Press release

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UK’s “employer-friendly” consultation laws under threat from Brussels

UK laws requiring employers to consult their employees about business decisions are under threat from the European Commission in Brussels for being too employer-friendly.

In a report issued in March, the Commission says the requirements for “pre-existing agreements” in the UK ICE Regulations “do not always fit in with the provisions laid down in the Directive” they are supposed to be implementing. It cites the lack of any rules around the time frame for consulting employees, and the fact that agreements do not have to provide for “consultation” but merely for “seeking the view of employees”. Most worrying for employers, the report also questions the fact that the Regulations do not make agreements legally enforceable.

Other countries come in for criticism in the way they have implemented the European Directive – notably Ireland which copied the UK laws quite closely.

The Commission says it will be examining these points more closely in co-operation with the countries concerned, and if necessary, will launch legal proceedings against them.

Employers who set up a consultation committee under the ICE Regulations may well find they have to adapt it to comply with changes to the Regulations ordered by the EU Commission. They may also find that their consultation procedures become legally enforceable at the Central Arbitration Committee (CAC), opening them up to the possibility of fines for not consulting properly.

Philip Sack, Director of Policy at employee consultation specialists ESG said:

“This is unwelcome news for employers. Many have set up new consultation arrangements that made use of the considerable flexibility given by the ICE Regulations. They may well have to look again at their arrangements to see if they comply with the law.

The Government always knew it was pushing at the boundaries of what the EU Directive allows. It seems the European Commission believes the UK has overstepped the mark.

If “pre-existing agreements” become enforceable at the CAC, employers will be looking for concessions from the Government in the form of a significant reduction in the fine payable for breaches of the Regulations. The Commission report reveals that the current maximum - £75,000 - is considerably higher than in any other Member State.”

These developments come just as the rules are about to be extended to cover smaller UK businesses with as few as 50 employees.