Consultation without disruption

Companies will have to share information with staff.

Companies will have to share information with staff.

New consultation laws giving staff the right to be consulted on major business decisions will be less disruptive for employers than critics have predicted, according to The Work Foundation.

Its report, New Dialogue - making consultation law work, examines employers' concerns about the proposed new legislation from the EC. The Department of Trade and Industry is drawing up draft legislation and consultation is expected to begin next month.

The legislation, which will make providing company information to staff and consulting them over business a requirement in companies with more than 50 staff, is being opposed by employers' organisations.

A study of employers' concerns found that they are worried staff will jeopardise share prices, competitive position or mergers and acquisitions by leaking commercially sensitive information. Employers are also concerned the legislation will slow down decision-making or open the door to negotiations with workforce representatives on business strategy.

In a response to earlier DTI proposals, The Work Foundation said that while legislation must support employers who want to take action where confidentiality is breached, its research suggests employers are unfairly stigmatising union and other employee representatives.

In interviews with personnel professionals, it found that managers were as likely as employee representatives to leak business secrets. Furthermore, if staff did betray business confidences it was mostly accidental and could be prevented by the provision of clear guidance on dealing with classified information.

According to The Work Foundation's research, employers who already consult with staff are less likely to fear that the legislation will lead to negotiations with unions or employee representatives on business strategy. Organisations less likely to consult with staff tended to blur consultation and negotiation.

The report said, "Negotiation is bargaining that requires mutual agreement for a resolution; consultation seeks opinions and even alternatives, but leaves decision-making firmly in management's hands."

The Work Foundation recommends that:

  • The DTI should minimise disruption to business by aligning the implementation dates of all employment legislation
  • The government should talk to social partners about any skills shortages among management and employee representatives and take any action to help address these gaps
  • Legislation must support the rights of employers to take action should staff or management representatives breach agreed confidentialities
  • Legislation should provide for effective sanctions for non-compliance - preferably financial

The DTI should consider piloting the new legal framework with a small number of companies to test implementation issues.

Patrick Burns, director of advocacy at The Work Foundation and co-author of the report, said, "This study suggests that new information and consultation rights will be much less disruptive to business than critics have forecast.

"Many companies already do what the legislation is likely to require. The DTI now needs to do a lot of practical piloting to help and guide employers and workforce representatives for whom consultation will be a new experience."

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