50+ Firm Consultation

EU Background

The obligations on employers, to share information and consult with employees derive largely from European Union Law. The EU rules fit better in EU states which provide for the mandatory recognition of trade unions. In Ireland, there is a limited obligation only, to consult with a recognised trade union, where applicable.

The Employees Provision of Information and Consultation Act 2006, transposes the European Information and Consultation Directive into Irish law. The legislation applies only to businesses which employ more than 50 persons. Its principal purpose is to ensure that the employees in larger scale businesses are informed and consulted about certain matters. There is no legal obligation on the employer to follow any advice that may arise from the consultation process.

There are a number of other pieces of legislation, many also derived from EU law, which require that employees must be consulted in certain contexts, on specific matters. The legislation provides for information and consultation in the case of businesses with workforces in two EU states. The legislation provides for notification to and consultation with employees in the context of the transfer of businesses (but not the sale of shareholdings in a corporate employer).


Requirements

The employer’s obligations are to be fulfilled under a standard form or negotiated agreement. The legislation provides that where the standard form agreement is used, information and consultation encompasses:

  • information on recent and probable developments in the businesses activity and economic situation;
  • information on the situation, structure and probable development of employment within the business and on any anticipated measures envisaged, in particular where there is a threat to employment
  • provision of information and consultation on decisions likely to lead to substantial effects on work organisation or on the terms of employment contracts.

Where a negotiated agreement is put in place, other types of information and consultation may be provided for.


Application

The onus is on the employees to initiate the information and consultation procedure. The employer need not do so until requested. However, the employer must take the initial step of ensuring that employees’ representatives are elected or appointed by the employees.

The legislation applies to businesses with 50 employees or more. This is determined by taking the average number of employees within the previous two years or during the life of the business, if shorter. If the business falls below the requisite number of employees, the agreement may be terminated, unless both parties agree otherwise.

Employees may request the Labour Court or its nominees to determine the number of employees for the purpose of the legislation. Employers are obliged to disclose the number of employees. The Court may alternatively require particulars of the number.


Initiation

Where an employer engages in negotiations with trade unions and equivalent representative bodies, then provided that the trade union or other qualifying body represents more than 10% of the employees, they are entitled to elect or appoint at least one representative. The number of representatives is to be in proportion to the workers represented by the union, relative to the workforce.

The employer must enter negotiations with employees or their representatives where

  • it has established the information and consultation arrangements on his its own initiative
  • where a request has been made by at least 10% of employees or
  • where a written request is made by the Labour Court or its representatives.

The Labour Court may be requested by an employee to make the request. It is obliged to notify the employer of the request and to seek the requisite information from the employer.


Negotiated Agreement

The employees and employers are obliged to agree on information and consultation arrangement within six months. The legislation obliges employers and employees to engage in a spirit of cooperation, having regard to their reciprocal rights and duties and the interest of the business and employees in implementing and defining arrangements for communicating information and conultation.

The information and consultation agreement may be negotiated directly or through representatives. If an agreement was in place prior to the commencement of the legislation, it might be adopted for the purpose of the legislation. An agreement is approved

  • where the majority of employees who cast a preference, so approve;
  • where the elected employee’s representatives so approve in writing or
  • where approved under an agreed procedure.

Where a negotiated agreement is not approved, the default standard rules in the Act apply after two years, unless a negotiated agreement is reached pursuant to further negotiations within that time.


Negotiated Agreement Contents

A negotiated agreement is required to set out certain terms and provisions including;

  • the method and timeframe by and in which information must be provided (e.g. directly or to employees’ representatives);
  • confidentiality provisions;
  • the subject matter of information and consultation;
  • the duration and
  • the procedure for renegotiation.

Standard Agreement

The standard rules apply

  • where they have been specifically adopted;
  • where the employer refuses to negotiate within three months of the request from the employees or Labour Court notification;
  • the information and consultation arrangements are not agreed within the above timeframe.

Under the standard form agreement, representatives are elected to the information and consultation forum. All employees of the business within Ireland are entitled to vote. An employee who has been employed for at least a year is eligible to stand for election. He must be nominated by two employees or by a trade union or other equivalent body which is recognised by the employer. A secret ballot must be taken under the auspices of a returning officer appointed by the employer. The employer must pay for the process.

Under the standard agreement, the information and consultative forum to which the representative of employees are elected is the basis of the information and consultation procedure. There must be between three and thirty members. There is a right to meet the employer twice a year or in exceptional circumstances. It may adopt its own procedures and structures.


Information/ Consultation

The employer must give information to the forum to enable it to conduct adequate study and preparation for the consultation. The subject matter for information and consultation are those set out above. The consultation takes place in the context, and on the basis of the information and the employee’s opinions and representations on foot of the information.

The consultation must take place with the relevant level of management and employees, relative to the matter in discussion. Consultation shall take place:

  • while ensuring that the method, content and timeframe thereof are appropriate;
  • at the relevant level of management and representation, depending on the subject under discussion;
  • on the basis of information supplied by the employer and of the opinion which the employees’ representatives are entitled to formulate;
  • in such a way, as to enable the forum to meet the employer and obtain a response, and the reasons for that response, to any opinion they might form;
  • with a view to reaching an agreement on decisions likely to lead to substantial changes in work organisation or in contractual relations.

The employer is responsible for the cost of the forum. The necessary and reasonable expenses of the forum must be borne by it.

An employer may refuse to communicate information or engage in consultation, where to do so, would seriously harm the functioning of the business, would be prejudicial to the business or where disclosure prohibited. Arrangements and requirements arrangements for confidentiality are provided.


Consultation Issues

Disputes between employers and employees regarding the procedural aspects and operation of the agreement may be referred to the Labour Court by either party. Disputes may relate to elections, negotiation processes, interpretation of the agreement and procedures. They may not relate to the substance of the consultation. The Labour Court may investigate a dispute and make a recommendation.

After two years and as often as may be agreed thereafter, the rules may be reviewed and revised on the basis of agreement between employers and employees.

Any penalisation of representatives may be the subject of a complaint to the WRC within six months. The Commission may declare the complaint to be well-founded or not. It may require a corrective course or that compensation be paid at a level, which is just and equitable, not to exceed two years remuneration.

The determination may be appealed to be Labour Court. As with equivalent procedures, the non- implementation of the WRC or Labour Court decision may be complained to the Circuit Court which may enforce it in a summary manner without further review.


Inspectors

The legislation contemplates the appointment of inspectors to implement the requirements. As with equivalent regulatory legislation, breach of many key obligations is an offence. This includes

  • the failure to arrange elections;
  • the failure to disclose the employee numbers;
  • the failure to put in place the requisite system;
  • the breach of confidentiality requirements by any party;
  • the obstruction or impediment of an inspector;
  • the failure to produce records
  • the failure to comply with statutory obligations.

A person guilty of an offence is liable on summary conviction, to a fine of up to €3,000 and six months in prison or both or on conviction on indictment to a fine up to €30,000 or three years in prison or both. Most offences are deemed to be continuing. A daily fine of up to €500 on summary conviction and of €5,000 per day on conviction on indictment may be imposed.


References and Sources

Primary References

Employment Law  Meenan  2014 Ch. 15

Employment Law Supplement Meenan 2016

Employment Law Regan & Murphy  2009  Ch.16 ( 2nd Ed 2017)

Employment Law in Ireland Cox & Ryan 2009 Ch.14

Other Irish Books

Employment Law Forde & Byrne 2009

Principles of Irish Employment Law         Daly & Doherty   2010

Acts

Industrial Relations Act 1946 (No. 26)

Industrial Relations Act 1969 (No. 14)

Industrial Relations Act 1976 (No. 15)

Industrial Relations Act 1990 (No. 19)

Industrial Relations (Amendment) Act 2001 (No. 11)

Industrial Relations (Miscellaneous Provisions) Act 2004 (No. 4)

Industrial Relations (Amendment) Act 2012 (No. 32)

Periodicals and Reports

Employment Law Yearbook (annual) Arthur Cox

Employment Law Reports

Irish Employment Law Journal

Employment Law Review

Legislative Guides

Dismissal & Redundancy Consolidated Legislation   Barrett, G   2007

Irish Employment legislation (Looseleaf) Kerr  1999-

Employment Rights Legislation (IEL offprint)   Kerr  2006

Shorter Guides

Employment Law Nutshell    Donovan, D         2016

Employees: Know Your Rights       Eardly        2008

Essentials of Irish Labour Law       Faulkner    2013

Websites

Workplace Relations Commission http://www.lrc.ie/en/

Irish Human Rights and Equality Commission https://www.ihrec.ie/

Health and Safety Authority http://www.hsa.ie/eng/

UK Texts

Textbook on Employment Law, Honeyball, et al. 13th Ed. 2014

Labour Law, Deakin and Morris 5th Ed. 2012

Employment Law, Smith and Wood 13th Ed 2017

Selwyn’s law of Employment Emir A 19 Ed. 2016

Employment law : the essentials. Lewis D Sargeant M and Schwab M 11 Ed.2011

Labour Law Collins H, Ewing K D and McColgan  2012

Industrial relations law reports. (IRLR): Law Section,

Employment law Benny R Jefferson M and Sargent  5th Ed.  2012

Pitt’s Employment Law 10th  Ed. Gwyneth Pitt 2016

CLP Legal Practice Guides: Employment Law 2016 Gillian Phillips, Karen Scott

Cases and Materials on Employment Law 10th  Ed. Richard Painter, Ann E. M. Holmes 2015

Blackstone’s Statutes on Employment Law 2015 – 2016 Richard Kidner

UK Practitioner Services

Tolley’s Employment Handbook 2017 Mrs Justice Slade 2017

Butterworths Employment Law Handbook 2017 Peter Wallington 2017

Blackstone’s Employment Law Practice 2017 Edited by Gavin Mansfield, John Bowers, John Macmillan 2017

UK Periodicals and Reports

The Employment Law Review 8th  Ed.   Erika C. Collins 2017

Industrial Relations Law Reports

Employment Law in Context: Text and Materials 2nd  Ed. David Cabrelli 2016