26th May 2009
Willy Coupar looks at the future for workplace consultation, and asks whether the ICE regulations are the best hope for employee voice.
It is five years since the Information and Consultation directive (ICE) first came into force. The evidence for its success is at best patchy according to IPA advisers and employee relations researchers. The CIPD found recently that less than 40 per cent of respondents to a recent poll had done anything about implementing the directive. IRRU at Warwick confirmed similar findings from their in depth work on behalf of BERR. The smaller the company the less likely it is that they are even aware of the duty to inform and consult employees. Despite all the hopes invested in it, the directive seems destined to gather dust on the bottom shelf.
As the programme to extend coverage of the ICE directive to smaller companies – it now covers all employers with over 50 staff – is rolled out the evidence of take up has got progressively weaker. When the regulations were first put in place, a lot of IPA member companies asked for help training new representatives or for advice in refreshing existing consultation bodies. As coverage was extended, interest dwindled and attempts to work with Business Links to raise awareness amongst smaller employers was both time consuming and unproductive.
“We have continued to do a lot of work on consultative forums but it is almost always with bigger organisations. People who are committed to making it work, and there are a surprising number of them out there, keep on coming back to us,“ said Training Director Derek Luckhurst.
Increasingly these businesses want real evidence that their forums are delivering something. As a result IPA work is moving away from basic training programmes on ‘what you need to do to comply with the law’ to much more focused work on delivering the added value which clients want from the investment in I&C.
New issues are cropping up as forums become more established, like time off for representatives. “Much of the best practice on the ground, especially in companies who are operating on greenfield sites, has included provision for seconded representatives who do the role full time,” says Derek. “However, we also know that many employers are very wary of allowing anything but the most limited time off to carry out this role”, he added. At the same time two new challenges are coming to the forefront; consulting on redundancy and the role of information and consultation in employee engagement.
I&C and Redundancy
Redundancy consultation goes back a long way, before the ICE regulations. Its coverage was extended to the whole workforce in the 1990s. Along with Health and Safety, redundancy is probably the biggest issue on which organisations must consult.
In practice, this consultation is almost always a conversation about how the redundancies are to be implemented. Attempts by unions to use the courts to force employers to come to the table earlier, and consult about the reasons for a particular closure or to consider other options, have had only very limited success. The best which any workforce can expect is usually a reasoned explanation about why a particular course of action is being followed. Cases like British Mining appear to be redefining the law in this area, but have proved inconclusive.
As the recession really starts to bite job cuts are daily news. Every day ACAS advisers are receiving calls from employers wanting to know how they need to go about handling redundancies. Senior policy analyst Rachel Suff notes that redundancy now accounts for 36 per cent of the 1.3 million annual calls to the ACAS help lines.
“When people come to ACAS to talk about job cuts they are usually quite far down the line. They want to know the mechanics for shedding jobs and staying within the law. Early consultation with staff or their representatives to explore alternative solutions happens, but not very often,” she added.
IPA director Nita Clarke notes that redundancy ought to be an area where organisations who do consultation well and have worked to construct a good culture of regular and substantial dialogue are in a better place to face the challenge of a big redundancy programme than others.
“Two things should happen,” she says. “Firstly there should be no surprises. Secondly there should, by now, have been nine months of tough talking between the company and its reps around what we at the IPA call the “ What if?” question. If you did not start doing that last July when the credit crunch started you need to ask yourselves just what you are doing in your consultation body.”
On the ground it is less clear that consultation bodies are rising to this challenge. I was recently with a group who were becoming aware of the possibility of a 40 per cent cut back in investment in their business. The consultative body was not even talking about it. Weeks later it happened.
Redundancy will also be a test of the Options Based Consultation model and a real opportunity to put it fully into practice. Key workplace observers like Mike Emmott of the CIPD say that businesses appear to be trying to take a more flexible approach to how they cut back in face of the recession. Employers are aware that there is a big downside if they mishandle redundancies in the present climate.
“If you recognize the importance of the psychological contract“, says Mike, “you know that the signals which you are sending now will potentially have long term repercussions.“ Businesses are trying a variety of innovative ways to shed labour costs and even such tough sectors like car manufacture show remarkable levels of shared problem solving as they try to adjust to reduced demand.
Derek Luckhurst of IPA has seen Options Based Consultation adopted amongst many of his clients. He agrees that redundancy offers a stiff test. Yet he adds, “Most representatives only really start to feel their value is recognized when you face these levels of difficulty. If you have a couple of years experience with Options Based Consultation you are much better equipped to deal with redundancies. It is naive to think you can avoid the problem, but the evidence of the last six months already shows that there are many more ways to reduce labour costs than slash and burn.”
Linkage to Employee Engagement
Currently the IPA is contributing to the MacLeod Review, the BERR assessment of the operation and value of employee engagement initiatives across the economy. Director Nita Clarke is a member of the review panel and recognizes that for many employers, engagement is their preferred alternative as a way of involving staff and enhancing the relationship between the workforce and the company. For many, consultation or employee voice is second best.
The IPA is committed to both employee voice through consultation and real engagement with staff. Training director Derek Luckhurst argued recently that the two activities are complementary not competing. In his view an effective process of consultation, with substantive dialogue about real business issues is a key part of how you engage with your workforce. “The Options Based Consultation model is focused unreservedly on the business case. It is about getting the best outcomes when managing change and critically, it is about making sure that decisions, sometimes unpalatable, have legitimacy in the eyes of the staff,” he adds.
Mike Emmott of CIPD is not so sure about the demonstrable value of having information and consultation bodies as such. If you have them, by all means use them he says. His experience however, suggests that other factors in workplace relations are more significant.
Recent work with senior HR directors confirms that practitioners do not feel that ICE regulations bring much to the party to help them work through the current crisis. Having invested heavily in employee engagement programmes with huge emphasis on communications and steps to align staff to business goals they are looking for a payback.
They appear to feel they are getting it. Their view is that, so far the psychological contract, the unwritten list of mutual obligations and expectations between employer and employee, is holding up relatively well in the present climate. This is the argument they are taking into the boardroom to argue for flexible and nuanced approaches to job cuts. Key words in this dialogue are authenticity, trust and consistency, according to Mike.
Staff appear to feel that they have some agency in how matters are dealt with and are prepared to face tough options over job cuts. The HR community is therefore asking itself ‘Is employee engagement making staff more resourceful in facing challenges?’ They are not asking - how has our joint consultation body helped us address these issues?
Can I&C on the one hand, and employee engagement on the other be reconciled? Peter Cressey of Bath University, who has worked extensively both in the private and public sectors, shares the doubts about the success of the ICE directive. In his work it is increasingly clear that having highly developed information and consultation procedures is not enough. Consultation needs to be part of the broader mix of managing change, not just something done to comply with the law or because of the demands of a unionized workforce.
“You only get effective voice if it is understood to be functionally useful. Employee voice is valued when it can help to address specific problems e.g. in joint problem solving or working groups,” according to Peter. In these instances voice, learning and problem solving all mould into one process which is often quite informal in how it is managed and structured. Peter feels that much more emphasis should go into the link between voice and innovation. Innovative organizations all seek to install learning mechanisms to benefit from staff’s tacit and implicit knowledge.
”Employee voice needs to offer space for collective reflection. That way it becomes a way of identifying, and indeed putting into action, sources of competitive value” says Peter. Similar perspectives in a union context have also been identified by Denis Gregory of Ruskin college. Cressey’s work in the NHS, and IPA work in NHS trusts both show the validity of this different paradigm.
Staff are professionally aligned to the values of the NHS but are often deeply alienated from the managerialist culture of an individual trust. Formal I&C can only go so far in resolving this conundrum. It should also generate a space where less formal ways of working together through problems can be tried.
Conclusion
Initially the overall picture looks bleak. Coverage is poor and commitment is low. Steps which could help representatives who are struggling to do their job such as statutory time off are not going to happen. Even in the current climate of escalating job cuts, activity is low and awareness even lower. Writing in the Guardian last month Martin Kettle wrote that Labour’s next big Idea ought to be a commitment to set up Works Councils.
“Labour should provide workers with guarantees that their skills and conditions will be at the heart of good business management. They should promise to create elected Works Councils in all companies employing over 500 workers. Such companies should be required by law to have at least one worker representative on the board. The reforms should move beyond the Them and Us industrial model.” Kettle does not know that much of what he is asking for has been in existence for half a decade. But then why should he – awareness in much of the economy is at about the same level.
On the other hand the practice of employee voice is moving on. The work by IPA and the perspectives of key supporters suggest that it is no longer simply a case of saying that the ICE regulations are the be all and end all of making sure that people’s voice at work is being heard. Other avenues exist and the evidence suggests that, in practice, they may be more fruitful. This may be where the next wave of employee voice is found.
Willy Coupar is an IPA associate and former director of the IPA.
What do you think is likely to happen to information and consultation? Do you think effective employee voice is best developed through I&C or something else? Let us know what you think - email
involve@ipa-involve.com With permission, responses may be published.
