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Last Updated: Tuesday, 5 April, 2005, 21:35 GMT 22:35 UK
Secretive employers 'on thin Ice'
By Jane Fraser
Employment lawyer, Maclay Murray & Spens

Jane Fraser
Jane Fraser believes the system is a welcome step forward
Lawyer Jane Fraser looks at new legislation which aims to clamp down on the phenomenon of "cornflake redundancy syndrome" - a term coined to describe situations where employees first learn they have lost their jobs via the breakfast news.

From Wednesday, new Information and Consultation of Employees (Ice) regulations give all employees of companies over a certain size the right to request to be informed and consulted over a range of issues affecting their jobs.

There have been a number of high-profile cases of businesses dismissing staff in an inappropriate fashion or with a lack of prior warning.

The Abbey National and its new Spanish owner, Banco Santander, came under fire earlier this year after giving 50 Scottish information technology staff the bad news by e-mail.

Employers should not view Ice as a restriction of their right to manage their own business

With employers failing to properly handle such a sensitive and emotive issue as redundancy, many view the problem as symptomatic of wider failures in communication between management and workers.

The Ice regulations seek to address this by obliging employers with a workforce larger than 150 to consult with employees over a wide range of employment issues.

These might include the business' development activities and economic situation, as well as proposed changes in the way work is organised, or to existing terms and conditions.

Employers should not view Ice as a restriction of their right to manage their own business.

Action call

Organisations prepared to face their new responsibilities are given the freedom to formulate a system which suits their business needs.

During this planning process, employers and employees will be able to agree which specific issues will be the subject of information and consultation (I&C) at a company-wide level and even for individual business areas.

Office workers
The legislation aims to prevent staff being left in the dark

Depending on what is agreed, communication can take place directly between managers and employees, indirectly through I&C representatives, or by a combination of the two.

Anybody can be appointed as an I&C representative, with no need to hold elections.

Negotiations can take place at times which suit the business, while dispute resolution and penalties processes can, once again, be tailored.

However, because the legislation has now come into force, employers must move quickly to take advantage of this flexibility.

Any business without an agreed framework in place when employees make a request under the regulations runs the risk of having a statutory default scheme imposed.

Businesses should step back and consider the benefits of improved communications

Defined in the Ice regulations, this default scheme specifies the areas which are to be the subject of I&C, the manner in which management communicates with workers and how employee representatives are selected.

It also provides no scope for tailoring arrangements to suit the needs of different parts of the business.

Businesses with between 50 and 150 employees should also take heed of this, as they will be brought under the legislation over the course of the next three years.

Should the stiff penalties for non-compliance - a maximum fine of 75,000 - fail to persuade, businesses should step back and consider the benefits of improved communications.

Better relations with employees, improved buy-in for any changes and a more motivated, productive workforce should be key objectives for any forward-thinking organisation.

Ice represents a golden opportunity to further these goals.

Jane Fraser is a partner and head of the employment law team at Maclay Murray & Spens.


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