Timing and content
Consultation involves taking account of as well as listening to the views of employees and must therefore take place before decisions are made. Making a pretence of consulting on issues that have already been decided is unproductive and engenders suspicion and mistrust about the process amongst staff. It will be helpful to decide upon the degree of consultation first and to inform people what the decision making process will be.
Consultation does not mean that employees' views always have to be acted on since there may be good practical or financial reasons for not doing so. However, whenever employees' views are rejected the reasons for doing so should be carefully explained. Equally, where the views and ideas of employees help to improve a decision due credit and recognition should be given.
Consultation requires a free exchange of ideas and views affecting the interests of employees and the organisation. As such, almost any subject is appropriate for discussion. However, both management and unions may wish to place some limits on the range of subjects open to consultation, for example: because of trade confidences or because they are considered more appropriate for a negotiating forum. To avoid misunderstandings and the possibility of industrial relations difficulties it is advisable for management and recognised unions to agree on the issues that will be the subject of consultation.
A comprehensive list of subjects appropriate for consultation is impossible to give as this will depend on the circumstances of each organisation and how these circumstances change over time. However, whatever subjects are chosen, they need to be relevant, clearly defined and geared to the needs of the organisation and its employees.
Whatever issues are agreed upon as being appropriate for discussion it is important that they are relevant to the group of employees that will be discussing them. For instance in a larger organisation it may be inappropriate for a local, section level, consultative committee to discuss purchasing policies or marketing plans as the managers involved may not have the authority to make unilateral changes to organisational procedures.
If consultation is to be effective it is essential to avoid discussing trivialities. This is not to say that minor issues should be ignored; indeed what is minor to one person may be a major problem for another. Nevertheless, minor issues and pet grievances should not be allowed to dominate the consultation agenda.
The legal aspects of consultation
European Union Directive for informing and consulting employees
The European Union Directive for informing and consulting employees gives employees the right to be:
- informed about the business's economic situation
- informed and consulted about employment prospects, and
- informed and consulted about decisions likely to lead to substantial changes in work organisation or contractual relations, including redundancies and transfers.
Employers and employees can agree procedures which are different from those set out in the directive, and may meet their obligations by means of existing agreements on information and consultation.
Implementation is in stages - businesses with 150 or more employees (March 2005), businesses with 100 or more employees (2007) and businesses with 50 or more employees (2008). The Directive does not apply to those businesses with fewer than 50 employees.
Health and safety
The law requires that employers must consult with employees on health and safety at work matters(9). Where an employee recognises a trade union which has appointed, or is about to appoint, safety representatives under the Safety Representatives and Safety Committees Regulations 1977, then the employer must consult those safety representatives on matters affecting the group or groups of employees they represent.
Any employees not in groups covered by trade union safety representatives must be consulted by their employer, under the Health and Safety (Consultation with Employees) Regulations 1996. The employer can choose to consult directly with employees or through elected representatives. If the employer decides to consult employees through elected representatives, then employees will have to elect one or more people to represent them. Where there are existing consultation arrangements which satisfy the law there is no requirement to change them.
The HSE website has full details of legal requirements for employers to consult with their workforce on health and safety.
The Trade Union and Labour Relations (Consolidation) Act 1992, as amended by the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1995(10), requires employers to consult about redundancies in circumstances where it is proposed to dismiss 20 or more employees at one establishment over a period of 90 days or less. Under the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1999, consultation has to be with a trade union where one is recognised, or with other elected representatives of the affected employees where no trade union is recognised. (Employers continue to have a duty to act fairly and reasonably in handling redundancies and informing and consulting affected employees individually, regardless of the number of dismissals)(11). The consultation must take place with a view to reaching agreement with the appropriate representatives and must include discussion about ways of avoiding the redundancies, reducing the numbers to be dismissed and mitigating the consequences of any redundancies. Consultation should be completed before any redundancy notices are issued.
The Transfer of Undertakings (Protection of Employment) Regulations 1981, as amended by the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1995 and 1999(12), require employers to consult representatives of an independent trade union where one is recognised or other elected representatives of the affected employees where there is no recognised trade union, where there is to be a transfer of a business to which the regulations apply. The consultation must be undertaken by the employer with a view to reaching agreement with appropriate representatives.
Companies must have a European Works Council (EWC) or an equivalent procedure. The purpose of the EWC is to provide 'transitional information and consultation' for their entire workforce. The provisions of the EWC Directive came into force in January 2000(13). Companies must set up a 'special negotiating body' under the provisions of the Directive.
The Social Security Pensions Act 1975 requires employers to consult with independent recognised trade unions on certain matters in relation to the contracting out of the state scheme of an occupational pension scheme.
In addition to having a statutory duty to consult in certain circumstances, organisations employing more than 250 people (calculated according to the legislation) are required by the Companies Act 1985 (as amended by the Companies Act 1989) to include a statement in their Director's report describing the action taken in the previous financial year to introduce, maintain or develop arrangements in the following areas:
- providing employees systematically with information on matters of concern to them as employees.
- consulting employees or their representatives on a regular basis so that the views of employees can be taken into account in making decisions which are likely to affect their interests.
- encouraging the involvement of employees in the company's performance through an employee share scheme or some other means.
- achieving a common awareness on the part of all employees of the financial and economic factors affecting the performance of the company.
The Occupational and Personal Pension Schemes Regulations 2006 mean employers are obliged by law to inform and consult employee representatives about certain planned changes to pensions. For further information visit the Department for Work and Pensions.
Methods of consultation
Consultation methods will, of necessity, vary from organisation to organisation and there is no single arrangement that will suit all working environments. It is therefore important for organisations to choose carefully the sort of consultation procedure(s) that will best suit their own structure and business culture. Factors that will influence this choice include:
- size and structure
- degree of centralisation or decentralisation
- industrial relations climate
- management style
- the issues to be discussed
- whether trade unions are recognised and if so their structure.
Many organisations are increasingly adopting consultation as an integral part of their day-to-day management processes and, as a result, are consulting directly with employees as well as indirectly through employee representatives. Direct consultation can take a variety of forms ranging from informal discussions with individual members of staff to more formalised group meetings or seminars.
Indirect consultation through employee representatives is best carried out in a formally constituted forum such as a joint consultative committee or joint working party.
Joint consultative committees
Joint consultative committees (JCC), or works councils as they are sometimes known, have long been used as a method of employee consultation. The committees are made up of managers and employee representatives who come together on a regular basis to discuss issues of mutual concern.
When setting up a JCC a constitution should be agreed with employee representatives, including where appropriate recognised trade unions, which lays down the rules and procedures that will govern the committee's operation. Agreeing a constitution at the beginning can help overcome subsequent problems and misunderstandings.
A checklist of issues to be covered in a JCC constitution is contained in Appendix 1.
There are a number of issues that need to be considered and agreed between the parties when establishing a JCC; these include:
- size and composition of the committee
- organisation of committee meetings
- subjects to be discussed
- facilities for committee members
- arrangements for reporting back.
Size and composition
The number of members a JCC should have will vary depending on the size of organisation and the constituency to be covered. However, as a general rule the size of the committee should be kept as small as possible consistent with ensuring that all significant employee groups are represented. Extra members can always be co-opted to deal with specific matters or problems. As JCCs are not involved in decision taking it is not necessary to have equal numbers of managers and employee representatives; indeed, it is often helpful if there are more employees than managers as this makes the point that the committee is not employer dominated.
It is usual for management representatives on JCCs to be nominated as this helps reinforce the point that they are on the committee as part of the management team. In order to demonstrate commitment to consultation it is essential that a senior manager with authority and standing in the organisation is a member of the JCC and is present at all meetings. Other management representatives should be drawn from a variety of functions and grades within the organisation.
While continuity of membership among management representatives is an advantage it can be helpful for managers to be replaced periodically in order to allow their colleagues a chance to gain experience of participating in a consultation committee.
Employee representatives on the committee should be elected by the employees they will represent. Where an organisation has an established trade union structure it is sensible to invite one or more of the senior shop stewards to sit on the committee. They have already been elected by their fellow employees and ignoring their status could undermine the existing framework for joint union/management regulation.
This is not to suggest that only shop stewards ought to attend JCC meetings. Employee representatives may be elected on a constituency basis irrespective of their trade union role or membership. The mixing of union and non-union representatives on the same consultative committee will clearly be a matter of concern to recognised trade unions and, to help allay any fears they might have, it is advisable for managers to discuss the arrangement with union representatives before it is introduced. An assurance that the consultative process will not detract from the powers or decisions of the recognised negotiating body may go some way to allaying union fears. However, the solution will depend very much on the relationship between management and trade union representatives and their respective commitment to the consultation process.
Meetings and their organisation
Meetings of the consultative committee should be held regularly - once a month is usually sufficient for most organisations. In addition to regular meetings it is also helpful to provide for ad hoc meetings to be held as and when a particular need arises.
Every meeting should have as its focus a well prepared agenda and all members of the committee should be given the opportunity of contributing items to the agenda before it is circulated. The agenda should be sent out at least five working days in advance of the meeting so that representatives have an opportunity of consulting with their constituents prior to the committee meeting.
As with all meetings, the JCC needs to be well chaired if it is to run efficiently. The person selected to take the chair should ensure that all parties have an opportunity to express their opinion and that discussion is not allowed to wander from the subject under consideration. The chairperson should also allocate tasks to particular people to ensure that the views of the committee are taken into account by the decision makers.
A poor chairperson will not only lead to disorganised meetings but may, in some instances, bring the whole concept of joint consultation into disrepute. Getting the right person to chair the meeting is therefore crucial. In some organisations the chair is taken by a senior manager who has experience of chairing meetings. While this arrangement can help to emphasise the organisation's commitment to the concept of consultation, some may see it as giving management too much control over the JCC. A number of JCCs therefore rotate the position of chairperson since this is seen as a more open procedure to adopt.
In addition to a chairperson it is also helpful to appoint someone to act as secretary to the committee. The secretary's duties will include:
- gathering items and papers for the agenda
- circulating meeting notices and agendas
- taking and circulating meeting minutes
- dealing with any correspondence concerning the committee
- taking action on matters as instructed by the committee.
Whether the secretary is drawn from management or employees is a matter for discussion when setting up the committee. If agreement cannot be reached, rotating the role of secretary or having joint secretaries are possible alternative options.
One of the secretary's most important roles is keeping minutes of the committee's proceedings. Minutes should:
- be an accurate record of the main points raised and decisions reached
- indicate who is responsible for taking action on particular topics
- be distributed as soon as possible to all committee members and senior managers; copies should also be brought to the attention of all staff either by issuing them individually or putting a copy on a noticeboard
- be used by the chairperson to monitor progress on any action points decided by the committee.
Subjects to be discussed
To avoid misunderstandings it is important to agree at the outset which subjects are appropriate for consideration in the JCC and which are best dealt with in a negotiating or other appropriate forum (for example: a safety committee). The following list contains some of the issues most commonly discussed in consultation committees:
- working conditions
- new ways of working
- output and quality
- health and safety
- new equipment
- staffing levels
Facilities for committee members
It is important that employee representatives know exactly how much time they will be allowed away from their normal work to undertake their duties as a committee member and what facilities they are entitled to use. Employee representatives should also be reassured that they will not lose pay as a result of attending committee meetings or of carrying out other activities associated with committee meetings. Without adequate, paid time away from normal duties there is a danger that representatives will only be able to put forward a personal view rather than the view of their constituents, thus undermining the effectiveness of the consultation process.
If joint consultation is to be meaningful it is essential that the deliberations of the committee are reported back to employees as soon as possible. Any delay in reporting back is not only likely to lead to frustration but will also allow scope for rumours to develop in the place of hard information. Reporting what happened at committee meetings is usually the responsibility of employee representatives but management should also help to ensure that the outcome of consultation meetings is spread quickly and accurately among employees. Methods that might be used for reporting back include:
- briefing groups
- circulation of committee minutes.
Joint Working Parties
Joint Working Parties (JWPs) are similar in make-up to joint consultative committees but they are usually set up to consider and suggest ways of resolving specific issues affecting the organisation, for instance a high rate of labour turnover or problems with the pay system. The emphasis in JWPs is on managers and employee representatives working together to understand issues and overcome common problems in a non-confrontational way.
Once recommendations have been made by the JWP it is normally disbanded and further work is left to other consultative bodies such as JCCs and to the organisation's usual negotiating forum.
The advantages of the JWP approach to consultation are that the format:
- promotes a process of joint problem solving in a non-negotiating forum which can help ensure that:
- eventual solutions are acceptable to those concerned
- there is a prospect of any proposals being acceptable in the negotiating forum
- allows the parties to concentrate on a specific issue
- establishes the commitment of the parties through the process of joint involvement.
The size of the JWP depends on the organisation concerned and the subject to be discussed. As with JCCs, it is important to keep the working party as small as possible to ensure that each member can become fully involved in the discussions. Between four and eight members is the normal size for a JWP.
If the recommendations of the JWP are to carry any weight it is important that its members are drawn from a representative cross section of the groups directly concerned with the issues under discussion. It is also important that the membership reflects the race and gender composition of the organisation's employees.
When running a JWP it is important to ensure that a reasonable momentum is maintained. Meetings should be held frequently. The exact frequency will depend on the availability of members but weekly or fortnightly meetings can greatly facilitate progress.
In certain circumstances the effectiveness of a JWP can be enhanced by the presence of an independent, third party, facilitator. By virtue of having no direct interest in the problem under discussion an independent facilitator can often help the parties work together more productively and may also be able to offer fresh ideas on how to tackle problems.