Case Number: IC/8/(2006)

16 February 2007

CENTRAL ARBITRATION COMMITTEE

THE INFORMATION AND CONSULTATION OF EMPLOYEES

REGULATIONS 2004

DECISION ON A COMPLAINT UNDER REGULATION 19(4)

The Parties:

Amicus (as Employees’ Representative)

and

Macmillan Publishers Ltd

A - INTRODUCTION

1. Amicus (“the Union”), as an employees’ representative, submitted to the CAC a complaint dated 30 November 2006 against Macmillan Publishers Ltd (“the Employer”) under Regulation 19(4) of the Information and Consultation of Employees Regulations 2004 (“the Regulations”). Under Regulation 19(4) an employee or an employees’ representative may complain that an employer has not arranged for the holding of a ballot for the election of information and consultation representatives, as required by Regulation 19(1).

2. The CAC gave the Union and the Employer notice of receipt of the application on 4 December 2006.

3. In accordance with section 263 of the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULR(C)A”), the CAC Chairman established a Panel to deal with the case. The Panel consisted of Professor Roy Lewis, Panel Chairman, and, as Members, Ms Lesley Mercer and Mr John Rugman. The Case Manager appointed to support the Panel was Nigel Cookson.

B – BACKGROUND OF COMPLAINTS AND APPLICATIONS TO THE CAC

4. In order to understand the present complaint, it is necessary to place it in the context of the previous complaints and applications made against the Employer.

Complaint under Regulation 6

5. On 29 November 2005 the Union, as an employees’ representative, submitted a complaint to the CAC under Regulation 6(1). It complained that the data that had been provided by the Employer for the purpose of Regulation 5 was incomplete in a material particular. Regulation 5 entitles an employee or an employees’ representative to request data on the number of employees in an undertaking with a view to determining the number of employees constituting 10% for the purposes of making a valid employee request under Regulation 7.

6. The Employer had in fact disclosed that it employed 1,350 staff in the UK, of whom 1,232 were full-time employees and 118 were part-time. However, it had declined to identify the individual sites making up its undertaking and it had not disclosed the number of employees within each site, as had been requested by the Union.

7. By a decision dated 22 February 2006 (IC/4/2005) the CAC decided that the complaint was well-founded. Pursuant to Regulation 6(2), the Employer was ordered to disclose to the Union, as an employees’ representative, information that consisted of the establishments, sites and/or plants that the Employer considered made up the undertaking and the number of employees within each of those units.

8. By a fax dated 3 March 2006 the Employer duly provided the relevant information to the Union, with a copy to the CAC. For the purposes of the present complaint it is material to record that the Employer listed 2 sites in London (Crinan Street and New Wharf Road), and further sites in Basingstoke, Oxford, Eaton Socon, and Swansea and disclosed the number of employees based at each site.

9. This complaint shed light on the nature of the Employer’s undertaking. It was part of the Employer’s argument, recorded in the CAC’s decision, that Macmillan Publishers Ltd, which was in the business of publishing and distributing books and journals, was an undertaking within the meaning of the Regulations. That was common ground. Further, although the Employer contested the Union’s complaint on other grounds, it did not deny that its undertaking was physically located at the various sites or establishments in relation to which the Union had made its data request. As already noted, Regulation 5 envisages data requests for the purpose of determining the number of people employed by the employer’s undertaking in the UK. Consistently with the express language of Regulation 5, the Union’s data request was formulated in terms of a request to the Employer to “identify the establishments, sites and/or plants that they consider make up the undertaking”. This formulation was reflected in the terms of the CAC’s order, which led to the Employer’s fax referred to in the previous paragraph.

The employee request to the CAC

10. By a covering letter dated 15 March 2006, the Union sent to the CAC a petition that was signed by individual employees. The Union was acting on behalf of these employees. The letter was headed: “Information and Consultation of Employees Regulations 2004, Regulation 7 – employee request to negotiate an information and consultation agreement”.

11. A Case Manager, Kate Norgate, conducted a cross-check of the names on the petition against a list of employees in the undertaking provided by the Employer. On 6 April 2006 she issued her findings in the form of separate letters (both erroneously dated 6 April 2005) to the Employer and to the Union, on the basis that the latter was acting on behalf of the employees. Each letter stated that it was a notification under Regulation 7(5)(c). The letters provided the following information: the total number of employees on the list provided by the Employer was 1,372, of whom 196 had made a request supported by their signatures for the establishment of information and consultation arrangements. Other signatures were disregarded because they did not correspond to persons on the Employer’s list, or were duplicates, or were illegible.

12. The Panel considered that it needed information about the employee request in addition to that contained in the Case Manager’s letters. In particular, it wished to know the proposition on the petition and also the span of time within which it was signed. Accordingly, on 9 February 2006 the Panel Chairman requested this information.

13. By an email dated 9 February, which was copied to the Employer and the Union, the Panel was informed by Kate Norgate as follows. The petition was in two forms: sheets of paper signed by up to 10 employees per sheet and postcards signed by individual employees. Both the sheets and the cards were headed: “an employee request to initiate the process, which will lead to the negotiation of an information and consultation agreement”. The proposition on the sheets was “we the undersigned request that our employer Macmillan Publishers Ltd initiates negotiations for an information and consultation agreement in accordance with the Information and Consultation of Employees Regulations 2004, Regulation 14”. The proposition on the cards was the same, save that it began “I request that my employer” rather than “we the undersigned request that our employer”. Taking the cards and sheets together, the petition was signed in the period from 1 December 2005 to 15 March 2006, although 7 of the effective 196 signatures were undated.

Application for union recognition

14. Finally, on 8 June 2006 the Union lodged an application to the CAC on its own behalf and not as an employees’ representative under the wholly separate procedure contained in Schedule A1 of TULR(C)A. It claimed that it should be recognised for collective bargaining by the Employer in respect of a bargaining unit comprising permanent warehouse workers at the Employer’s site in Swansea. The application culminated in a CAC decision dated 3 October 2006 declaring that the Union should be recognised by the Employer in respect of the Union’s proposed bargaining unit (TUR1/518/2006). The Employer and the Union then made an agreement on the method of collective bargaining and the union recognition case was closed.

C – THE PRESENT COMPLAINT AND THE EMPLOYER’S RESPONSE

The complaint

15. The complaint dated 30 November 2006 was made on the form specified by the CAC for making complaints under Regulation 19(4)[1]. It was completed and signed by Jonathan Hayward of Amicus, who indicated on the form that he (and by inference Amicus) was acting in the capacity of an employees’ representative. The complaint was submitted under a covering letter dated 29 November 2006 signed by 16 employees drawn from the Employer’s workplaces in Basingstoke, Oxford, Swansea and Crinan Street, London, who indicated that they had various representative positions. They also requested that the CAC liaise with Jonathan Hayward of Amicus on their behalf.

16. According to the complaint, (a) the employees had requested information and consultation arrangements on 15 March 2006, and (b) the date on which the standard information and consultation provisions applied or should have applied was 15 September 2006. The complaint explained why the standard information and consultation provisions were considered to apply in the following terms:

On the 15 March 2006 the employees…submitted a valid request to negotiate an information and consultation agreement. Unfortunately, the company failed to establish a negotiating body to negotiate an information and consultation agreement. Therefore as provided for under Regulation 18(1)(a)(i), the company is required to apply the standard information and consultation provisions, within 6 months of the “valid request”, which they failed to do. Furthermore under Regulation 19 the employer is also required to hold a ballot of its employees to elect the relevant number of information and consultation representatives before the standard information and consultations provisions apply, which the employer has failed to do. We also believe that the company has shown totally (sic) disregard and is in serious breach of Regulation 21.

The Employer’s response

17. The Employer submitted to the CAC a response dated 14 December 2006. It was contained in the CAC’s specified form for an employer’s response to a complaint under Regulation 19(4) and was completed and signed on behalf of the Employer by James Richardson, Group Personnel Director.

18. Like the complaints form, the employer’s response form sets out a series of questions with corresponding boxes in which to insert the answers.

The relevant questions and answers were as follows:

Do you accept that you are, or were, under an obligation to conduct negotiations to reach agreement on information and consultation arrangements?

Box 2 answer: Yes

If the answer to question 2 is yes, please give the dates on which negotiations took place and state the outcome of those negotiations.

Box 3 answer:[2] The company has a longstanding consultative committee system of elected representatives, one committee for each site.

Basingstoke site: 10/6/05 and 13/7/05. Members unanimously agreed to the company proposal for a voluntary agreement.

London site (Pan Macmillan): 10/10/06. Members unanimously agreed to the company proposal for a voluntary agreement.

London site (Crinan Street): 25/10/06. All but one members (sic) have unanimously agreed to the company proposal for a voluntary agreement.

Oxford site: Discussions on-going.

Agreement reached with approximately 80% of UK Workforce.

Do you accept that the standard information and consultation provisions apply to your undertaking?

Box 5 answer: Yes

If the answer to question 5 is yes, please explain below whether you have taken steps, or intend to take steps, to elect information and consultation representatives

Box 6 answer: Existing elected committees in place and/or recent elections held to elect representatives.

Clarification of the Employer’s position

19. Having considered the Employer’s response, the Panel had concerns about whether the answers were compatible with the Regulations. Pursuant to Regulation 35(2)[3], it decided to ask the Employer further questions. The purpose was to give the Employer an opportunity to clarify its position. The Panel’s questions were set out in a letter dated 8 January 2007 from the Case Manager. The Employer’s answers were contained in a letter dated 15 January 2007. The questions and corresponding answers were as follows:

How and when did the Employer respond to the employee request dated 15 March 2006?

Through discussions as above[4]

Given that it is accepted by the Employer that the standard information and consultation provisions apply (see box 5 of the Employer’s response), has the Employer arranged for a ballot for the election of information and consultation representatives as required by Regulation 19 and Schedule 2 of the Regulations?

Consultative Committees (above) consist of elected representatives.

Given that it is accepted by the Employer that it was under an obligation to conduct negotiations to reach agreement on information and consultation arrangements (see box 2 of the Employer’s response), will the Employer confirm that it is not contesting that there has been a valid employee request within the meaning of Regulations 3 and 7?

Correct.

Is the Employer seeking to argue that there are one or more negotiated agreements within the meaning of Regulations 2, 14 and 16 in place and arising from either a valid employee request or an employer notification?

No, pre-existing voluntary agreements.

Alternatively, is the Employer seeking to argue that there are one or more pre-existing agreements, within the meaning of Regulations 2 and 8 in place?

Yes.

Put positively, what defence, if any, is the Employer offering to the complaint?

The Employer contends that it has appropriate mechanisms in place for information and consultation of employees and that they enjoy the support of representatives of a significant majority of the workforce.

The Union’s comment

20. The Employer’s letter was forwarded to the Union and its comments duly invited. In a letter dated 23 January 2007 from Jonathan Hayward the Union commented that the Employer had blatantly disregarded the Regulations. The Union submitted that the Employer was confused in its interpretation of the Regulations for several reasons. First, it did not contest that a valid employee request had been received. Second, the election of consultative committee representatives did not comply with the requirements for the election of negotiating representatives under the Regulations. Third, the Employer appeared to be arguing that there were a number of voluntary pre-existing agreements in place which satisfied the requirements of the Regulations, which was not a sustainable argument since some of the site agreements post-dated the valid employee request and not all sites were covered. Fourth, while the Employer acknowledged that the standard information and consultation provisions should apply, it had failed to elect information and consultation representatives within the meaning of the Regulations or failed to inform and consult with the employees on issues specified in the standard information and consultation provisions.

21. The Employer was copied into the Union’s letter on 23 January 2007. By letter dated 24 January 2007 from the Case Manager, the Employer was invited to comment on the Union’s letter by midday on 29 January. However, the CAC received no comment from the Employer, from which the Panel inferred that the Employer elected not to comment.

D – THE LAW

22. The disposal of this complaint involves the application of several provisions under the Regulations. It is therefore necessary to understand both the overall scheme of the Regulations and the detail of the specific provisions that have to be applied. Due to the complexity of the Regulations, this is not a simple task. However, it is much assisted by Elias P’s analysis of the Regulations in Stewart v Moray Council ([2006] IRLR 592 (EAT)).

Overview of the Regulations

23. The Regulations are intended to give effect to European Directive 2002/13/EC, which established a general framework for informing and consulting employees. They impose obligations on larger employers to put in place arrangements to ensure that employees are informed and consulted on a wide range of issues. The Regulations currently apply to undertakings with at least 150 employees: Regulation 3 and Schedule 1. If there is a valid request by at least 10% of the employees, an employer covered by the Regulations is obliged to initiate a negotiating process to establish information and consultation arrangements: Regulation 7. Once the request is made the employer must undertake negotiations to seek to reach an agreement on information and consultation arrangements: Regulation 14. The Regulations provide for how the employer is to conduct the negotiations to establish such an agreement and the conditions such an agreement must meet: Regulations 14-16. If agreement is not reached within a prescribed period following a valid employee request, the standard information and consultations provisions apply; they require the employer to inform and consult within a statutory regime: Regulation 18-20.

24. Once faced with a valid employee request, Regulation 8 provides the employer with the only way envisaged by the Regulations of avoiding the obligations in respect of reaching an information and consultation agreement and, failing that, being subjected to the standard information and consultation provisions. Regulation 8 may apply if at the date of the valid employee request one or more “pre-existing agreement(s)” are in place and the employee request has been made by fewer than 40% of employees in the undertaking. In such circumstances the employer may, subject to certain conditions, hold a ballot in which the employees vote on whether they support the request for a negotiated agreement. Unless the ballot shows that a majority of those voting and 40% of the employees in the undertaking endorse the employee request, the employer need not take the prescribed steps to secure a negotiated agreement but may continue to operate the pre-existing agreement(s) by way of compliance with the Regulations.

25. The final point in this overview concerns enforcement. The CAC may issue declarations and make orders. A declaration or order made by the CAC may be relied on as if it is a declaration or order made by the High Court: Regulation 35(4). In respect of the main consultation duties – failures to consult in accordance with a negotiated agreement or the standard provisions – a CAC declaration may be followed by a separate application to the EAT for a penalty notice: Regulation 22. The EAT can impose a penalty of up to £75,000: Regulation 23.

26. As regards the specific provisions, it is necessary to consider in detail the material parts of the Regulations dealing with undertakings, valid employee requests, negotiated agreements, pre-existing agreements, and the standard information and consultation provisions.

The undertaking

27. Regulation 2 defines an undertaking as a:

public or private undertaking carrying out an economic activity, whether or not operating for gain.

Valid employee request

28. Regulation 2 defines an “employee request” as follows:

A request by employees under Regulation 7 for the employer to initiate negotiations to reach an agreement under these Regulations.

29. Regulation 7 defines a “valid” employee request. So far as is material, it provides as follows:

Employee request to negotiate an agreement in respect of information and consultation

7 (1) On receipt of a valid employee request, the employer shall, subject to paragraph (8) and (9), initiate negotiations by taking the steps set out in regulation 14(1).

(2) Subject to paragraph (3), an employee request is not a valid employee request unless it consists of —

(a) a single request made by at least 10% of the employees in the undertaking; or

(b) a number of separate requests made on the same or different days by employees which when taken together mean that at least 10% of the employees in that undertaking have made requests, provided that the requests are made within a period of six months.

(3) Where the figure of 10% in paragraph (2) would result in less than 15 or more than 2,500 employees being required in order for a valid employee request to be made, that paragraph shall have effect as if, for the figure of 10%, there were substituted the figure of 15, or as the case may be, 2500.

(4) An employee request is not a valid employee request unless the single request referred to in paragraph (2)(a) or each separate request referred to in paragraph (2)(b) —

(a) is in writing;

(b) is sent to —

(i) the registered office, head office or principal place of business of the employer; or

(ii) the CAC; and

(c) specifies the names of the employees making it and the date on which it is sent.

(5) Where a request is sent to the CAC under paragraph (4)(b)(ii), the CAC shall —

(a) notify the employer that the request has been made as soon as reasonably practicable;

(b) request from the employer such information as it needs to verify the number and names of the employees who have made the request; and

(c) inform the employer and the employees who have made the request how many employees have made the request on the basis of the information provided by the employees and the employer.

(6) Where the CAC requests information from the employer under paragraph (5)(b), the employer shall provide the information requested as soon as reasonably practicable.

(7) The date on which an employee request is made is —

(a) where the request consists of a single request satisfying paragraph (2)(a) or of separate requests made on the same day satisfying paragraph (2)(b), the date on which the request is or requests are sent to the employer by the employees or the date on which the CAC informs the employer and the employees in accordance with paragraph (5)(c) of how many employees have made the request; and

(b) where the request consists of separate requests made on different days, the date on which —

(i) the request which results in paragraph (2)(b) being satisfied is sent to the employer by the employees; or

(ii) the CAC informs the employer and the employees in accordance with paragraph (5)(c) of how many employees have made the request where that request results in paragraph (2)(b) being satisfied.

30. Regulation 12 imposes restrictions on the validity of an employee request in defined circumstances.

Pre-existing agreements

31. Regulation 2 defines a pre-exiting agreement as follows:

an agreement between an employer and his employees or their representatives which –

a) is made prior to the making of the employee request; and

b) satisfies the conditions set out in Regulation 8(1)(a) to (d)

32. Regulation 8, so far as is material, provides as follows:

Pre-existing agreements: ballot for endorsement of employee request

8 (1) Subject to regulation 9, this regulation applies where a valid employee request has been made under regulation 7 by fewer than 40% of employees employed in the undertaking on the date that request was made and where there exists one or more pre-existing agreements which —

(a) are in writing;

(b) cover all the employees of the undertaking;

(c) have been approved by the employees; and

(d) set out how the employer is to give information to the employees or their representatives and seek their views on such information.

(2) Where this regulation applies, the employer may, instead of initiating negotiations in accordance with regulation 7(1), hold a ballot to seek the endorsement of the employees of the undertaking for the employee request in accordance with paragraphs (3) and (4).

(3) The employer must —

(a) inform the employees in writing within one month of the date of the employee request that he intends to hold a ballot under this regulation; and