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The Government has just announced details of impending legislation requiring employers to inform and consult staff on key business decisions. The new law is the implementation of the EEC Directive requiring employee consultation in all countries by 2005. For the first time, business employing more than 50 people have a statutory requirement to consult employees on an array of business matters.
Businesses must set up formal consultation processes if more than 10% of employees request it.
Businesses who don�t consult face fines of up to �75,000 from tribunals.
Companies who demonstrate existing arrangements (formal agreement with employee representatives or union officials) may hold a further workforce ballot where more than 40% have to vote in favour.
Employers have 6 months after a vote in favour to reach agreement with employee representatives on the best way forward. However, no compulsion to set up �continental style� workers councils.
If employees and employers cannot agree arrangements the EEC Directive requires a committee to be formed. This must meet regularly to discuss the business situation, structure and probable development of employment within the organisation. Businesses must discuss decisions likely to affect the organisation with the committee in the first instance. Discussions must be genuine, "with a view to reaching an agreement"; but no requirement to obtain consent before proceeding with any plans.
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