Information and consultation in the UK: an alien imposition?

The European Commission's proposed Directive on national information and consultation rules has been welcomed by UK trade unions but opposed by employers and the government. This feature reports on an Anglo-German seminar held in March 1999 to discuss the implications of the draft Directive, and highlights the significance of consultation arrangements in UK industrial relations.

An "open discussion" comparing British and German approaches to employee information and consultation was held at the headquarters of the Trades Union Congress (TUC) on 24 March 1999. The event was organised the trade union-linked Jim Conway Foundation (named after a former general secretary of the UK engineering union) in association with Germany's Friedrich Ebert Foundation and Hans Böckler Foundation. Speakers included David Lea of the TUC, Rolf Jäger of the German Mining, Chemicals and Energy Union (Industriegewerkschaft Bergbau, Chemie, Energie, IG BCE), Willy Buschak of the European Trade Union Confederation (ETUC) and Bernd Heinzemann, representing both the Confederation of German Employers' Associations (Bundesvereinigung der Deutschen Arbeitgeberverbände, BDA) and the Union of Industrial and Employers' Confederations of Europe (UNICE). The main purpose of the seminar was to examine the operation of the "German model" and consider the likely impact in the UK of the draft EU Directive on national-level information and consultation (EU9812135F). The union speakers welcomed the proposed Directive (though regretting the changes from earlier unofficial drafts), as did Willy Coupar of the UK Involvement and Participation Association, an organisation of employers and trade unionists favouring "partnership" in industrial relations.

Perhaps significantly, the UK Confederation of British Industry (CBI) did not send a representative to the conference. While the TUC has welcomed the proposed Directive, the CBI has denounced its "prescriptive" nature as a "completely unacceptable breach of the principle of subsidiarity" (UK9811162N). The UK Labour government, which on other issues has proved anxious to accommodate the views of business, has reacted along similar lines. Even within the Institute of Personnel and Development, which tends to reflect "progressive" employer opinion, there has been virulent criticism: one of its vice-presidents, Clive Morton, reacted that "the idea of imposing a particular structure for consultation - in this case the works council model - will understandably cause concern to employers ... It's hard to see how compulsion is likely to engender the right spirit in reluctant management teams" (writing in People Management magazine, November 1998). This is despite the fact that the draft Directive nowhere mentions works councils, and repeatedly emphasises the need for flexible implementation in the light of national circumstances.

The hostile reaction of most British employers is predictable. In almost all EU Member States there is a long history of workplace information and consultation machinery, established either by law or by "peak-level" collective agreement. The UK (together with Ireland) is the outstanding exception. It may thus be surprising that there is a considerable history of consultative arrangements in the UK though, given the "voluntarist" industrial relations tradition, the importance of information and consultation mechanisms has fluctuated over time, and the nature of such arrangements varies considerably between employers. This evidently means that the impact of any eventual consultation Directive on UK industrial relations will be uneven.

The evolution of consultative arrangements in the UK

Public attention to information and consultation can be traced back to the Whitley Committee, established by parliament in 1916. In a series of reports, it recommended the formation in each industry of "joint industrial councils" at national level, and works committees in each establishment; these institutions would be concerned not only with traditional collective bargaining issues of wages and employment conditions but more general questions of production and productivity. (Interestingly, these proposals slightly pre-dated the creation of works councils in Germany.) In practice, Whitley had little impact in industries where trade unionism and collective bargaining were well established, but was more influential elsewhere, notably in the public sector. Where procedures for information and consultation were created, these were normally linked directly to trade union representation, and in consequence not clearly demarcated from collective bargaining.

During the 1939-45 war, the UK government gave strong support to the idea of "joint consultation" as an aid to maximum production, and "joint production committees" were extensively created. Their functions were sustained as part of the post-war productivity drive, while the nationalisation legislation of the same period specifically prescribed the establishment of consultation committees at workplace and national levels in state-owned industries. Employee representatives in the processes of information and consultation were in most cases explicitly union nominees, and the division of functions between consultation and collective bargaining remained unclear. To a large extent, consultative mechanisms became integrated into more general management-union arrangements or fell into disuse.

In the past decade or so, there has been a revival of interest in employee consultation. In some cases this has reflected a general enthusiasm for "human resource management": information and consultation are here directed at employees as individuals. Collective arrangements for information and consultation have been widely introduced as elements of "partnership" agreements designed to improve corporate performance. A number of such initiatives have received considerable attention, in such diverse organisations as the Rover Group, Blue Circle Cement (UK9702102F), Scottish Power, Tesco and British Aerospace. Some consultation committees consist entirely of trade union nominees; others of directly elected employee representatives; some of a combination of the two.

While some commentators have viewed the revival of consultation as evidence of a "new industrial relations", the significance of recent initiatives should not be exaggerated. The Workplace Industrial Relations Survey of 1990 found that joint consultative committees (JCCs) existed in 29% of establishments, down 5% on 1984 (the proportion in the public sector was 49%). Such committees were significantly more common where unions were recognised than where they were not. Preliminary results of the 1998 Survey show JCCs in 28% of all establishments, virtually the same as in 1990 (UK9811159F). In a further 25% of cases, a committee existed at a higher level in the organisation. Consultative arrangements are more common in large than in small establishments, and the overall coverage of employees is therefore greater than these figures imply: for two-thirds of all workers, there is a JCC at workplace or higher level.

Union attitudes to consultation

UK unions, in the main, have traditionally been suspicious of any formal separation between information and consultation on the one hand and union representation on the other. The predominant view has been that directly elected works councils or committees: would reduce the incentive for workers to unionise; might restrict unions' bargaining authority by defining certain issues as for consultation only; and could be used by anti-union employers as a means of bypassing union representation. When a statutory procedure for workplace health and safety committees was introduced in the 1970s, these were explicitly linked to trade union representation. Likewise, when the EU Directives requiring consultation over collective redundancies and transfers of undertaking were initially transposed in the UK, their requirements applied only where employers recognised unions - a restriction condemned by the European Court of Justice (ECJ) in 1994 (UK9803109F).

Attitudes changed in the 1990s, in a period when union membership fell below a third of the workforce and collective bargaining coverage below a half. In 1995, partly in response to the ECJ judgment, the TUC reaffirmed its preference for a link between consultation and union representation, but accepted that direct election to a consultative body was better than nothing, and might provide unions with an opportunity to build up membership and achieve negotiating rights. At its 1998 Congress, the TUC approved a lengthy composite resolution on Europe which included a paragraph welcoming the Commission initiative on national-level information and consultation.

Commentary

What impact would a Directive along the lines proposed by the Commission have on UK industrial relations? First - as some speakers at the March 1999 seminar emphasised - the UK has already moved slightly in the direction of statutory consultation machinery: with regulations in 1995 in response to the ECJ judgment, and in 1996 to provide for health and safety representatives where no union is recognised.

A general right to information and consultation would of course be much more far-reaching. Much would obviously depend on how far the Commission's draft is amended, and also on the manner of transposition into UK law. The proposal currently specifies that "Member States may authorise the social partners at the appropriate level, including at undertaking level, to define freely and at any time through negotiated agreement the procedures for implementing the ... requirements". While not impossible, it is very difficult to envisage a central agreement on implementation between the TUC and CBI; but company-level agreements (many of which indeed already exist) could in principle satisfy the Directive. Conceivably, such agreements could be applied to cover most of the two-thirds of UK employees already affected by information and consultation arrangements at workplace or higher level - though trade unions might refuse to accept provisions falling significantly short of the rights specified in the Directive.

The other question is what would happen to employers which currently have no consultation procedures? Many are small firms which would not be subject to the Directive, whatever the size threshold eventually adopted. For the rest, the traditional controversies among British trade unionists - will abandoning "single channel" union representation create a Trojan horse or a springboard for advance? - could finally be put to empirical test. (Richard Hyman, IRRU)