agreement (either a negotiated one or one under the fall-back procedure) they are not obliged to consult twice over the same issue (for example with a recognised trade union and under the ICE Regulations). Similarly if an employer has an obligation to consult about changes to an occupational pension scheme they do not have to use their information and consultation mechanism as long as they are consulting under the Occupational and Personal Pension Scheme (Consultation by Employers and Miscellaneous Amendment) Regulations 2006. If this is the case the employer must give written notice to the representatives that it will be consulting under these Regulations.