Draft DTI guidance on the information and consultation regulations
Comments from ACCA
18 October 2004
Association of Chartered Certified Accountants (ACCA) is pleased to comment on the above consultation. Our interest in this matter derives primarily from the financial and administrative obligations which the new rules will place on employers.
We respond in the following paragraphs to the specific consultation questions posed by the Department.
(i) Is the structure of the guidance helpful? Does it make the legislation and process sufficiently clear?
We agree that a concise summary of the provisions of the Regulations, supported by an appendix which contains definitions of the main terms and necessary elaboration on the more important issues, is a helpful approach to take. But we consider that it would be helpful to readers to include, at the outset, a short summary of the provisions of the Regulations, amounting only to a list of bullet points. This list should make clear, inter alia , that i) the requirement to set in train the I&C arrangements is not automatic (but is dependant on action being initiated either by the employer itself or by the workforce) and ii) the new rules are to be brought into effect in stages.
As regards whether the draft makes the legislation sufficiently clear, the text is currently unhelpful to the extent that it does not give much practical assistance to employers in a number of crucial areas. These areas include the definitions of ¿employee', ¿undertaking' and, especially, ¿economic activity' and ¿consultation'. Even if it is not possible to elaborate further on the general UK understandings of the first two named terms, the draft should offer some assistance to readers on ¿economic activity', since no employer will have any obligations under the Regulations unless it is conducting economic activity. And the precise nature of the process of consultation is again highly significant since it clearly entails something more than just simply providing the workforce representatives with information. Given that the employer's compliance obligations under the obligations are, in our view, potentially very onerous, clarity of such matters in the guidance is highly desirable.
On matters of detail, the list of organisations which qualify as ¿undertakings' should include the limited liability partnership. If, as we understand will be the case, the European Company is to be excluded from the scope of the Regulations, this should be stated. Also, it should be made clear that ¿partners' in ¿partnerships and ¿members' in LLPs are not to be deemed to be ¿employees' for the purposes of the I&C rules unless the individuals concerned have separate contracts of employment.
Also with regard to the heading under review, the draft does not appear to make clear what is the intended status of the guidance. This needs to be stated at the outset.
(ii) Is the approach of keeping the main text relatively short, with box links to more details, useful? Does it strike the right balance?
We agree with this as a general approach to the drafting of the guidance. But we feel that the content of the first section of the draft, at pages 3-28, is too long as it stands. For example, since definitions of ¿undertaking' et al are offered in the second part of the document, we do not see that there is a need to go into much detail when these concepts are introduced at paragraphs 6 et seq of the first section. The main, first section of the draft could, therefore, usefully be streamlined so as to enhance readability and to avoid duplication.
(iii) Is the overall length about right, too long or too short?
The draft runs to over 80 pages: we feel this is too long to hold employers' attention. The content could usefully be slimmed down in several places. For example, we query the need for the detailed coverage of the contents of pre-existing agreements on pages 38 and 39.
(iv) Other aspects
The decision tree on page 8 needs to be amended to make clear that it is not necessarily the case that an employer who has a pre-existing agreement with staff needs to hold a ballot on receipt of an employee request.
The draft makes clear that it is the responsibility of the employer under the Regulations to organise the appointment of both the negotiating body and the consequent I&C body. The draft needs to address what the implications for the employer are where a ballot is validly organised for either of these appointments and the workforce fails to appoint the necessary members.
In paragraph 48, the draft states that, while there are no specific obligations on I&C representatives to report back to the employees they represent, it would be ¿good practice' to do so. In our view, this is statement of the obvious and should even be strengthened, while at the same time ensuring that representatives respect their obligations of confidentiality.