Factual background
Amicus had complained to the CAC that Macmillan had failed to hold a ballot to elect employee information and consultation representatives under the Information & Consultation of Employees Regulations 2004 (ICE Regulations).
This was against a history of previous complaints made about Macmillan’s failure to comply with its obligations under the ICE Regulations (failure to give full information about the number of employees employed at different sites and a failure to give information about the number of employees – both upheld by the CAC).
In the CAC’s most recent ruling in March 2007, the CAC found that there had indeed been a failure to hold a ballot to elect employee information and consultation representatives under the ICE Regulations. It made a declaration and order to this effect.
Amount of the penalty
Where an order is made by the CAC about the operation of a negotiated agreement or of the standard information and consultation provisions, the maximum penalty which the EAT can award is £75,000. In this particular case, it awarded £55,000. In fixing that sum, the EAT wished to “deter others from adopting what can only be described as the wholly cavalier attitude to their obligations that has been demonstrated by [Macmillan].” The EAT concluded that it was not the most serious breach that could be envisaged but was “nonetheless a very grave breach affecting many employees”.
When setting the amount of any penalty, the EAT must take into account:
-
the gravity of the failure;
-
the period of time over which the failure occurred;
-
the reason for the failure;
-
the number of employees affected by the failure; and
-
the number of employees employed by the undertaking.
In this case, the EAT considered that:
-
The failure to hold a ballot to elect employee information and consultation representatives was significant. It must have been plain, reading the legislation, that the relevant provisions under the ICE Regulations were being ignored at almost every stage. The failure was compounded by the fact that there had been earlier occasions when Macmillan was found to be in breach of its obligation to provide information. It was not a technical or inadvertent breach and Macmillan had the necessary resources and access to the relevant expertise.
The period of time taken to deal with the request and ballot was an "aggravation of the breach" and represented an "unacceptable dragging of feet". Six months after the CAC's order, no ballot has been held and no arrangements put in place to extend information and consultation arrangements.
No adequate reasons had been given for Macmillan's failure to comply with its obligations under the ICE Regulations. The most generous interpretation of its response was that it had consultation arrangements in place for many years and thought these would suffice. But "a moment’s consideration" of the ICE Regulations would have demonstrated that they would not.
In terms of number of affected employees - adequate information and consultation arrangements, if implemented, would cover over 1350 employees and apply to all Macmillan's workforce.
Comment
This case is noteworthy in that it is the first time the EAT has awarded a penalty for a breach of the ICE Regulations and illustrates its approach in deciding on an appropriate penalty.
Any employers in receipt of a valid employee request under the ICE Regulations should read both the earlier CAC and the more recent EAT decision, which together provide a useful overview of the operation of the Regulations and valuable lessons as to the various ways in which Macmillan failed to comply with its obligations.
The ICE Regulations currently apply to employers with at least 100 employees. From April 2008, they will affect even more employers - those with at least 50 employees. The EAT emphasised in its judgment that “employers must recognise that these are important rights conferred on workers. The provisions must be complied with.”