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The EU Information and Consultation Directive 2002 established minimum requirements for companies with more than 50 employees for consulting and informing them on a wide variety of subjects. The Information and Consultation of Employees Regulations 2004 (ICER) implement the Directive in the UK. The ICER apply to public and private undertakings that carry out an economic activity. The undertaking does not have to be operating for gain.
The requirement to inform and consult employees does not operate automatically. It is triggered either where a valid written request to agree consultation arrangements is made by 10 per cent of the employees (subject to a minimum of 15 employees) or if the employer chooses to start the process.
Regulation 22(1) of the ICER provides that a complaint may be presented to the Central Arbitration Committee (CAC) by a relevant applicant where a negotiated agreement has been established and the applicant considers that the employer has failed to comply with its terms.
Since 1975, the Advisory, Conciliation and Arbitration Service (Acas) has been instrumental in helping to resolve some of Britain’s most bitter industrial disputes. However, an important Employment Appeal Tribunal (EAT) ruling has established that it owes the same legal duty as any other substantial employer to consult with its staff pursuant to collective agreements (Advisory, Conciliation and Arbitration Service v Public and Commercial Services Union).
The Public and Commercial Services Union had complained to the CAC that Acas had failed to consult with its employees pursuant to an agreement negotiated with the union in 2006 and renewed in 2015. In accepting jurisdiction to consider the complaint, the CAC rejected Acas’s argument that it was not an undertaking carrying out an economic activity and was thus exempted from the relevant duty.
In ruling on Acas’s challenge to that decision, the EAT noted that it is a non-departmental public body that receives about £50 million in annual funding from the Department for Business, Energy and Industrial Strategy. It employs over 750 full-time civil servants and provides the vast majority of its services free of charge.
In dismissing the appeal, however, the EAT noted that the fact that Acas does not operate for gain does not mean that it is not an undertaking to which the ICER apply. There is no requirement that relevant goods or services have to be paid for by their consumer or end-user. The provision of public services by a public authority, and without a profit motive, is capable of being an economic activity.
The EAT accepted that not all the activities performed by Acas – in particular pursuant to the duties and powers of conciliation it exercises under the Employment Tribunals Act 1996 – can be viewed as economic. However, like other government bodies, it charges for certain services, including face-to-face training, mediation and workplace projects, and raises about £4.5 million a year from service users. In those circumstances, Acas is sufficiently engaged in economic activities for the ICER to bite.