The European Information and Consultation Directive will require that staff are informed and consulted on issues including employment prospects, changes in work organisation or contractual relations, including redundancies, and transfers economic prospects for their industry.
It takes effect for firms with 150 employees or more in 2005, those with 100 or more in 2007, and those with 50 or more in 2008.
Trade and Industry Secretary Patricia Hewitt said today:
"I want these changes to lead to a 'no surprises' culture at work where employers and employees discuss common ground and find solutions to mutual problems. I want to see an end to the climate where people only hear about job losses from the media, over their breakfasts.
"We have reached this agreement with the CBI and TUC through constructive dialogue and discussion. It's exactly the spirit in which we all want new rules on information and consultation to operate in workplaces across Britain."
Digby Jones added:
"The Government has made sense of a poor piece of EU legislation. It has protected good consultation, which matters so much to employers and employees. It has also avoided overly rigid rules and damaging one-size-fits-all solutions."
However, he was scathing of the EU Directive: "Good employers already consult workers properly but business never accepted that this was an appropriate area for EU legislation. Different countries have different employment traditions. It is wrong to try and squeeze them all into one legal straightjacket."
"When will Brussels leave alone our successful, flexible labour market that has kept so many people in the UK in work?," he asked.
Under the proposal, employees will be able to request information and consultation arrangements from their employer with a petition from 10% of the workforce. There would then be a period of time for negotiating a voluntary agreement.
But where there are already arrangements in place that have been agreed with employees, the employer may ballot the workforce to see if they endorse the request for new arrangement and only if at least 40% of employees endorse the request for new arrangements would the existing ones have to be changed.
Organisations will be able to agree with their employees the information and consultation arrangements that best suit their needs and circumstances. Where no agreement is reached by negotiation, standard provisions would apply, based on the requirements in the Directive.
Enforcement of the provisions will be by a range of bodies such as the Central Arbitration Committee, Employment Tribunals and the civil courts. Sanctions for companies that break the rules will involve a mix of remedies based on specific performance orders and financial penalties of up to £75,000 depending on the size of the firm and other factors.
The 88-page consultation document, High Performing Workplaces: Informing and consulting employees, is available here
A partial Regulatory Impact Assessment is here.
Comments should be sent to [email protected] by 7 November 2003.