Before a transaction covered by the Regulations takes place, both the old employer and the new one must provide representatives of their workforces with certain information about the transfer. If they intend to take any steps in connection with the transfer that affects their employees, they must also consult with the representatives.
When giving its employees information about a transfer, the old employer is under a legal duty to take reasonable care to ensure that the information is accurate, especially where the employees are relying heavily on the information in order to decide whether to object to the transfer. This duty applies whether or not the employer is providing the information to meet the requirements of the Regulations.
Any employees who may be affected either by the transfer itself or by any steps connected with it are entitled to be consulted through their representatives. It is important for employers to bear in mind that a transfer and its consequences may well affect many, if not all, of its employees, even if they do not work in the part of the business that is being transferred. For example, a company that is planning to sell part of its business may need to reorganise the job duties of its remaining employees as a result. If it does, it must give information about the transfer to representatives of all its employees and consult with representatives of the employees whose work will be reorganised.
Identifying the appropriate representatives
The identity of the workforce representatives depends on whether the employer recognises a trade union for collective bargaining. If the affected employees are covered by a collective bargaining arrangement, then the employer must inform and consult the union’s representatives. If the affected employees are not covered by collective bargaining, the company has two options.
The first is to inform and consult representatives that the employees have already appointed or elected for some purpose not specifically related to business transfers. The company can take up this option only if it is clear from the context in which the representatives were appointed or elected that they have authority to be consulted about the transfer on the employees’ behalf. For example, someone appointed to a committee that only organises social events is unlikely to have the relevant authority, but someone appointed to a staff committee or a works council set up to discuss major issues affecting the business will have.
Electing representatives
The other option is for the company to inform and consult representatives who have been elected by the affected employees for the express purpose of being consulted on business transfers. If the company takes this route, it must ensure that the election meets the requirements set down in the Regulations. For example, there must be sufficient representatives to represent the interests of all the affected employees and all the affected employees must be entitled to vote. The candidates must themselves be employees who are affected by the transfer or measures that may be taken in connection with it. Further details on holding elections for employee representatives are given elsewhere ( Redundancies and business transfers ).
Information for representatives
Both the old employer and the new employer must provide their workforce representatives with certain information about the transfer. The Regulations say that the information must be provided long enough before the transfer to enable proper consultation to take place (although, as explained below, an employer is not under any duty to consult if it does not propose to take any measures in connection with the transfer).
This is the information that must be given:
Information for workplace representatives
- The fact that the transfer is to take place, when it is likely to happen and the reasons for it.
- The legal, economic and social implications of the transfer for the affected employees. This would include, for example, explaining the protection they have under the Regulations.
- Any measures that the company envisages it will be taking in connection with the transfer, or if it is not planning any measures, that fact. If the company is the old employer, it must also tell the representatives about any measures that the new employer plans to take in relation to the employees who will be transferred. The new employer must provide the old employer with the information it needs to meet this duty.
Consulting with representatives
If either the old employer or the new employer envisages that it may be taking any measures in connection with the transfer that relate to its employees, it must consult with the workforce representatives. A company is legally obliged to consult only about those measures that it is taking itself. This means that the old employer has no duty to consult about measures that the new employer proposes to take in relation to the employees who will be transferred.
In order to fulfil its duty to consult, a company should take the steps set out below:
Steps to fulfil duty to consult
- The company should enter into the consultation process with an open mind on whether its proposal might need to be revised. Although the Regulations do not require the employer to negotiate and reach agreement with the workforce representatives, they do say that the employer must enter the consultation process with a view to seeking the representatives’ agreement to the measures it is proposing.
- The company should ensure that it has provided clear information on what is being proposed and why.
- The company should give the employee representatives adequate time to consider that information and to prepare their response.
- The company should give proper consideration to the representatives’ responses, and take them into account in finalising its proposals. The Regulations require the company to reply to any responses made by the employees’ representatives, and if it rejects the representatives’ arguments, explain why.
Consultation therefore needs to be a two-way process, involving a considered exchange of views between the company and the workforce representatives, rather than a one-way process of telling the representatives what is going to happen. It is advisable for the company to keep a record of the meetings it has held with the representatives and the content of the discussions. It should also ensure that no announcements are made that indicate that an irreversible decision to implement the measures under discussion has already been made.
During the consultation, the company must allow the representatives access to the affected employees, and give them whatever other facilities and accommodation may be appropriate to enable them to carry out their role effectively. Depending on the size and resources of the company, this might include, for example, the use of a telephone, photocopier and word processor.
Exceptional circumstances defence
The Regulations acknowledge that in some exceptional circumstances it may not be reasonably practicable for a company to comply fully with its duty to consult. In that event, the company must still do what it can to comply. If, for example, the company needs to take certain steps urgently in order to secure the sale of part of the business, it may not have enough time to go through a full consultation process. However, it may still be able to keep the workforce representatives informed about the situation and hold an emergency meeting to obtain their views.
The Regulations also acknowledge that the possibility of consultation will be limited if the employer has asked its workforce to elect representatives but the election is delayed by the employees. In these circumstances, the employer will meet its legal obligations if it consults as soon as is reasonably practicable after the election has taken place. If the workforce fails to elect representatives within a reasonable time, the company must give each affected employee the information it would have given to the representatives, as set out above.
Rights of representatives
The workforce representatives involved in the information and consultation process are entitled to reasonable paid time off during working hours in order to perform their functions and to undergo relevant training. Employees are also entitled to reasonable paid time off to stand for election as representatives.
It is unlawful for a company to treat an employee unfavourably, and automatically unfair to dismiss an employee or select an employee for redundancy, on the grounds that the employee has carried out his or her role as a representative. This protection also extends to employees who stand as candidates for election or participate in an election. It applies regardless of the employee’s age or length of service with the company.