Voluntary recognition of a trade union
In this guide:
- Recognising and derecognising a trade union
- Meaning and types of trade union recognition
- Voluntary recognition of a trade union
- Statutory recognition of a trade union - starting the procedure
- The consequences of trade union recognition
- Voluntary trade union recognition within the statutory procedure
- Statutory derecognition of a trade union - an introduction
- Procedure where the bargaining unit is no longer appropriate or has ceased to exist
- Workers' rights in relation to trade union recognition or derecognition
- Statutory recognition of a trade union - applying to the Industrial Court
- Statutory recognition of a trade union - deciding on the bargaining unit
- Statutory recognition of a trade union - recognition ballots
- Statutory derecognition of a trade union owing to reduced size of workforce
- Statutory derecognition of a trade union owing to lack of support for bargaining arrangements
- Statutory derecognition of a trade union: falling union membership in the bargaining unit
- Derecognition of a non-independent trade union
- Statutory derecognition of a trade union - derecognition ballots
Meaning and types of trade union recognition
A summary of voluntary and statutory recognition, and what recognition means for both the employer and the union.
A trade union is said to be recognised once an employer has agreed to negotiate with it on pay and working conditions on behalf of a particular group of workers.
The subsequent negotiation process is known as collective bargaining, with the group of workers the union represents referred to as the bargaining unit.
If an employer agrees to recognise a trade union the employer has certain legal obligations towards the union and its members - see the consequences of trade union recognition.
Voluntary trade union recognition
The most common way a union can gain recognition for collective bargaining purposes is by the employer simply agreeing to recognise it voluntarily.
In practice this means the union becomes recognised by the employer without using any legal procedures. See voluntary recognition of a trade union.
Statutory trade union recognition
If an employer and trade union find they are unable to come to a voluntary recognition agreement, a trade union can make an application for statutory recognition. This only applies where the employer, together with any associated employers, employs 21 or more workers.
See statutory recognition of a trade union - starting the procedure.
Note that there can be voluntary agreements even after the union has triggered the statutory process - see voluntary recognition within the statutory procedure.
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Voluntary recognition of a trade union
Recognising trade unions - the voluntary option.
As an employer, there is nothing to stop you from voluntarily agreeing to recognise one or more trade unions.
Most union recognition arrangements are established in this way. Such voluntary recognition provides maximum flexibility to the parties and avoids them having to use the alternative - potentially complex - statutory recognition procedures.
Once an employer recognises a union for the first time, the two parties will usually draw up an agreement which specifies how the recognition arrangement, and its associated bargaining processes, will work.
Formal written agreements of this kind - known as 'procedural' agreements - prevent misunderstanding and achieve continuity and consistency. As relationships develop, the parties may periodically wish to revise and update their procedural agreements. The Labour Relations Agency (LRA) can facilitate meetings to assist the parties in drafting procedural and recognition agreements.
The LRA can also provide impartial information on bargaining agreements. See LRA guidance on collective bargaining.
If you voluntarily recognise a union, you will have certain legal obligations towards the union and its members. See the consequences of trade union recognition.
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Statutory recognition of a trade union - starting the procedure
How trade unions can obtain statutory recognition.
If you find you are unable to come to a voluntary recognition agreement with the trade union, it can make an application for statutory recognition. This only applies where you - together with any associated employers - employ 21 or more workers.
The union's request must:
- clearly identify the union and the bargaining unit
- state that the request is made under the Employment Relations (NI) Order 1999
You have ten working days to respond, starting with the first working day after the day you receive the request.
If you agree to the request, you have formally recognised the trade union for collective bargaining purposes.
If you reject the request or fail to respond in time, the union can apply to the Industrial Court for statutory recognition - see statutory recognition of a trade union - applying to the Industrial Court.
Negotiations with the union following its request
If you tell the union that you don't accept the request but are willing to negotiate, you have 20 working days to agree on the appropriate bargaining unit and to agree on recognition. The Labour Relations Agency (LRA) may also be of assistance.
The 20-day period starts on the day after the first ten-day period ends. You can agree with the union to extend the 20-day period.
If you fail to reach an agreement at the end of that period - or you agree on a bargaining unit but don't agree to recognise the union - the union can apply to the Industrial Court.
If - following negotiations between you and the union - the union's proposed bargaining unit is modified but you fail to agree on the bargaining unit, the union must make a new request to you that complies in full with the statutory requirements before it can make an application to the Industrial Court.
You can reach a voluntary agreement with the union even after the statutory process has started - see voluntary recognition within the statutory procedure.
If you reach an agreement, the statutory procedure ends.
Approaching LRA for help
You or the union can approach the LRA for help at any time. The LRA can provide its conciliation services to assist the parties in reaching agreement.
If you propose to the union that the LRA helps but the union fails to respond within ten working days or rejects your proposal, the union cannot make any application to the Industrial Court. The ten-day period starts on the day after that on which you made your proposal.
You have to make this proposal within ten working days of informing the union that you are willing to negotiate. This period starts on the day after you so inform the union.
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The consequences of trade union recognition
What an employer and union must do once the union has become recognised.
There are a number of consequences once a trade union becomes recognised.
Many apply regardless of whether recognition was voluntary, semi-voluntary or statutory. However, some are only relevant where a union uses the statutory procedure.
Making arrangements for the conduct of collective bargaining
Once a union has achieved recognition, either via a voluntary or the statutory procedure, you and the union - 'the parties' - need to agree how you will conduct collective bargaining.
Such an agreement could cover the following issues:
- bargaining procedure
- how and when meetings will be arranged
- who the employer and union representatives are
- time off for union representatives to attend meetings
- how agreements and disagreements will be communicated to the workforce
- conduct during negotiations - how and when issues can be raised
- the specific matters which will be subject to joint agreement, eg pay and working hours
- dispute resolution - what should happen if deadlock is reached on a particular issue, eg conciliation and arbitration
- union recruitment activities in the workplace
- union representation of workers at disciplinary and grievance hearings
- deduction of union contributions from employees' wages
Deciding what a collective agreement will cover
Collective agreements usually cover pay arrangements and other terms and conditions of employment. They might also cover such matters as:
- matters of discipline
- trade union membership or non-membership
- facilities for officials of trade unions
The procedural agreement should set out the level at which negotiations will take place, eg site, company, regional or national level.
It should also specify the bargaining methods where two or more unions are recognised, eg whether unions should bargain separately or as a single bargaining unit.
The parties usually need training on aspects of employment relations and the bargaining process. Some trade unions and independent organisations provide accredited courses.
Usually, collective agreements are not in themselves legally enforceable. However, parts of collective agreements such as pay rates, or references to agreements, may be inserted and thus legally incorporated into the employment contracts of individual employees. Because individual employment contracts are legally enforceable, many collective agreements are indirectly underpinned by law.
Legal consequences of statutory trade union recognition
Once the Industrial Court declares that a union is recognised, the union is entitled to conduct collective bargaining with you on pay, hours and holidays - although the parties can agree to cover additional issues.
The parties must first agree on how they will conduct collective bargaining, calling on the services of the Labour Relations Agency (LRA) if necessary.
If no agreement is reached within 30 working days, either party has the right to apply to the Industrial Court for assistance.
The Industrial Court has 20 working days from the application date to help achieve an agreement. If no agreement is reached, the Industrial Court will impose a legally binding method of bargaining.
However, the imposed method of collective bargaining can be modified by the parties, providing they both agree.
If the imposed method is not followed, either party can apply to a court to order the other party to act in accordance with the prescribed method.
If this order is ignored by the relevant party, that party will be in contempt of court, and may face a fine or imprisonment.
Where the Industrial Court has imposed a method for carrying out collective bargaining, the union has the right to be consulted by you on your policies and plans for training workers in the bargaining unit at least once every six months.
If you fail to meet these consultation obligations, the union has three months to make a complaint to an industrial tribunal. If the tribunal finds the complaint well founded, it may award up to two weeks' pay to each affected worker.
Note that there is a statutory limit on a week's pay. See a table of current tribunal and arbitration compensation limits.
Disclosing information to trade unions
You have a duty to disclose - if requested - relevant information to a recognised trade union during the collective bargaining process.
The LRA has a code of practice on disclosure of information to trade unions for collective bargaining purposes. The code imposes no legal obligations on you to disclose any specific item of information and failure to observe the code does not by itself mean you would be liable to legal proceedings.
However, the law requires any relevant provisions to be taken into account in proceedings before the Industrial Court.
General legal consequences of trade union recognition
Once a union becomes recognised, you have a legal duty to:
- allow lay union representatives to take reasonable time off with pay to perform their duties
- allow members covered by the recognition arrangements the right to reasonable unpaid time off to carry out trade union activities
- allow union learning representatives time off with pay to carry out their duties
For more on time-off rights for union representatives and members, see trade union membership rights.
You also have a legal duty to:
- inform and consult the union during collective redundancy situations and business transfers - see redundancy: the options and responsibilities to employees if you buy or sell a business
- inform and consult the union on certain changes to your occupational pension scheme - if you operate one - or employees' personal pension schemes if you contribute to them - see keeping employees informed
- allow the union to appoint health and safety representatives, with whom it has to consult on workplace health and safety issues - see how to consult your employees on health and safety
All these obligations apply regardless of whether the recognition was via the statutory or voluntary route.
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Voluntary trade union recognition within the statutory procedure
Voluntary agreement for union recognition within a statutory context.
If, during the statutory trade union recognition procedure, you voluntarily agree to recognise a union, it may withdraw its request for statutory recognition.
Alternatively, if the union had made an application to the Industrial Court, you and the union - 'the parties' - may have jointly asked the Industrial Court to take no further action.
However, this must happen before the Industrial Court either makes a declaration that the union is entitled to recognition without a ballot, or arranges a recognition ballot. See statutory recognition of a trade union - starting the procedure.
This type of agreement is known as an agreement for recognition or a semi-voluntary agreement. It is not the same as a voluntary agreement made outside the statutory procedure.
Once an agreement for recognition has been reached, the parties must enter into negotiations on collective bargaining arrangements.
If they can't agree on an appropriate method, either party may apply to the Industrial Court for help. The Industrial Court can assist if it is satisfied that there is an 'agreement for recognition' as defined in the legislation.
If the parties still fail to reach agreement, the Industrial Court will impose a method for collective bargaining.
Duration of recognition
Once you have agreed to recognise a trade union for collective bargaining purposes, the union may terminate the agreement at any time, unless you have previously agreed with the union to the contrary.
You may not terminate the agreement for a period of three years unless you have agreed with the union to the contrary.
For the circumstances under which a union may become derecognised, see statutory derecognition of a trade union - an introduction.
If the agreement becomes difficult to maintain, either party can apply to the LRA to help it resolve the difficulties.
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Statutory derecognition of a trade union - an introduction
Procedures to be followed when a trade union with statutory recognition may be derecognised
If a union achieved recognition via the statutory procedure, certain procedures have to be followed for it to be derecognised.
However, you can only seek statutory derecognition three or more years after recognition was originally granted.
There are three main grounds for derecognition:
- you - taken with any associated employers - no longer employ 21 or more workers
- application by the employer or by a worker or workers where it is believed that there is no longer majority support for bargaining arrangements
- union membership in the bargaining unit falls below 50 per cent
In situations where grounds 2 or 3 apply and an application for derecognition is accepted by the Industrial Court, the Industrial Court could declare that a derecognition ballot be held.
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Procedure where the bargaining unit is no longer appropriate or has ceased to exist
What happens if the bargaining unit becomes inappropriate because the employer's business changes.
A situation may arise when a union or employer feels that the bargaining unit - the group of workers the union represents - is no longer appropriate or has ceased to exist. Either party may apply to the Industrial Court to determine what bargaining unit is appropriate.
In order for the Industrial Court to reach its decision, the bargaining unit must have changed because of one or more of the following:
- the business' activities
- the organisation or structure of the business
- the number of workers in the bargaining unit
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Workers' rights in relation to trade union recognition or derecognition
Treating workers fairly as regards the recognition or derecognition of a trade union.
Workers have certain rights relating to their involvement in recognition and derecognition procedures.
Protection from detrimental treatment and unfair dismissal
An employer must not subject a worker to a detriment on grounds related to the process of union recognition or derecognition, eg for taking part in a recognition ballot or for campaigning for recognition.
Detriment is broadly defined but essentially means that the worker should not suffer disadvantage on account of any act or omission by you. This could include:
- suspending the worker
- cutting their pay
- moving them to new duties
- failing to give them a pay rise
For a worker who isn't an employee, their dismissal may also count as a detriment. Only employees can claim unfair dismissal.
If any of the above occurs, a worker could bring a claim before an industrial tribunal. If the tribunal finds that you acted unlawfully, it may award compensation.
If an employee is dismissed or selected for redundancy on grounds relating to union recognition or derecognition, they may be able to make a claim for unfair dismissal to the tribunal.
Rights regarding inducements to disapply collective agreements
Many members of trade unions have their pay and other terms and conditions of employment set by a collective agreement negotiated by their union and their employer.
These members have rights to ensure that the employer does not interfere between the union member and their union in certain matters related to collective bargaining.
An employee or other worker who is a member of an independent trade union which is recognised by - or seeking recognition from - their employer for collective bargaining purposes has the right not to have certain offers made to them by their employer.
This is in circumstances where the employer's sole or main purpose is to achieve the result that, if the offer and like offers to other workers are accepted, all or any of those workers' terms and conditions will no longer be determined by a collective agreement negotiated by or on behalf of the trade union.
In addition, an employee has the right not to be dismissed, or selected for redundancy, by their employer on the grounds that they did not accept any such offer.
An employee or other worker has the right not to be subjected to a detriment for failing to accept any such offer.
Right of complaint to an industrial tribunal
Individuals who think that any of their rights as set out above have been infringed can complain to an industrial tribunal.
If an employee has been dismissed - including cases where they have been dismissed on grounds of redundancy - their complaint is one of unfair dismissal.
If an employee or other worker considers that they have been subjected to a detriment by their employer, their complaint is one of detriment.
If an employee or other worker considers that you have made an unlawful inducement as described above, their complaint is one of unlawful inducement.
Compensation
There are certain limits on the compensatory awards for the claims in relation to dismissal, detriment and unlawful inducements. See a table of current tribunal and arbitration compensation limits.
Note that in cases where an employee or other worker makes a related complaint to the tribunal concerning detriment, and the tribunal upholds that complaint, the tribunal may award compensation for the detriment suffered.
In deciding the amount of such compensation, the tribunal will not take into account the fact that:
- a complainant contributed to their loss by accepting or not accepting an unlawful inducement
- the complainant has received or is entitled to an award on the grounds that an unlawful inducement has been made to them
Status of contractual changes resulting from unlawful inducements
If an unlawful inducement has been accepted by an employee or other worker, but any consequent agreement by them to vary their terms and conditions has not yet been effected, the agreement to vary the terms and conditions is not enforceable.
Also, in such circumstances, the employer cannot recover any cash paid or other benefits conferred on the employer or worker concerned.
However, in cases where the agreed variation in terms and conditions have been effected, those variations are enforceable.
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Statutory recognition of a trade union - applying to the Industrial Court
How the Industrial Court deals with unions' applications for recognition under the statutory procedure.
A union can apply to the Industrial Court if it sends you a request for statutory recognition but you either reject the request, or following negotiations between you and the union - 'the parties' - you fail to agree on the bargaining unit.
Industrial Court panels
A panel of three Industrial Court members will be convened to deal with each application. The panel will consist of:
- the Industrial Court Chairman or Deputy Chairman
- one member with experience as a representative of employers
- one member with experience as a representative of workers
The individuals making up the panel could change if one becomes unavailable.
An Industrial Court official will be appointed to act as case manager for the application. They act as the main point of contact between you, the panel and the union.
Admissibility tests for union applications to the Industrial Court
In order for the Industrial Court to accept an application for recognition from a trade union, it must be:
- on the proper Industrial Court application form
- copied and sent to you, together with any supporting documents
The following conditions must also apply:
- The union must have a certificate of independence from the Certification Office.
- As the employer, you - together with any associated employer(s) - must employ at least 21 workers. Part-time workers count as whole numbers.
- There must not be a competing application relating to the same or overlapping bargaining units.
- There must not be an existing recognition agreement under which a union is entitled to conduct collective bargaining on behalf of any workers in the proposed bargaining unit.
- At least 10% of the workers in the proposed bargaining unit must belong to the union making the application.
- The majority of workers must be likely to favour recognition. Evidence of this could be a petition from workers.
- If the application is made by more than one union, the unions concerned must show that they will co-operate with each other to achieve stable collective bargaining arrangements.
- There must not have been a previous application from the same union covering the same - or substantially the same - bargaining unit accepted by the Industrial Court within the last three years.
On receiving an application, the Industrial Court will send you:
- notification that it has received the application
- a questionnaire for you to fill in to give it information relating to the admissibility criteria
The Industrial Court has ten working days to decide whether or not to accept the application.
Industrial Court acceptance of the union's application
If the Industrial Court accepts a trade union's application for statutory recognition, the parties have 20 days - which may be extended or reduced if the Industrial Court decides there is no reasonable chance of agreement between the parties - to agree on the appropriate bargaining unit.
In these circumstances, you must provide the following information to both the Industrial Court and the union within five working days, starting with the day after that on which you received notice of the acceptance:
- A list of the categories of worker in the proposed bargaining unit.
- The number of workers you reasonably believe are in each of the categories at each of the workplaces.
- A list of the workplaces at which they work. A workplace is the set of premises a person works at/from, or - where there are no such premises - the premises with which the worker's employment has the closest connection.
The information you give to the union and the Industrial Court must be the same and as accurate as is reasonably practicable in light of the information you have at the time.
If you fail to supply the required information - or fail to provide it in accordance with the statutory criteria - the union can request that the Industrial Court itself decides the bargaining unit.
If the Industrial Court agrees that you have failed to comply with this duty, it will decide the bargaining unit - usually within ten working days starting with the day after that on which the union made the request.
Union communications with workers following the Industrial Court's acceptance of the application
Where the Industrial Court accepts an application, the union may want to communicate with workers who are in the proposed or agreed bargaining unit.
To do so, the union must apply in writing to the Industrial Court asking it to appoint a suitable independent person (SIP) to handle these communications.
The Industrial Court will appoint the SIP as soon as possible after the union's request and will then notify the name, and appointment date, of the appointed person to the parties.
Once the Industrial Court appoints a SIP, you must - as soon as reasonably practicable - provide certain information to the Industrial Court that will enable the SIP to fulfil their role.
This information is as follows:
- The names and home addresses of the 'relevant workers'. You must do this within ten working days, starting with the day after that on which you are informed of the name and date of appointment of the SIP. Relevant workers are either those falling within the proposed bargaining unit or - if a bargaining unit has already been agreed by the parties or decided by the Industrial Court - those within that bargaining unit.
- If you have given the Industrial Court the names of workers in the proposed bargaining unit and then either you and the union agree on a different bargaining unit or the Industrial Court decides the bargaining unit, you must give the Industrial Court the names and home addresses of those who are now the 'relevant workers', ie those workers who fall within the different bargaining unit. You must do this within ten working days, starting with the day after that on which you and the union agree on the bargaining unit or the Industrial Court informs you of its decision on the bargaining unit.
- The name and home address of any worker who subsequently joins the bargaining unit after you supply the initial list.
- The details of any worker who ceases to be a 'relevant worker' because they have left the bargaining unit - except where a new complete list is supplied because the definition of the bargaining unit changes.
If you fail to comply with these duties, the Industrial Court may order you to remedy the failure within a set timescale.
If you fail to comply with the order, the Industrial Court may issue a notice to you and the union confirming that you have failed to comply with the order and may also declare that the union is recognised.
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Statutory recognition of a trade union - deciding on the bargaining unit
How the Industrial Court may help you and the union decide on the appropriate bargaining unit.
If the Industrial Court accepts a trade union's application for statutory recognition but you and the union - 'the parties' - fail to agree on the bargaining unit, the Industrial Court panel must try to help the parties reach agreement on what the appropriate bargaining unit is.
It is important that the parties are clear as to which workers are included in the bargaining unit. This is because if - at a later stage in the process - a ballot is held, both the parties and the Industrial Court will need to know exactly which workers are entitled to receive a ballot paper.
To reach a decision on the bargaining unit, the Industrial Court may:
- itself mediate between the parties
- suggest the parties seek help from the LRA
- allow the parties - if they prefer - to conduct these negotiations between themselves directly
The Industrial Court has a period of 20 working days (the appropriate period) in which to try to help the parties reach an agreement. The period starts with the day following that on which the Industrial Court gives notice that it has accepted the trade union's application - see statutory recognition of a trade union - applying to the Industrial Court.
The Industrial Court can extend the appropriate period or bring it to an end if it believes that the parties are unlikely to reach an agreement. In addition, both parties can apply to the Industrial Court to bring the appropriate period to an early end.
Failure to agree on the appropriate bargaining unit
If the parties cannot agree on the bargaining unit or the union asks the Industrial Court to decide on the bargaining unit as set out in statutory recognition of a trade union - applying to the Industrial Court, the Industrial Court must decide within a period of ten working days whether or not the union's proposed bargaining unit is appropriate.
If the Industrial Court decides that the union's proposed bargaining unit is not appropriate, it must decide on a bargaining unit which is appropriate.
To make its decision, the Industrial Court has to consider:
- the location of workers
- the views of both parties
- existing national and local bargaining arrangements
- the preference to avoid small, fragmented bargaining units
- the characteristics of workers in the proposed bargaining unit and any other workers the Industrial Court considers relevant
- the need for the unit to be compatible with effective management - this factor takes priority over all the others
The Industrial Court may ask you and the union for your views on these issues - eg any views you may have on an alternative bargaining unit to the one proposed by the union.
If there is conflicting evidence on whether the union's proposed bargaining unit is appropriate, the Industrial Court panel is likely to call a hearing to determine the question.
Where the agreed or decided bargaining unit differs from the one initially proposed
Whether a bargaining unit is agreed between the parties or is decided by the Industrial Court, if that bargaining unit is different from the one proposed in the union's initial application for statutory recognition, the Industrial Court has to determine whether or not the new bargaining unit is 'valid'.
The bargaining unit will only be valid if:
- there is at least 10 per cent union membership in the new bargaining unit
- a majority of workers in the new bargaining unit is likely to favour recognition
- there is not a competing application including any workers covered by the new bargaining unit
- there is not an existing agreement under which a union can conduct collective bargaining on behalf of any workers in the new bargaining unit
- there has not been a previous application from the same union covering the same - or substantially the same - bargaining unit within the last three years
Following any necessary investigations, the Industrial Court panel may call a hearing to determine the validity of the revised bargaining unit. It normally has ten working days to reach its decision.
If - as a result of changes to the bargaining unit - the application does not meet the applied validity tests, the Industrial Court cannot proceed with the union's application.
However, the union can re-apply for statutory recognition of this revised bargaining unit within three years.
Industrial Court hearings
The Industrial Court will normally arrange hearings as quickly as possible in order to meet its statutory deadlines. This may mean imposing a hearing date even if it's not the most convenient date for either or both parties.
The Industrial Court expects that hearings will normally be completed in a day. The Industrial Court is based in Belfast, but it may hold hearings at other, more convenient locations. Hearings are normally informal and held in public.
Before a hearing, the chairman of the Industrial Court panel may hold a preliminary meeting in order to set out procedures and identify the issues disputed.
The Industrial Court will ask the parties to submit and exchange written evidence before the hearing.
The Industrial Court will only allow new evidence at hearings for good reasons and at the discretion of the panel. Where it is admitted, parties can request that the panel allows some additional time - such as a short adjournment - to consider the new evidence.
The Industrial Court will ask the parties to inform the panel in advance of the names of the speakers and any witnesses proposed for the hearing. The parties may appoint legal representatives but there is no obligation to do so.
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Statutory recognition of a trade union - recognition ballots
What happens when a vote is needed to confirm support for trade union recognition.
Once the Industrial Court accepts an application and the bargaining unit has been agreed on or decided, the Industrial Court panel has to decide whether to call a ballot on union recognition.
Industrial Court's decision on whether or not to hold a recognition ballot
The main test is the level of union membership in the bargaining unit. If the Industrial Court panel is not satisfied that the majority of the workers in the bargaining unit belong to the union making the application, it has to call a ballot on union recognition.
If necessary, the Industrial Court panel can require:
- you to provide information concerning the workers in a bargaining unit
- the union to provide information concerning the union members in a bargaining unit
Using this information, the Industrial Court case manager will compile a report and send a copy to you, the panel and the union.
If either you or the union fail to supply the information required by the Industrial Court, the report must mention that failure and this could influence the panel's decision.
On receiving the report, the Industrial Court will then decide whether to make a declaration of recognition or hold a ballot of workers in the bargaining unit.
Generally, if the report shows that a majority of the workers in the bargaining unit are union members, the Industrial Court will make a declaration of recognition. If not, it will call a ballot.
However, the Industrial Court may still call a ballot - even if there is majority union membership - if:
- it is satisfied that holding a ballot would be in the interests of good industrial relations
- it believes it has credible evidence from a significant number of union members in the bargaining unit that they do not want the union to conduct collective bargaining on their behalf
- there is evidence relating to how workers joined the union or their length of membership that leads the Industrial Court to doubt whether a significant number of union members in the bargaining unit want the union to conduct collective bargaining on their behalf
Within ten days of the parties receiving notification of the ballot from the Industrial Court, you may - in agreement with the union - notify the Industrial Court that you no longer wish a ballot to be held.
The form of ballot
The Industrial Court has to decide whether the ballot should be a workplace ballot, a postal ballot or a combination of the two.
The Industrial Court decision will depend on factors such as:
- costs and practicality
- the preference of the parties
- the chance of the ballot being affected by unfairness or malpractice if it were conducted at a workplace
Conduct in the run up to and during a recognition ballot
If it decides to hold a ballot, the Industrial Court will appoint a qualified independent person (QIP) to conduct it within 20 working days of being appointed - although the Industrial Court has a discretion to choose a longer period.
The QIP will come from a body specified in legislation.
You must:
- Co-operate generally with the union and QIP relating to the ballot.
- Not make an offer to a worker or workers that induces them not to attend a relevant meeting between the union and the workers.
- Not take or threaten to take any action against a worker because they attended or took part in a relevant meeting or they indicated their intention to do so.
- Give the union reasonable access to the workers in the bargaining unit in accordance with the code of practice on access and unfair practices during recognition and derecognition ballots.
- Pass names and addresses of workers in the bargaining unit to the Industrial Court within 10 working days, starting with the day after you were told of the QIP's name and ballot arrangements. You must also give the Industrial Court details of any workers joining or leaving the bargaining unit.
If it is found that you have failed to comply with any of these requirements, the Industrial Court can order you to remedy the failure within a set timescale. If you fail to remedy the failure, the Industrial Court can issue a declaration of recognition.
During the balloting period, the union is entitled to access the workers belonging to the proposed bargaining unit. Both you and the union must not, at this time, use 'unfair practices' to influence the ballot result.
Unfair practices can include:
- providing incentives for members to vote a certain way
- threatening disciplinary action if a certain result is not achieved
Unfair practices complaints
An unfair practices complaint must be made on - or before - the first working day after the date of the ballot or - if votes can be cast on more than one day such as in a postal ballot - the last of those days.
Following a valid complaint, the Industrial Court normally has ten working days in which to decide whether the complaint is well founded, starting with the day after it received the complaint.
If the Industrial Court decides that the complaint is well founded, it will declare this finding and may then issue a remedial order telling the party what steps it must take in order to mitigate the effect of the unfair practice and when to take those steps by, or give notice to the parties that a secret ballot will be held - in effect ordering a new ballot.
Circumstances where a ballot may be abandoned
In some circumstances, the Industrial Court has the power to cancel a ballot and make a declaration that the union is - or is not - recognised.
These circumstances are where the Industrial Court:
- declares that an unfair practice complaint is well founded and that the unfair practice consisted of - or included - the use of violence or the dismissal of a union official
- has issued an unfair practices remedial order and the party to whom it is issued fails to comply with it
- having issued an unfair practices remedial order to a party, makes a further declaration that a complaint that the same party used an unfair practice is well founded
If the 'failing' party is you, the Industrial Court can declare the union recognised. If the failing party is the union, the Industrial Court may declare the union not recognised.
Where it orders a fresh ballot - or declares that the union is recognised or not recognised - the Industrial Court will:
- Take steps to cancel the 'original' ballot. If that ballot is held anyway, the result will not have any effect.
- If a fresh ballot is held, make certain changes to usual ballot procedure.
Informing the parties of the result of the recognition ballot
The Industrial Court informs both parties of the ballot result and its consequences.
To be recognised, the union needs the support of a majority of those voting and at least 40% of those entitled to vote.
If the union fails to get the necessary support, it must wait three years before making a new application involving the same - or substantially the same - bargaining unit.
Once you have recognised a union, the collective bargaining process can begin and you have certain legal obligations towards the union and its members. See the consequences of trade union recognition.
Requests for costs for recognition ballots
Following the ballot, the QIP will normally send you and the union a demand for its costs.
The demand will show the gross costs of the ballot and the share of the cost to be paid by you and the union.
Both parties must pay the QIP within 15 working days, starting with the day after they receive the demand.
If you dispute the demand, you can appeal to an industrial tribunal within four weeks, starting with the day after you receive the demand.
For your appeal to succeed, you must show that the gross costs of the ballot are too great or your share of the costs is too great.
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Statutory derecognition of a trade union owing to reduced size of workforce
Seeking to derecognise a trade union where you employ no more than 20 workers.
You may seek to derecognise a trade union where you employ fewer than 21 workers - including workers with any associated employers - in any period of 13 weeks.
To do this, you must first send a notice to the union.
The notice must be copied to the Industrial Court and:
- identify the bargaining arrangements
- state the date on which the notice is given
- specify the period of 13 weeks in question
- state that you - taken with any associated employer(s) - employed an average of fewer than 21 workers in the specified 13-week period
- state that the bargaining arrangements are to cease to have effect on a specific date, which must fall after the end of a period of 35 working days, day one being the working day following that on which you give the notice
You must give the notice to the union before the end of the fifth working day, starting with the day after the last day of the specified period of 13 weeks.
The Industrial Court's decision on your notice of derecognition
When it receives your notice, the Chairman of the Industrial Court will appoint a panel of three Industrial Court members to consider whether or not it's valid.
The panel has ten working days, starting with the day after that on which the Industrial Court receives the notice, to reach a decision.
If the panel decides that your notice is not valid, it will tell you of this decision and your notice will be treated as if you had not given it. The bargaining arrangements would therefore remain in force.
If the panel decides that your notice is valid, it will tell you of this decision and the bargaining arrangements will then cease to have effect on the date specified in your notice.
The union's challenge to the validity of your notice
The union can challenge the Industrial Court's decision to accept your application for derecognition on the grounds that:
- The 13-week period specified in your notice ended before the relevant date. This is the date the three-year period, starting with the day of the Industrial Court declaration of recognition, expires.
- You - along with any associated employer(s) - did not employ an average of fewer than 21 workers in the 13-week period.
The union's application must be:
- in the proper form and supported by such documents as the Industrial Court may have specified
- copied to you, along with any supporting documents
- made within ten working days, starting with the day after that on which you gave your notice
The Industrial Court's decision on the union's application
The Industrial Court has ten working days - starting with the day after that on which the Industrial Court gave notice of acceptance of the union's application - to reach a decision.
Once you and the union have been given the opportunity to state your views, the Industrial Court will decide on the two issues of whether or not the 13-week period ended before the relevant date or whether you - along with any associated employers - did in fact employ fewer than 21 workers over the specified 13-week period.
If the Industrial Court decides that either the 13-week period ended before the relevant date or you - taken with any associated employers - employed 21 or more workers in that period, your notice shall be treated as not having been given.
If the Industrial Court decides that the 13-week period did not end before the relevant date and that you, taken with any associated employers, employed fewer than 21 workers in that period, the bargaining arrangements will cease to have effect on the 'termination date'.
The termination date will be the date that was specified in your notice to the union or the day after the last day of the Industrial Court's ten-day decision period, whichever is later.
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Statutory derecognition of a trade union owing to lack of support for bargaining arrangements
Derecognising a trade union where the bargaining unit no longer supports the union conducting collective bargaining.
You can - at any time - make a request to a recognised trade union to end collective bargaining arrangements on the grounds that the union no longer has the support of the bargaining unit. The union can decline the request.
However, if the union declines a request after three years of statutory recognition, you can apply to the Industrial Court to hold a secret ballot.
Similarly, where a worker believes that their union no longer has the support of the bargaining unit, they can apply to the Industrial Court to hold a secret ballot - but only after three years of statutory recognition.
Your request to the union for derecognition
To be valid, your request must:
- be in writing
- be received by the union
- identify the bargaining arrangements
- state that the request is made under Schedule 1A of the Trade Union and Labour Relations (Northern Ireland) Order 1995
Once the union receives your request, the union has ten working days to respond, starting with the day after the union receives your request.
If - before the end of the ten-day period - the union agrees to end the bargaining arrangement, the matter ends there.
If the union either fails to respond to your request or - before the end of the ten-day period - tells you that it doesn't accept your request (and does not indicate a willingness to negotiate), you may apply to the Industrial Court for the holding of a secret ballot to decide whether or not collective bargaining should end.
If - before the end of the ten-day period - the union tells you that it doesn't accept your request but is willing to negotiate, you and the union (the parties) have 20 working days - starting with the working day immediately following the end of the ten-day period - to negotiate with a view to agreeing to end the bargaining arrangements.
During this 20-day period, the parties may request the assistance of the LRA in their negotiations. The parties can agree to extend this period as required.
Your application to the Industrial Court
If the parties fail to reach an agreement, you may apply to the Industrial Court for the holding of a secret ballot to decide whether or not the bargaining arrangements should end.
The Industrial Court will only accept your ballot application if:
- it is made in the proper form
- you have copied the application and any supporting documents to the union
- at least 10 per cent of the workers in the bargaining unit favour derecognition
- a majority of the workers in the bargaining unit are likely to favour derecognition
- there hasn't been a previous application for an end to the bargaining arrangements in the last three years
The Industrial Court's decision following your application
Starting with the day after that on which it receives your application, the Industrial Court normally has ten working days in which to decide whether or not:
- your request to the union is valid
- you negotiated properly with the union if you were required to do so
- your application to the Industrial Court is admissible
If the Industrial Court decides that you have failed to meet any or all of these requirements, it will not accept the application and the issue ends there.
If the Industrial Court decides that you have met all of these requirements, it will accept your application and arrange for the holding of a secret ballot - see statutory derecognition of a trade union - derecognition ballots.
In reaching its decision, the Industrial Court panel may, where it considers it appropriate, convene a hearing. The parties will be invited to attend and present evidence to the panel.
A worker's application to the Industrial Court
Where a worker believes that their union no longer has the support of the bargaining unit, they can apply to the Industrial Court to hold a secret ballot to determine whether or not collective bargaining arrangements should end.
A worker can only make such an application after three years of statutory recognition. However, unlike employers, they do not need to first make a request to the union (or even the employer) to end bargaining arrangements.
The Industrial Court will only accept the worker's ballot application if:
- it is made in the proper form
- they have copied the application and any supporting documents to both you and the union
- at least 10 per cent of the workers in the bargaining unit favour derecognition
- a majority of the workers in the bargaining unit are likely to favour derecognition
- there hasn't been a previous application for an end to the bargaining arrangements in the last three years
The Industrial Court's decision following the worker's application
Starting with the day after that on which it receives the worker's application, the Industrial Court normally has ten working days in which to decide whether or not the worker's application to the Industrial Court is admissible.
If the Industrial Court decides that the worker's application is not admissible, it won't accept the application and the issue ends there.
If the Industrial Court decides that the worker's application is admissible, it will accept the application. The Industrial Court will then give notice of this acceptance decision to you, the worker and the union.
In reaching its decision, the Industrial Court panel may, where it considers it appropriate, convene a hearing. The parties will be invited to attend and present evidence to the panel.
The consequences of the Industrial Court accepting the worker's application
Where the Industrial Court accepts a worker's application, it normally has 20 working days - starting with the day after the Industrial Court gives notice that it has accepted the application - to help you, the union and the worker negotiate with a view to either agreeing that the worker will withdraw the application, or reaching an agreement that the parties will end the bargaining arrangements.
If - in the 20-day period - the parties agree to end the bargaining arrangements or the worker agrees to withdraw the application, the Industrial Court will cease its considerations.
If the parties fail to reach an agreement in the 20-day period, the Industrial Court must arrange for the holding of a secret ballot - see statutory derecognition of a trade union - derecognition ballots.
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Statutory derecognition of a trade union: falling union membership in the bargaining unit
Seeking to derecognise a trade union where union membership in the bargaining unit falls below half.
Sometimes, a trade union obtains statutory recognition without a ballot because more than 50% of the bargaining unit were union members.
If you recognised a union under these circumstances but you believe that union membership in the bargaining unit has since fallen to below 50%, you can - after at least three years of recognition - apply to the Industrial Court to hold a secret ballot to decide whether recognition should end.
Your request to the union
Before applying to the Industrial Court, you must make a request to the union, asking it to voluntarily end collective bargaining arrangements.
To be valid, your request must:
- be in writing
- be received by the union
- identify the bargaining arrangements
- state that fewer than half the workers in the bargaining unit are members of the union
- state that the request is made under Schedule 1A of the Trade Union and Labour Relations (Northern Ireland) Order 1995
Once the union receives your request, you and the union - 'the parties' - have ten working days, starting with the day after the union receives your request, to agree to end the bargaining arrangements.
During this ten-day period, the parties may request the assistance of the LRA in their negotiations. The parties can agree to extend this period as required.
If - before the end of this period - the parties agree to end the bargaining arrangements, the matter ends there.
Your application to the Industrial Court
If the parties fail to agree to end the bargaining arrangements before the end of the ten-day period, you may apply to the Industrial Court for the holding of a secret ballot to decide whether or not collective bargaining should end.
The Industrial Court will only accept your ballot application if:
- it is made in the proper form
- you have copied the application and any supporting documents to the union
- fewer than half the workers in the bargaining unit are members of the union
- there hasn't been a previous application for an end to the bargaining arrangements in the last three years
The Industrial Court's decision following your application
Starting with the day after it receives your application, the Industrial Court normally has ten working days to decide whether or not your request to the union is valid or your application to the Industrial Court is admissible.
If the Industrial Court decides that you have failed to meet either or both of these requirements, it will not accept your application, and the issue ends there.
If the Industrial Court decides that you have met both of these requirements, it will accept your application and arrange for the holding of a secret ballot - see statutory derecognition of a trade union - derecognition ballots.
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Derecognition of a non-independent trade union
How workers may ask the Industrial Court to end collective bargaining with a union that is not certified as independent.
Workers may use the statutory procedure to seek to derecognise a non-independent trade union that their employer has voluntarily recognised.
The reason for derecognition must be that the majority of workers in the bargaining unit do not support the recognition arrangements.
In this case, a worker - or workers - from the bargaining unit can apply to the Industrial Court for derecognition.
The Industrial Court will only accept the application if it believes that:
- the union is not independent - ie it does not have a certificate of independence from the Certification Officer
- at least 10% of the workers in the bargaining unit favour derecognition
- a majority of the workers in the bargaining unit are likely to favour derecognition
If the Industrial Court accepts the application, it will try to help the employer, worker(s) and union to reach an agreement on derecognition.
If an agreement is not reached, the Industrial Court will arrange a secret ballot - see statutory derecognition of a trade union - derecognition ballots.
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Statutory derecognition of a trade union - derecognition ballots
How the Industrial Court arranges ballots where an employer or worker makes a request to derecognise a trade union.
Following a request for statutory derecognition, the Industrial Court may call for a secret ballot to determine whether or not collective bargaining arrangements should end.
Once the Industrial Court has told you and the union - 'the parties' - in writing that there will be a ballot, the parties should negotiate and agree access arrangements for the union during the ballot period and send a copy of the access agreements to the Industrial Court case manager.
Where necessary, the Industrial Court may arrange a hearing on access so that it can determine an access arrangement.
The form of ballot
The Industrial Court has to decide whether the ballot should be a workplace ballot, a postal ballot or a combination of the two.
The Industrial Court decision will depend on factors such as:
- costs and practicality
- the preference of the parties
- the chance of the ballot being affected by unfairness or malpractice if it were conducted at a workplace
Conduct in the run up to and during a recognition ballot
If it decides to hold a ballot, the Industrial Court will appoint a qualified independent person (QIP) to conduct it within 20 working days of being appointed - although the Industrial Court has discretion to choose a longer period.
The QIP will come from a body specified in legislation.
You must:
- Co-operate generally with the union and QIP relating to the ballot.
- Not make an offer to a worker or workers that induces them not attending a relevant meeting between the union and the workers.
- Not take or threaten to take any action against a worker because they attended or took part in a relevant meeting or they indicated their intention to do so.
- Give the union reasonable access to the workers in the bargaining unit in accordance with the code of practice on access and unfair practices during recognition and derecognition ballots.
- Pass names and addresses of workers in the bargaining unit to the Industrial Court within ten working days, starting with the day after you were informed of the QIP's name and ballot arrangements. You must also give the Industrial Court details of any workers joining or leaving the bargaining unit.
If it is found that you have failed to comply with any of the duties above, the Industrial Court can order you to remedy the failure within a set timescale. If you fail to remedy the failure, the Industrial Court can refuse your application for derecognition.
During the balloting period, the union is entitled to access the workers belonging to the bargaining unit. Both you and the union must not, at this time, use 'unfair practices' to influence the ballot result.
Examples of unfair practices include offering money to a worker to vote in a particular way and dismissing - or threatening to dismiss or take disciplinary action against - a worker for voting in the ballot.
Unfair practices complaints
An unfair practices complaint must be made on - or before - the first working day after the date of the ballot or - if votes can be cast on more than one day such as in a postal ballot - the last of those days.
Following a valid complaint, the Industrial Court normally has ten working days in which to decide whether the complaint is well founded, starting with the day following receipt of the complaint.
If the Industrial Court decides that the complaint is well founded, it will declare this finding and may then issue a remedial order telling the party what steps it must take in order to mitigate the effect of the unfair practice and when to take those steps by, and/or give notice to the parties that a secret ballot will be held - in effect ordering a new ballot.
Circumstances where a ballot may be abandoned
In some circumstances, the Industrial Court has the power to cancel a ballot and:
- if the party concerned is you, refuse your application for derecognition
- if the party concerned is the union, issue a declaration that collective bargaining is to end
These circumstances are where the Industrial Court:
- declares that both an unfair practice complaint is well founded and the unfair practice consisted of - or included - the use of violence or the dismissal of a union official
- has issued to a party an unfair practices remedial order but the party fails to comply with it
- having issued an unfair practices remedial order to a party, declares that a complaint that the same party used an unfair practice is well founded
If the 'failing' party is you, the applicant worker and/or the union may enforce obedience to the law.
Where it orders a fresh ballot, refuses your application or declares an unfair practice complaint as well founded, the Industrial Court will:
- Take steps to cancel the 'original' ballot. If that ballot is held anyway, the result will not have any effect.
- If a fresh ballot is held, make certain changes to the usual ballot procedure.
Informing the parties of the result of the recognition ballot
The Industrial Court will inform the parties of the ballot result and its consequences.
In order for collective bargaining arrangements to end as the result of a ballot, a majority of those voting, and at least 40 per cent of the workers in the bargaining unit, must vote in favour of ending those arrangements.
If you fail to get the necessary support, you must wait three years before making a new application involving the same - or substantially the same - bargaining unit.
If the union is derecognised as a result of the ballot, the Industrial Court will declare that the bargaining arrangements are to cease to have effect on a specified date.
The Industrial Court cannot accept any applications for statutory recognition from the union in respect of that bargaining unit - or one substantially the same - if the union makes the application within three years of the day after that on which the Industrial Court issued its declaration.
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Meaning and types of trade union recognition
In this guide:
- Recognising and derecognising a trade union
- Meaning and types of trade union recognition
- Voluntary recognition of a trade union
- Statutory recognition of a trade union - starting the procedure
- The consequences of trade union recognition
- Voluntary trade union recognition within the statutory procedure
- Statutory derecognition of a trade union - an introduction
- Procedure where the bargaining unit is no longer appropriate or has ceased to exist
- Workers' rights in relation to trade union recognition or derecognition
- Statutory recognition of a trade union - applying to the Industrial Court
- Statutory recognition of a trade union - deciding on the bargaining unit
- Statutory recognition of a trade union - recognition ballots
- Statutory derecognition of a trade union owing to reduced size of workforce
- Statutory derecognition of a trade union owing to lack of support for bargaining arrangements
- Statutory derecognition of a trade union: falling union membership in the bargaining unit
- Derecognition of a non-independent trade union
- Statutory derecognition of a trade union - derecognition ballots
Meaning and types of trade union recognition
A summary of voluntary and statutory recognition, and what recognition means for both the employer and the union.
A trade union is said to be recognised once an employer has agreed to negotiate with it on pay and working conditions on behalf of a particular group of workers.
The subsequent negotiation process is known as collective bargaining, with the group of workers the union represents referred to as the bargaining unit.
If an employer agrees to recognise a trade union the employer has certain legal obligations towards the union and its members - see the consequences of trade union recognition.
Voluntary trade union recognition
The most common way a union can gain recognition for collective bargaining purposes is by the employer simply agreeing to recognise it voluntarily.
In practice this means the union becomes recognised by the employer without using any legal procedures. See voluntary recognition of a trade union.
Statutory trade union recognition
If an employer and trade union find they are unable to come to a voluntary recognition agreement, a trade union can make an application for statutory recognition. This only applies where the employer, together with any associated employers, employs 21 or more workers.
See statutory recognition of a trade union - starting the procedure.
Note that there can be voluntary agreements even after the union has triggered the statutory process - see voluntary recognition within the statutory procedure.
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Voluntary recognition of a trade union
Recognising trade unions - the voluntary option.
As an employer, there is nothing to stop you from voluntarily agreeing to recognise one or more trade unions.
Most union recognition arrangements are established in this way. Such voluntary recognition provides maximum flexibility to the parties and avoids them having to use the alternative - potentially complex - statutory recognition procedures.
Once an employer recognises a union for the first time, the two parties will usually draw up an agreement which specifies how the recognition arrangement, and its associated bargaining processes, will work.
Formal written agreements of this kind - known as 'procedural' agreements - prevent misunderstanding and achieve continuity and consistency. As relationships develop, the parties may periodically wish to revise and update their procedural agreements. The Labour Relations Agency (LRA) can facilitate meetings to assist the parties in drafting procedural and recognition agreements.
The LRA can also provide impartial information on bargaining agreements. See LRA guidance on collective bargaining.
If you voluntarily recognise a union, you will have certain legal obligations towards the union and its members. See the consequences of trade union recognition.
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Statutory recognition of a trade union - starting the procedure
How trade unions can obtain statutory recognition.
If you find you are unable to come to a voluntary recognition agreement with the trade union, it can make an application for statutory recognition. This only applies where you - together with any associated employers - employ 21 or more workers.
The union's request must:
- clearly identify the union and the bargaining unit
- state that the request is made under the Employment Relations (NI) Order 1999
You have ten working days to respond, starting with the first working day after the day you receive the request.
If you agree to the request, you have formally recognised the trade union for collective bargaining purposes.
If you reject the request or fail to respond in time, the union can apply to the Industrial Court for statutory recognition - see statutory recognition of a trade union - applying to the Industrial Court.
Negotiations with the union following its request
If you tell the union that you don't accept the request but are willing to negotiate, you have 20 working days to agree on the appropriate bargaining unit and to agree on recognition. The Labour Relations Agency (LRA) may also be of assistance.
The 20-day period starts on the day after the first ten-day period ends. You can agree with the union to extend the 20-day period.
If you fail to reach an agreement at the end of that period - or you agree on a bargaining unit but don't agree to recognise the union - the union can apply to the Industrial Court.
If - following negotiations between you and the union - the union's proposed bargaining unit is modified but you fail to agree on the bargaining unit, the union must make a new request to you that complies in full with the statutory requirements before it can make an application to the Industrial Court.
You can reach a voluntary agreement with the union even after the statutory process has started - see voluntary recognition within the statutory procedure.
If you reach an agreement, the statutory procedure ends.
Approaching LRA for help
You or the union can approach the LRA for help at any time. The LRA can provide its conciliation services to assist the parties in reaching agreement.
If you propose to the union that the LRA helps but the union fails to respond within ten working days or rejects your proposal, the union cannot make any application to the Industrial Court. The ten-day period starts on the day after that on which you made your proposal.
You have to make this proposal within ten working days of informing the union that you are willing to negotiate. This period starts on the day after you so inform the union.
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The consequences of trade union recognition
What an employer and union must do once the union has become recognised.
There are a number of consequences once a trade union becomes recognised.
Many apply regardless of whether recognition was voluntary, semi-voluntary or statutory. However, some are only relevant where a union uses the statutory procedure.
Making arrangements for the conduct of collective bargaining
Once a union has achieved recognition, either via a voluntary or the statutory procedure, you and the union - 'the parties' - need to agree how you will conduct collective bargaining.
Such an agreement could cover the following issues:
- bargaining procedure
- how and when meetings will be arranged
- who the employer and union representatives are
- time off for union representatives to attend meetings
- how agreements and disagreements will be communicated to the workforce
- conduct during negotiations - how and when issues can be raised
- the specific matters which will be subject to joint agreement, eg pay and working hours
- dispute resolution - what should happen if deadlock is reached on a particular issue, eg conciliation and arbitration
- union recruitment activities in the workplace
- union representation of workers at disciplinary and grievance hearings
- deduction of union contributions from employees' wages
Deciding what a collective agreement will cover
Collective agreements usually cover pay arrangements and other terms and conditions of employment. They might also cover such matters as:
- matters of discipline
- trade union membership or non-membership
- facilities for officials of trade unions
The procedural agreement should set out the level at which negotiations will take place, eg site, company, regional or national level.
It should also specify the bargaining methods where two or more unions are recognised, eg whether unions should bargain separately or as a single bargaining unit.
The parties usually need training on aspects of employment relations and the bargaining process. Some trade unions and independent organisations provide accredited courses.
Usually, collective agreements are not in themselves legally enforceable. However, parts of collective agreements such as pay rates, or references to agreements, may be inserted and thus legally incorporated into the employment contracts of individual employees. Because individual employment contracts are legally enforceable, many collective agreements are indirectly underpinned by law.
Legal consequences of statutory trade union recognition
Once the Industrial Court declares that a union is recognised, the union is entitled to conduct collective bargaining with you on pay, hours and holidays - although the parties can agree to cover additional issues.
The parties must first agree on how they will conduct collective bargaining, calling on the services of the Labour Relations Agency (LRA) if necessary.
If no agreement is reached within 30 working days, either party has the right to apply to the Industrial Court for assistance.
The Industrial Court has 20 working days from the application date to help achieve an agreement. If no agreement is reached, the Industrial Court will impose a legally binding method of bargaining.
However, the imposed method of collective bargaining can be modified by the parties, providing they both agree.
If the imposed method is not followed, either party can apply to a court to order the other party to act in accordance with the prescribed method.
If this order is ignored by the relevant party, that party will be in contempt of court, and may face a fine or imprisonment.
Where the Industrial Court has imposed a method for carrying out collective bargaining, the union has the right to be consulted by you on your policies and plans for training workers in the bargaining unit at least once every six months.
If you fail to meet these consultation obligations, the union has three months to make a complaint to an industrial tribunal. If the tribunal finds the complaint well founded, it may award up to two weeks' pay to each affected worker.
Note that there is a statutory limit on a week's pay. See a table of current tribunal and arbitration compensation limits.
Disclosing information to trade unions
You have a duty to disclose - if requested - relevant information to a recognised trade union during the collective bargaining process.
The LRA has a code of practice on disclosure of information to trade unions for collective bargaining purposes. The code imposes no legal obligations on you to disclose any specific item of information and failure to observe the code does not by itself mean you would be liable to legal proceedings.
However, the law requires any relevant provisions to be taken into account in proceedings before the Industrial Court.
General legal consequences of trade union recognition
Once a union becomes recognised, you have a legal duty to:
- allow lay union representatives to take reasonable time off with pay to perform their duties
- allow members covered by the recognition arrangements the right to reasonable unpaid time off to carry out trade union activities
- allow union learning representatives time off with pay to carry out their duties
For more on time-off rights for union representatives and members, see trade union membership rights.
You also have a legal duty to:
- inform and consult the union during collective redundancy situations and business transfers - see redundancy: the options and responsibilities to employees if you buy or sell a business
- inform and consult the union on certain changes to your occupational pension scheme - if you operate one - or employees' personal pension schemes if you contribute to them - see keeping employees informed
- allow the union to appoint health and safety representatives, with whom it has to consult on workplace health and safety issues - see how to consult your employees on health and safety
All these obligations apply regardless of whether the recognition was via the statutory or voluntary route.
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Voluntary trade union recognition within the statutory procedure
Voluntary agreement for union recognition within a statutory context.
If, during the statutory trade union recognition procedure, you voluntarily agree to recognise a union, it may withdraw its request for statutory recognition.
Alternatively, if the union had made an application to the Industrial Court, you and the union - 'the parties' - may have jointly asked the Industrial Court to take no further action.
However, this must happen before the Industrial Court either makes a declaration that the union is entitled to recognition without a ballot, or arranges a recognition ballot. See statutory recognition of a trade union - starting the procedure.
This type of agreement is known as an agreement for recognition or a semi-voluntary agreement. It is not the same as a voluntary agreement made outside the statutory procedure.
Once an agreement for recognition has been reached, the parties must enter into negotiations on collective bargaining arrangements.
If they can't agree on an appropriate method, either party may apply to the Industrial Court for help. The Industrial Court can assist if it is satisfied that there is an 'agreement for recognition' as defined in the legislation.
If the parties still fail to reach agreement, the Industrial Court will impose a method for collective bargaining.
Duration of recognition
Once you have agreed to recognise a trade union for collective bargaining purposes, the union may terminate the agreement at any time, unless you have previously agreed with the union to the contrary.
You may not terminate the agreement for a period of three years unless you have agreed with the union to the contrary.
For the circumstances under which a union may become derecognised, see statutory derecognition of a trade union - an introduction.
If the agreement becomes difficult to maintain, either party can apply to the LRA to help it resolve the difficulties.
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Statutory derecognition of a trade union - an introduction
Procedures to be followed when a trade union with statutory recognition may be derecognised
If a union achieved recognition via the statutory procedure, certain procedures have to be followed for it to be derecognised.
However, you can only seek statutory derecognition three or more years after recognition was originally granted.
There are three main grounds for derecognition:
- you - taken with any associated employers - no longer employ 21 or more workers
- application by the employer or by a worker or workers where it is believed that there is no longer majority support for bargaining arrangements
- union membership in the bargaining unit falls below 50 per cent
In situations where grounds 2 or 3 apply and an application for derecognition is accepted by the Industrial Court, the Industrial Court could declare that a derecognition ballot be held.
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Procedure where the bargaining unit is no longer appropriate or has ceased to exist
What happens if the bargaining unit becomes inappropriate because the employer's business changes.
A situation may arise when a union or employer feels that the bargaining unit - the group of workers the union represents - is no longer appropriate or has ceased to exist. Either party may apply to the Industrial Court to determine what bargaining unit is appropriate.
In order for the Industrial Court to reach its decision, the bargaining unit must have changed because of one or more of the following:
- the business' activities
- the organisation or structure of the business
- the number of workers in the bargaining unit
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Workers' rights in relation to trade union recognition or derecognition
Treating workers fairly as regards the recognition or derecognition of a trade union.
Workers have certain rights relating to their involvement in recognition and derecognition procedures.
Protection from detrimental treatment and unfair dismissal
An employer must not subject a worker to a detriment on grounds related to the process of union recognition or derecognition, eg for taking part in a recognition ballot or for campaigning for recognition.
Detriment is broadly defined but essentially means that the worker should not suffer disadvantage on account of any act or omission by you. This could include:
- suspending the worker
- cutting their pay
- moving them to new duties
- failing to give them a pay rise
For a worker who isn't an employee, their dismissal may also count as a detriment. Only employees can claim unfair dismissal.
If any of the above occurs, a worker could bring a claim before an industrial tribunal. If the tribunal finds that you acted unlawfully, it may award compensation.
If an employee is dismissed or selected for redundancy on grounds relating to union recognition or derecognition, they may be able to make a claim for unfair dismissal to the tribunal.
Rights regarding inducements to disapply collective agreements
Many members of trade unions have their pay and other terms and conditions of employment set by a collective agreement negotiated by their union and their employer.
These members have rights to ensure that the employer does not interfere between the union member and their union in certain matters related to collective bargaining.
An employee or other worker who is a member of an independent trade union which is recognised by - or seeking recognition from - their employer for collective bargaining purposes has the right not to have certain offers made to them by their employer.
This is in circumstances where the employer's sole or main purpose is to achieve the result that, if the offer and like offers to other workers are accepted, all or any of those workers' terms and conditions will no longer be determined by a collective agreement negotiated by or on behalf of the trade union.
In addition, an employee has the right not to be dismissed, or selected for redundancy, by their employer on the grounds that they did not accept any such offer.
An employee or other worker has the right not to be subjected to a detriment for failing to accept any such offer.
Right of complaint to an industrial tribunal
Individuals who think that any of their rights as set out above have been infringed can complain to an industrial tribunal.
If an employee has been dismissed - including cases where they have been dismissed on grounds of redundancy - their complaint is one of unfair dismissal.
If an employee or other worker considers that they have been subjected to a detriment by their employer, their complaint is one of detriment.
If an employee or other worker considers that you have made an unlawful inducement as described above, their complaint is one of unlawful inducement.
Compensation
There are certain limits on the compensatory awards for the claims in relation to dismissal, detriment and unlawful inducements. See a table of current tribunal and arbitration compensation limits.
Note that in cases where an employee or other worker makes a related complaint to the tribunal concerning detriment, and the tribunal upholds that complaint, the tribunal may award compensation for the detriment suffered.
In deciding the amount of such compensation, the tribunal will not take into account the fact that:
- a complainant contributed to their loss by accepting or not accepting an unlawful inducement
- the complainant has received or is entitled to an award on the grounds that an unlawful inducement has been made to them
Status of contractual changes resulting from unlawful inducements
If an unlawful inducement has been accepted by an employee or other worker, but any consequent agreement by them to vary their terms and conditions has not yet been effected, the agreement to vary the terms and conditions is not enforceable.
Also, in such circumstances, the employer cannot recover any cash paid or other benefits conferred on the employer or worker concerned.
However, in cases where the agreed variation in terms and conditions have been effected, those variations are enforceable.
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Statutory recognition of a trade union - applying to the Industrial Court
How the Industrial Court deals with unions' applications for recognition under the statutory procedure.
A union can apply to the Industrial Court if it sends you a request for statutory recognition but you either reject the request, or following negotiations between you and the union - 'the parties' - you fail to agree on the bargaining unit.
Industrial Court panels
A panel of three Industrial Court members will be convened to deal with each application. The panel will consist of:
- the Industrial Court Chairman or Deputy Chairman
- one member with experience as a representative of employers
- one member with experience as a representative of workers
The individuals making up the panel could change if one becomes unavailable.
An Industrial Court official will be appointed to act as case manager for the application. They act as the main point of contact between you, the panel and the union.
Admissibility tests for union applications to the Industrial Court
In order for the Industrial Court to accept an application for recognition from a trade union, it must be:
- on the proper Industrial Court application form
- copied and sent to you, together with any supporting documents
The following conditions must also apply:
- The union must have a certificate of independence from the Certification Office.
- As the employer, you - together with any associated employer(s) - must employ at least 21 workers. Part-time workers count as whole numbers.
- There must not be a competing application relating to the same or overlapping bargaining units.
- There must not be an existing recognition agreement under which a union is entitled to conduct collective bargaining on behalf of any workers in the proposed bargaining unit.
- At least 10% of the workers in the proposed bargaining unit must belong to the union making the application.
- The majority of workers must be likely to favour recognition. Evidence of this could be a petition from workers.
- If the application is made by more than one union, the unions concerned must show that they will co-operate with each other to achieve stable collective bargaining arrangements.
- There must not have been a previous application from the same union covering the same - or substantially the same - bargaining unit accepted by the Industrial Court within the last three years.
On receiving an application, the Industrial Court will send you:
- notification that it has received the application
- a questionnaire for you to fill in to give it information relating to the admissibility criteria
The Industrial Court has ten working days to decide whether or not to accept the application.
Industrial Court acceptance of the union's application
If the Industrial Court accepts a trade union's application for statutory recognition, the parties have 20 days - which may be extended or reduced if the Industrial Court decides there is no reasonable chance of agreement between the parties - to agree on the appropriate bargaining unit.
In these circumstances, you must provide the following information to both the Industrial Court and the union within five working days, starting with the day after that on which you received notice of the acceptance:
- A list of the categories of worker in the proposed bargaining unit.
- The number of workers you reasonably believe are in each of the categories at each of the workplaces.
- A list of the workplaces at which they work. A workplace is the set of premises a person works at/from, or - where there are no such premises - the premises with which the worker's employment has the closest connection.
The information you give to the union and the Industrial Court must be the same and as accurate as is reasonably practicable in light of the information you have at the time.
If you fail to supply the required information - or fail to provide it in accordance with the statutory criteria - the union can request that the Industrial Court itself decides the bargaining unit.
If the Industrial Court agrees that you have failed to comply with this duty, it will decide the bargaining unit - usually within ten working days starting with the day after that on which the union made the request.
Union communications with workers following the Industrial Court's acceptance of the application
Where the Industrial Court accepts an application, the union may want to communicate with workers who are in the proposed or agreed bargaining unit.
To do so, the union must apply in writing to the Industrial Court asking it to appoint a suitable independent person (SIP) to handle these communications.
The Industrial Court will appoint the SIP as soon as possible after the union's request and will then notify the name, and appointment date, of the appointed person to the parties.
Once the Industrial Court appoints a SIP, you must - as soon as reasonably practicable - provide certain information to the Industrial Court that will enable the SIP to fulfil their role.
This information is as follows:
- The names and home addresses of the 'relevant workers'. You must do this within ten working days, starting with the day after that on which you are informed of the name and date of appointment of the SIP. Relevant workers are either those falling within the proposed bargaining unit or - if a bargaining unit has already been agreed by the parties or decided by the Industrial Court - those within that bargaining unit.
- If you have given the Industrial Court the names of workers in the proposed bargaining unit and then either you and the union agree on a different bargaining unit or the Industrial Court decides the bargaining unit, you must give the Industrial Court the names and home addresses of those who are now the 'relevant workers', ie those workers who fall within the different bargaining unit. You must do this within ten working days, starting with the day after that on which you and the union agree on the bargaining unit or the Industrial Court informs you of its decision on the bargaining unit.
- The name and home address of any worker who subsequently joins the bargaining unit after you supply the initial list.
- The details of any worker who ceases to be a 'relevant worker' because they have left the bargaining unit - except where a new complete list is supplied because the definition of the bargaining unit changes.
If you fail to comply with these duties, the Industrial Court may order you to remedy the failure within a set timescale.
If you fail to comply with the order, the Industrial Court may issue a notice to you and the union confirming that you have failed to comply with the order and may also declare that the union is recognised.
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Statutory recognition of a trade union - deciding on the bargaining unit
How the Industrial Court may help you and the union decide on the appropriate bargaining unit.
If the Industrial Court accepts a trade union's application for statutory recognition but you and the union - 'the parties' - fail to agree on the bargaining unit, the Industrial Court panel must try to help the parties reach agreement on what the appropriate bargaining unit is.
It is important that the parties are clear as to which workers are included in the bargaining unit. This is because if - at a later stage in the process - a ballot is held, both the parties and the Industrial Court will need to know exactly which workers are entitled to receive a ballot paper.
To reach a decision on the bargaining unit, the Industrial Court may:
- itself mediate between the parties
- suggest the parties seek help from the LRA
- allow the parties - if they prefer - to conduct these negotiations between themselves directly
The Industrial Court has a period of 20 working days (the appropriate period) in which to try to help the parties reach an agreement. The period starts with the day following that on which the Industrial Court gives notice that it has accepted the trade union's application - see statutory recognition of a trade union - applying to the Industrial Court.
The Industrial Court can extend the appropriate period or bring it to an end if it believes that the parties are unlikely to reach an agreement. In addition, both parties can apply to the Industrial Court to bring the appropriate period to an early end.
Failure to agree on the appropriate bargaining unit
If the parties cannot agree on the bargaining unit or the union asks the Industrial Court to decide on the bargaining unit as set out in statutory recognition of a trade union - applying to the Industrial Court, the Industrial Court must decide within a period of ten working days whether or not the union's proposed bargaining unit is appropriate.
If the Industrial Court decides that the union's proposed bargaining unit is not appropriate, it must decide on a bargaining unit which is appropriate.
To make its decision, the Industrial Court has to consider:
- the location of workers
- the views of both parties
- existing national and local bargaining arrangements
- the preference to avoid small, fragmented bargaining units
- the characteristics of workers in the proposed bargaining unit and any other workers the Industrial Court considers relevant
- the need for the unit to be compatible with effective management - this factor takes priority over all the others
The Industrial Court may ask you and the union for your views on these issues - eg any views you may have on an alternative bargaining unit to the one proposed by the union.
If there is conflicting evidence on whether the union's proposed bargaining unit is appropriate, the Industrial Court panel is likely to call a hearing to determine the question.
Where the agreed or decided bargaining unit differs from the one initially proposed
Whether a bargaining unit is agreed between the parties or is decided by the Industrial Court, if that bargaining unit is different from the one proposed in the union's initial application for statutory recognition, the Industrial Court has to determine whether or not the new bargaining unit is 'valid'.
The bargaining unit will only be valid if:
- there is at least 10 per cent union membership in the new bargaining unit
- a majority of workers in the new bargaining unit is likely to favour recognition
- there is not a competing application including any workers covered by the new bargaining unit
- there is not an existing agreement under which a union can conduct collective bargaining on behalf of any workers in the new bargaining unit
- there has not been a previous application from the same union covering the same - or substantially the same - bargaining unit within the last three years
Following any necessary investigations, the Industrial Court panel may call a hearing to determine the validity of the revised bargaining unit. It normally has ten working days to reach its decision.
If - as a result of changes to the bargaining unit - the application does not meet the applied validity tests, the Industrial Court cannot proceed with the union's application.
However, the union can re-apply for statutory recognition of this revised bargaining unit within three years.
Industrial Court hearings
The Industrial Court will normally arrange hearings as quickly as possible in order to meet its statutory deadlines. This may mean imposing a hearing date even if it's not the most convenient date for either or both parties.
The Industrial Court expects that hearings will normally be completed in a day. The Industrial Court is based in Belfast, but it may hold hearings at other, more convenient locations. Hearings are normally informal and held in public.
Before a hearing, the chairman of the Industrial Court panel may hold a preliminary meeting in order to set out procedures and identify the issues disputed.
The Industrial Court will ask the parties to submit and exchange written evidence before the hearing.
The Industrial Court will only allow new evidence at hearings for good reasons and at the discretion of the panel. Where it is admitted, parties can request that the panel allows some additional time - such as a short adjournment - to consider the new evidence.
The Industrial Court will ask the parties to inform the panel in advance of the names of the speakers and any witnesses proposed for the hearing. The parties may appoint legal representatives but there is no obligation to do so.
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Statutory recognition of a trade union - recognition ballots
What happens when a vote is needed to confirm support for trade union recognition.
Once the Industrial Court accepts an application and the bargaining unit has been agreed on or decided, the Industrial Court panel has to decide whether to call a ballot on union recognition.
Industrial Court's decision on whether or not to hold a recognition ballot
The main test is the level of union membership in the bargaining unit. If the Industrial Court panel is not satisfied that the majority of the workers in the bargaining unit belong to the union making the application, it has to call a ballot on union recognition.
If necessary, the Industrial Court panel can require:
- you to provide information concerning the workers in a bargaining unit
- the union to provide information concerning the union members in a bargaining unit
Using this information, the Industrial Court case manager will compile a report and send a copy to you, the panel and the union.
If either you or the union fail to supply the information required by the Industrial Court, the report must mention that failure and this could influence the panel's decision.
On receiving the report, the Industrial Court will then decide whether to make a declaration of recognition or hold a ballot of workers in the bargaining unit.
Generally, if the report shows that a majority of the workers in the bargaining unit are union members, the Industrial Court will make a declaration of recognition. If not, it will call a ballot.
However, the Industrial Court may still call a ballot - even if there is majority union membership - if:
- it is satisfied that holding a ballot would be in the interests of good industrial relations
- it believes it has credible evidence from a significant number of union members in the bargaining unit that they do not want the union to conduct collective bargaining on their behalf
- there is evidence relating to how workers joined the union or their length of membership that leads the Industrial Court to doubt whether a significant number of union members in the bargaining unit want the union to conduct collective bargaining on their behalf
Within ten days of the parties receiving notification of the ballot from the Industrial Court, you may - in agreement with the union - notify the Industrial Court that you no longer wish a ballot to be held.
The form of ballot
The Industrial Court has to decide whether the ballot should be a workplace ballot, a postal ballot or a combination of the two.
The Industrial Court decision will depend on factors such as:
- costs and practicality
- the preference of the parties
- the chance of the ballot being affected by unfairness or malpractice if it were conducted at a workplace
Conduct in the run up to and during a recognition ballot
If it decides to hold a ballot, the Industrial Court will appoint a qualified independent person (QIP) to conduct it within 20 working days of being appointed - although the Industrial Court has a discretion to choose a longer period.
The QIP will come from a body specified in legislation.
You must:
- Co-operate generally with the union and QIP relating to the ballot.
- Not make an offer to a worker or workers that induces them not to attend a relevant meeting between the union and the workers.
- Not take or threaten to take any action against a worker because they attended or took part in a relevant meeting or they indicated their intention to do so.
- Give the union reasonable access to the workers in the bargaining unit in accordance with the code of practice on access and unfair practices during recognition and derecognition ballots.
- Pass names and addresses of workers in the bargaining unit to the Industrial Court within 10 working days, starting with the day after you were told of the QIP's name and ballot arrangements. You must also give the Industrial Court details of any workers joining or leaving the bargaining unit.
If it is found that you have failed to comply with any of these requirements, the Industrial Court can order you to remedy the failure within a set timescale. If you fail to remedy the failure, the Industrial Court can issue a declaration of recognition.
During the balloting period, the union is entitled to access the workers belonging to the proposed bargaining unit. Both you and the union must not, at this time, use 'unfair practices' to influence the ballot result.
Unfair practices can include:
- providing incentives for members to vote a certain way
- threatening disciplinary action if a certain result is not achieved
Unfair practices complaints
An unfair practices complaint must be made on - or before - the first working day after the date of the ballot or - if votes can be cast on more than one day such as in a postal ballot - the last of those days.
Following a valid complaint, the Industrial Court normally has ten working days in which to decide whether the complaint is well founded, starting with the day after it received the complaint.
If the Industrial Court decides that the complaint is well founded, it will declare this finding and may then issue a remedial order telling the party what steps it must take in order to mitigate the effect of the unfair practice and when to take those steps by, or give notice to the parties that a secret ballot will be held - in effect ordering a new ballot.
Circumstances where a ballot may be abandoned
In some circumstances, the Industrial Court has the power to cancel a ballot and make a declaration that the union is - or is not - recognised.
These circumstances are where the Industrial Court:
- declares that an unfair practice complaint is well founded and that the unfair practice consisted of - or included - the use of violence or the dismissal of a union official
- has issued an unfair practices remedial order and the party to whom it is issued fails to comply with it
- having issued an unfair practices remedial order to a party, makes a further declaration that a complaint that the same party used an unfair practice is well founded
If the 'failing' party is you, the Industrial Court can declare the union recognised. If the failing party is the union, the Industrial Court may declare the union not recognised.
Where it orders a fresh ballot - or declares that the union is recognised or not recognised - the Industrial Court will:
- Take steps to cancel the 'original' ballot. If that ballot is held anyway, the result will not have any effect.
- If a fresh ballot is held, make certain changes to usual ballot procedure.
Informing the parties of the result of the recognition ballot
The Industrial Court informs both parties of the ballot result and its consequences.
To be recognised, the union needs the support of a majority of those voting and at least 40% of those entitled to vote.
If the union fails to get the necessary support, it must wait three years before making a new application involving the same - or substantially the same - bargaining unit.
Once you have recognised a union, the collective bargaining process can begin and you have certain legal obligations towards the union and its members. See the consequences of trade union recognition.
Requests for costs for recognition ballots
Following the ballot, the QIP will normally send you and the union a demand for its costs.
The demand will show the gross costs of the ballot and the share of the cost to be paid by you and the union.
Both parties must pay the QIP within 15 working days, starting with the day after they receive the demand.
If you dispute the demand, you can appeal to an industrial tribunal within four weeks, starting with the day after you receive the demand.
For your appeal to succeed, you must show that the gross costs of the ballot are too great or your share of the costs is too great.
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Statutory derecognition of a trade union owing to reduced size of workforce
Seeking to derecognise a trade union where you employ no more than 20 workers.
You may seek to derecognise a trade union where you employ fewer than 21 workers - including workers with any associated employers - in any period of 13 weeks.
To do this, you must first send a notice to the union.
The notice must be copied to the Industrial Court and:
- identify the bargaining arrangements
- state the date on which the notice is given
- specify the period of 13 weeks in question
- state that you - taken with any associated employer(s) - employed an average of fewer than 21 workers in the specified 13-week period
- state that the bargaining arrangements are to cease to have effect on a specific date, which must fall after the end of a period of 35 working days, day one being the working day following that on which you give the notice
You must give the notice to the union before the end of the fifth working day, starting with the day after the last day of the specified period of 13 weeks.
The Industrial Court's decision on your notice of derecognition
When it receives your notice, the Chairman of the Industrial Court will appoint a panel of three Industrial Court members to consider whether or not it's valid.
The panel has ten working days, starting with the day after that on which the Industrial Court receives the notice, to reach a decision.
If the panel decides that your notice is not valid, it will tell you of this decision and your notice will be treated as if you had not given it. The bargaining arrangements would therefore remain in force.
If the panel decides that your notice is valid, it will tell you of this decision and the bargaining arrangements will then cease to have effect on the date specified in your notice.
The union's challenge to the validity of your notice
The union can challenge the Industrial Court's decision to accept your application for derecognition on the grounds that:
- The 13-week period specified in your notice ended before the relevant date. This is the date the three-year period, starting with the day of the Industrial Court declaration of recognition, expires.
- You - along with any associated employer(s) - did not employ an average of fewer than 21 workers in the 13-week period.
The union's application must be:
- in the proper form and supported by such documents as the Industrial Court may have specified
- copied to you, along with any supporting documents
- made within ten working days, starting with the day after that on which you gave your notice
The Industrial Court's decision on the union's application
The Industrial Court has ten working days - starting with the day after that on which the Industrial Court gave notice of acceptance of the union's application - to reach a decision.
Once you and the union have been given the opportunity to state your views, the Industrial Court will decide on the two issues of whether or not the 13-week period ended before the relevant date or whether you - along with any associated employers - did in fact employ fewer than 21 workers over the specified 13-week period.
If the Industrial Court decides that either the 13-week period ended before the relevant date or you - taken with any associated employers - employed 21 or more workers in that period, your notice shall be treated as not having been given.
If the Industrial Court decides that the 13-week period did not end before the relevant date and that you, taken with any associated employers, employed fewer than 21 workers in that period, the bargaining arrangements will cease to have effect on the 'termination date'.
The termination date will be the date that was specified in your notice to the union or the day after the last day of the Industrial Court's ten-day decision period, whichever is later.
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Statutory derecognition of a trade union owing to lack of support for bargaining arrangements
Derecognising a trade union where the bargaining unit no longer supports the union conducting collective bargaining.
You can - at any time - make a request to a recognised trade union to end collective bargaining arrangements on the grounds that the union no longer has the support of the bargaining unit. The union can decline the request.
However, if the union declines a request after three years of statutory recognition, you can apply to the Industrial Court to hold a secret ballot.
Similarly, where a worker believes that their union no longer has the support of the bargaining unit, they can apply to the Industrial Court to hold a secret ballot - but only after three years of statutory recognition.
Your request to the union for derecognition
To be valid, your request must:
- be in writing
- be received by the union
- identify the bargaining arrangements
- state that the request is made under Schedule 1A of the Trade Union and Labour Relations (Northern Ireland) Order 1995
Once the union receives your request, the union has ten working days to respond, starting with the day after the union receives your request.
If - before the end of the ten-day period - the union agrees to end the bargaining arrangement, the matter ends there.
If the union either fails to respond to your request or - before the end of the ten-day period - tells you that it doesn't accept your request (and does not indicate a willingness to negotiate), you may apply to the Industrial Court for the holding of a secret ballot to decide whether or not collective bargaining should end.
If - before the end of the ten-day period - the union tells you that it doesn't accept your request but is willing to negotiate, you and the union (the parties) have 20 working days - starting with the working day immediately following the end of the ten-day period - to negotiate with a view to agreeing to end the bargaining arrangements.
During this 20-day period, the parties may request the assistance of the LRA in their negotiations. The parties can agree to extend this period as required.
Your application to the Industrial Court
If the parties fail to reach an agreement, you may apply to the Industrial Court for the holding of a secret ballot to decide whether or not the bargaining arrangements should end.
The Industrial Court will only accept your ballot application if:
- it is made in the proper form
- you have copied the application and any supporting documents to the union
- at least 10 per cent of the workers in the bargaining unit favour derecognition
- a majority of the workers in the bargaining unit are likely to favour derecognition
- there hasn't been a previous application for an end to the bargaining arrangements in the last three years
The Industrial Court's decision following your application
Starting with the day after that on which it receives your application, the Industrial Court normally has ten working days in which to decide whether or not:
- your request to the union is valid
- you negotiated properly with the union if you were required to do so
- your application to the Industrial Court is admissible
If the Industrial Court decides that you have failed to meet any or all of these requirements, it will not accept the application and the issue ends there.
If the Industrial Court decides that you have met all of these requirements, it will accept your application and arrange for the holding of a secret ballot - see statutory derecognition of a trade union - derecognition ballots.
In reaching its decision, the Industrial Court panel may, where it considers it appropriate, convene a hearing. The parties will be invited to attend and present evidence to the panel.
A worker's application to the Industrial Court
Where a worker believes that their union no longer has the support of the bargaining unit, they can apply to the Industrial Court to hold a secret ballot to determine whether or not collective bargaining arrangements should end.
A worker can only make such an application after three years of statutory recognition. However, unlike employers, they do not need to first make a request to the union (or even the employer) to end bargaining arrangements.
The Industrial Court will only accept the worker's ballot application if:
- it is made in the proper form
- they have copied the application and any supporting documents to both you and the union
- at least 10 per cent of the workers in the bargaining unit favour derecognition
- a majority of the workers in the bargaining unit are likely to favour derecognition
- there hasn't been a previous application for an end to the bargaining arrangements in the last three years
The Industrial Court's decision following the worker's application
Starting with the day after that on which it receives the worker's application, the Industrial Court normally has ten working days in which to decide whether or not the worker's application to the Industrial Court is admissible.
If the Industrial Court decides that the worker's application is not admissible, it won't accept the application and the issue ends there.
If the Industrial Court decides that the worker's application is admissible, it will accept the application. The Industrial Court will then give notice of this acceptance decision to you, the worker and the union.
In reaching its decision, the Industrial Court panel may, where it considers it appropriate, convene a hearing. The parties will be invited to attend and present evidence to the panel.
The consequences of the Industrial Court accepting the worker's application
Where the Industrial Court accepts a worker's application, it normally has 20 working days - starting with the day after the Industrial Court gives notice that it has accepted the application - to help you, the union and the worker negotiate with a view to either agreeing that the worker will withdraw the application, or reaching an agreement that the parties will end the bargaining arrangements.
If - in the 20-day period - the parties agree to end the bargaining arrangements or the worker agrees to withdraw the application, the Industrial Court will cease its considerations.
If the parties fail to reach an agreement in the 20-day period, the Industrial Court must arrange for the holding of a secret ballot - see statutory derecognition of a trade union - derecognition ballots.
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Statutory derecognition of a trade union: falling union membership in the bargaining unit
Seeking to derecognise a trade union where union membership in the bargaining unit falls below half.
Sometimes, a trade union obtains statutory recognition without a ballot because more than 50% of the bargaining unit were union members.
If you recognised a union under these circumstances but you believe that union membership in the bargaining unit has since fallen to below 50%, you can - after at least three years of recognition - apply to the Industrial Court to hold a secret ballot to decide whether recognition should end.
Your request to the union
Before applying to the Industrial Court, you must make a request to the union, asking it to voluntarily end collective bargaining arrangements.
To be valid, your request must:
- be in writing
- be received by the union
- identify the bargaining arrangements
- state that fewer than half the workers in the bargaining unit are members of the union
- state that the request is made under Schedule 1A of the Trade Union and Labour Relations (Northern Ireland) Order 1995
Once the union receives your request, you and the union - 'the parties' - have ten working days, starting with the day after the union receives your request, to agree to end the bargaining arrangements.
During this ten-day period, the parties may request the assistance of the LRA in their negotiations. The parties can agree to extend this period as required.
If - before the end of this period - the parties agree to end the bargaining arrangements, the matter ends there.
Your application to the Industrial Court
If the parties fail to agree to end the bargaining arrangements before the end of the ten-day period, you may apply to the Industrial Court for the holding of a secret ballot to decide whether or not collective bargaining should end.
The Industrial Court will only accept your ballot application if:
- it is made in the proper form
- you have copied the application and any supporting documents to the union
- fewer than half the workers in the bargaining unit are members of the union
- there hasn't been a previous application for an end to the bargaining arrangements in the last three years
The Industrial Court's decision following your application
Starting with the day after it receives your application, the Industrial Court normally has ten working days to decide whether or not your request to the union is valid or your application to the Industrial Court is admissible.
If the Industrial Court decides that you have failed to meet either or both of these requirements, it will not accept your application, and the issue ends there.
If the Industrial Court decides that you have met both of these requirements, it will accept your application and arrange for the holding of a secret ballot - see statutory derecognition of a trade union - derecognition ballots.
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Derecognition of a non-independent trade union
How workers may ask the Industrial Court to end collective bargaining with a union that is not certified as independent.
Workers may use the statutory procedure to seek to derecognise a non-independent trade union that their employer has voluntarily recognised.
The reason for derecognition must be that the majority of workers in the bargaining unit do not support the recognition arrangements.
In this case, a worker - or workers - from the bargaining unit can apply to the Industrial Court for derecognition.
The Industrial Court will only accept the application if it believes that:
- the union is not independent - ie it does not have a certificate of independence from the Certification Officer
- at least 10% of the workers in the bargaining unit favour derecognition
- a majority of the workers in the bargaining unit are likely to favour derecognition
If the Industrial Court accepts the application, it will try to help the employer, worker(s) and union to reach an agreement on derecognition.
If an agreement is not reached, the Industrial Court will arrange a secret ballot - see statutory derecognition of a trade union - derecognition ballots.
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Statutory derecognition of a trade union - derecognition ballots
How the Industrial Court arranges ballots where an employer or worker makes a request to derecognise a trade union.
Following a request for statutory derecognition, the Industrial Court may call for a secret ballot to determine whether or not collective bargaining arrangements should end.
Once the Industrial Court has told you and the union - 'the parties' - in writing that there will be a ballot, the parties should negotiate and agree access arrangements for the union during the ballot period and send a copy of the access agreements to the Industrial Court case manager.
Where necessary, the Industrial Court may arrange a hearing on access so that it can determine an access arrangement.
The form of ballot
The Industrial Court has to decide whether the ballot should be a workplace ballot, a postal ballot or a combination of the two.
The Industrial Court decision will depend on factors such as:
- costs and practicality
- the preference of the parties
- the chance of the ballot being affected by unfairness or malpractice if it were conducted at a workplace
Conduct in the run up to and during a recognition ballot
If it decides to hold a ballot, the Industrial Court will appoint a qualified independent person (QIP) to conduct it within 20 working days of being appointed - although the Industrial Court has discretion to choose a longer period.
The QIP will come from a body specified in legislation.
You must:
- Co-operate generally with the union and QIP relating to the ballot.
- Not make an offer to a worker or workers that induces them not attending a relevant meeting between the union and the workers.
- Not take or threaten to take any action against a worker because they attended or took part in a relevant meeting or they indicated their intention to do so.
- Give the union reasonable access to the workers in the bargaining unit in accordance with the code of practice on access and unfair practices during recognition and derecognition ballots.
- Pass names and addresses of workers in the bargaining unit to the Industrial Court within ten working days, starting with the day after you were informed of the QIP's name and ballot arrangements. You must also give the Industrial Court details of any workers joining or leaving the bargaining unit.
If it is found that you have failed to comply with any of the duties above, the Industrial Court can order you to remedy the failure within a set timescale. If you fail to remedy the failure, the Industrial Court can refuse your application for derecognition.
During the balloting period, the union is entitled to access the workers belonging to the bargaining unit. Both you and the union must not, at this time, use 'unfair practices' to influence the ballot result.
Examples of unfair practices include offering money to a worker to vote in a particular way and dismissing - or threatening to dismiss or take disciplinary action against - a worker for voting in the ballot.
Unfair practices complaints
An unfair practices complaint must be made on - or before - the first working day after the date of the ballot or - if votes can be cast on more than one day such as in a postal ballot - the last of those days.
Following a valid complaint, the Industrial Court normally has ten working days in which to decide whether the complaint is well founded, starting with the day following receipt of the complaint.
If the Industrial Court decides that the complaint is well founded, it will declare this finding and may then issue a remedial order telling the party what steps it must take in order to mitigate the effect of the unfair practice and when to take those steps by, and/or give notice to the parties that a secret ballot will be held - in effect ordering a new ballot.
Circumstances where a ballot may be abandoned
In some circumstances, the Industrial Court has the power to cancel a ballot and:
- if the party concerned is you, refuse your application for derecognition
- if the party concerned is the union, issue a declaration that collective bargaining is to end
These circumstances are where the Industrial Court:
- declares that both an unfair practice complaint is well founded and the unfair practice consisted of - or included - the use of violence or the dismissal of a union official
- has issued to a party an unfair practices remedial order but the party fails to comply with it
- having issued an unfair practices remedial order to a party, declares that a complaint that the same party used an unfair practice is well founded
If the 'failing' party is you, the applicant worker and/or the union may enforce obedience to the law.
Where it orders a fresh ballot, refuses your application or declares an unfair practice complaint as well founded, the Industrial Court will:
- Take steps to cancel the 'original' ballot. If that ballot is held anyway, the result will not have any effect.
- If a fresh ballot is held, make certain changes to the usual ballot procedure.
Informing the parties of the result of the recognition ballot
The Industrial Court will inform the parties of the ballot result and its consequences.
In order for collective bargaining arrangements to end as the result of a ballot, a majority of those voting, and at least 40 per cent of the workers in the bargaining unit, must vote in favour of ending those arrangements.
If you fail to get the necessary support, you must wait three years before making a new application involving the same - or substantially the same - bargaining unit.
If the union is derecognised as a result of the ballot, the Industrial Court will declare that the bargaining arrangements are to cease to have effect on a specified date.
The Industrial Court cannot accept any applications for statutory recognition from the union in respect of that bargaining unit - or one substantially the same - if the union makes the application within three years of the day after that on which the Industrial Court issued its declaration.
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Examples of good information and consultation in practice
In this guide:
- Inform and consult your employees
- Advantages of good employee communication
- Legal requirements for communicating with employees
- Consulting your employees
- The Information and Consultation of Employees Regulations (Northern Ireland) 2005
- ICE Regulations: pre-existing agreements and fall-back provisions
- ICE Regulations: enforcement, protections and confidential information
- Transnational Information and Consultation of Employees (TICE) Regulations 1999
- European Works Councils
- Informing and consulting employees - best practice
- How to achieve good communication between employer and employees
- Examples of good information and consultation in practice
- Advantages of communications and consultation training in successful business
Advantages of good employee communication
Benefits of communicating effectively with your employees.
Communicating with your employees is central to managing your workforce. Poor communication can result in misunderstandings and mistrust.
Benefits of good staff communication
Introducing proper procedures for informing and consulting with your employees can take time and money but you will benefit from improved products, productivity, and competitiveness.
Other benefits of effective consultation and information-sharing include:
- improved employee commitment and job satisfaction, particularly if employees understand what the business is trying to achieve and the effect of their contribution
- increased morale leading to lower turnover of employees and reduced recruitment and training costs
- better employee performance, if they understand targets and deadlines and receive proper feedback
- provision of accurate information or guidance, which helps avoid misunderstandings, eg on health and safety policies, business performance, staff changes, and job structures
- improved management decision-making, due in part to feedback from employees
- improved management/employee relations
- improved exchange of ideas
- consistent approach and strategy across the business
If employees are given inadequate or unclear instructions, they could act in breach of regulations without meaning to. Lack of basic information can also be a breach of workers' rights. See legal requirements for communicating with employees.
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Legal requirements for communicating with employees
Understand your legal requirements for communicating with employees.
As an employer, you are required to inform and consult employees in certain circumstances. See consulting your employees.
You must inform employees of:
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The main terms and conditions of employment in written form - see the employment contract. This must be provided within two months of an employee commencing employment.
- Any changes in the terms and conditions of employment.
- The reason in writing for dismissing them (for employees with 12 or more months' service). This is only necessary if they request it - unless they are a woman who is dismissed while pregnant or on maternity leave, or statutory adoption leave when in these cases 12 months of service is not required. It can be wise to provide this even to employees who haven't completed 12 months of employment as this clarity of communication can avoid potential misunderstandings and unnecessary claims. Such consideration, even though is not required, is good practice.
- Certain matters when your business is involved, eg in the transfer of an undertaking - see responsibilities to employees if you buy or sell a business.
Collective bargaining
You must give recognised trade unions the information they require for collective bargaining. For more information on recognising trade unions and collective bargaining, see recognising and derecognising a trade union.
Read the Labour Rrelations Agency's guidance on disclosure of information to trade unions for collective bargaining purposes.
You are also required by law to:
- provide employees with an itemised pay slip whenever you pay them
- communicate in writing if asking shop workers or betting workers in Northern Ireland to work on a Sunday - see Sunday working and night working
- consult your employees or their representatives when considering collective redundancies, business transfer or changes to pensions
Regulations give employees of businesses and organisations employing 50 or more employees the right to be informed and consulted on issues affecting them and the business they work for. See legal requirements for informing and consulting employees.
Smaller employers should agree and create formal procedures for informing and consulting with employees, in the interests of good employment relations. See informing and consulting - ways and means and examples of good information and consultation in practice.
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Consulting your employees
Consultation that is required by law and voluntary consultation.
Consultation involves managers and business owners seeking and taking into account the views of employees before making a decision. You are required by law to consult with employees, their representatives, or recognised trade unions on:
- health and safety issues
- changes to the contract of employment
- redundancies
- undertakings or transfers, ie the business is to be sold or part of it is to be contracted out, or the contractor is to be replaced by another
- changes to pension schemes
- training policies, progress, and plans - if the Industrial Court has imposed a bargaining method in the statutory trade union recognition process - see recognising and derecognising a trade union
You must use the appropriate consultation method depending on the circumstances, eg through individual employee consultation, employee representatives, joint consultative committees/works councils, joint working parties, or trade unions/collective bargaining units.
If your business or organisation employs more than 50 employees, your employees can require that you negotiate arrangements to inform or consult them on issues that may affect them and the business. See legal requirements for informing and consulting employees.
Voluntary consultation
Your business may benefit from consulting employees on a regular basis and making staff aware of ways they can contribute ideas and raise concerns. You do not need to have complex structures for consultation - often ad hoc groups can work better. See legal requirements for consulting and informing employees.
For effective consultation, you should consider:
- seeking and considering the views of affected employees
- explaining final decisions - particularly when employees' views are rejected
- giving credit and recognition to those who provide information which improves a decision
- ensuring that the issues for consultation are relevant to the group of employees discussing them
- making the outcome of the meeting or decisions available to everyone
Effective consultation can help avoid minor issues and petty grievances. It is also good for employee morale and their role commitment and dedication to the business aims.
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The Information and Consultation of Employees Regulations (Northern Ireland) 2005
How the ICE Regulations work, including pre-existing agreements and the fall-back provisions.
Under the Information and Consultation of Employees Regulations (Northern Ireland) 2005, if you have 50 or more employees, your employees can request that you set up arrangements to inform and consult them. When a valid employee request is made, you are obliged to negotiate the details of an information and consultation (I&C) agreement with representatives of your employees, unless there is a valid pre-existing agreement in place and you have held a ballot for which employees have supported the pre-existing agreement.
For more information, see legal requirements for communicating with employees.
What is a valid employee request?
If 10% of your employees request that you set up an I&C agreement, you are obliged to do so. That 10% is subject to a minimum of 15 and a maximum of 2,500 employees.
To calculate the size of your workforce, you should calculate the average number of employees in your business over the past 12 months. You can count part-time employees working under a contract of 75 hours or less a month as half of one employee for this calculation.
For an employee request to be valid, it must:
- be in writing
- be dated
- state the names of the employees making the request
If your employees wish to remain anonymous, they may submit a request to the Industrial Court who will inform you that a valid request has been received.
It is possible for a valid request to be made up of a number of requests from different employees over a rolling six-month period - if this achieves the 10% threshold.
Negotiating an I&C agreement
If you receive a valid employee request, you will need to make arrangements to begin negotiating an I&C agreement as soon as is reasonably practicable. You will need to arrange for your employees to elect or appoint a body of representatives to negotiate the agreement with you.
The names of the negotiating representatives must be set out in writing once this has been done.
You will have six months to negotiate the agreement, starting three months from the date that you received the employee request. If you and the employees' representatives agree, you can extend this period indefinitely.
A negotiated agreement must cover all of the employees in the undertaking, so it is advisable to word the agreement in such a way that new employees would be automatically covered. It is also advisable to include a provision stating how a restructuring will be dealt with, for example in terms of any changes to the number and identity of employee representatives.
If you fail to reach an agreement, or do not start negotiations, the fall-back provisions will apply. For more information, see ICE Regulations: pre-existing agreements and fall-back provisions.
You can decide, in agreement with your employees' representatives, the terms of a negotiated agreement. It should set out what you will discuss, when you will discuss it, and how often the discussion will take place. The areas on which you inform and consult are for you and your employees' representatives to agree on.
You can also agree with your employees' representatives whether I&C will take place through employee representatives, directly with your workforce, or with both. If you opt to use representatives, then you should make provision for your employees to elect or appoint them. They do not have to be the same representatives as those who negotiated the agreement. Whilst trade union representatives do not have any special rights to act as an I&C representative, your employees may decide to elect or appoint a trade union representative as an I&C representative.
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ICE Regulations: pre-existing agreements and fall-back provisions
How pre-existing consultation agreements and fall-back provisions affect I&C agreements.
Under the ICE Regulations your employees have the right to request that you create an information and consultation (I&C) agreement. If you already have an I&C agreement in place, you may not need to negotiate a new one. A pre-existing agreement (PEA) may cover more than one undertaking or may have different provisions for different parts of your workforce, or be made up of several different agreements.
Pre-existing agreements
To be valid, a PEA must:
- be in writing
- cover all the employees in the undertaking
- set out how the employer will inform and consult the employees or their representatives
- be approved by the employees
If you have a PEA but 40% or more of your workforce has put in a valid request, you must negotiate a new agreement. However, if the number of employees making the request is 10% or more of the workforce but less than 40%, you can ballot the workforce to decide whether it endorses the request for a new agreement.
If you intend to hold a ballot you must inform your employees of this in writing. You must then wait 21 days before you hold the ballot to allow your employees to challenge the validity of the PEA.
If a ballot is held and 40% of the workforce, and a majority of those who vote, endorse the employee request, you must negotiate a new agreement. Where less than 40% of the workforce, or a minority of those voting, endorses the employee request, you do not have to negotiate a new agreement.
If your employees do not support the request for a new agreement then they cannot put in another request for three years.
Fall-back provisions
If you do not make the necessary arrangements to negotiate an I&C agreement, or negotiations fail, an agreement will be set up according to the standard 'fall-back' provisions. These are set out in the regulations and result in a more rigid and standardised agreement.
You have up to six months after negotiations have failed to arrange the election of I&C representatives. Under the fall-back provisions, you must arrange for the election of one representative per 50 employees or part thereof, with a minimum of two representatives and a maximum of 25.
Under the fall-back provisions, you must inform and consult the representatives on issues as follows:
- inform on the recent and probable development of the organisation's activities and economic situation
- inform and consult on the situation, structure, and probable development of employment within the organisation and, in particular, on any anticipatory measures envisaged where there is a threat to employment
- inform and consult with a view to reaching an agreement on decisions likely to lead to substantial changes in work organisation or contractual relations
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ICE Regulations: enforcement, protections and confidential information
Enforcement mechanisms in the ICE Regulations.
You and your employees are subject to a number of rights and responsibilities under the Information and Consultation of Employees (ICE) Regulations. The Industrial Court is responsible for ensuring that most of these are adhered to.
Enforcement of negotiated agreements and the fall-back provisions
You can be penalised if there is no negotiated agreement by the end of the required six-month negotiating period, and no ballot has been arranged to elect information and consultation (I&C) representatives.
If you fail to abide by the terms of a negotiated I&C agreement or the fall-back provisions, your employees or their representatives can raise a complaint with the Industrial Court. If the Industrial Court upholds the complaint they may issue a compliance notice that will set out the steps you must take in order to meet your obligations and the date by which you must take them.
If the Industrial Court does find that you have not adhered to the terms of a negotiated agreement or the fall-back provisions, then your employees or their representatives may be able to apply to the High Court to request that they make you pay a penalty of up to £75,000. The level of the penalty is based on the severity and impact of the failure.
Enforcement of pre-existing agreements (PEAs)
PEAs are only enforceable by measures that are included in the PEA itself. The Industrial Court has no authority to hear complaints that a party has not adhered to the terms of a PEA.
Confidential information
If you have a negotiated agreement or you are subject to the fall-back provisions, then you should try to share as much information as possible with your employees or their representatives. However, you can justifiably restrict or withhold certain information on the grounds that if it came out, it could harm your business.
If you withhold a piece of information that your employees believe they should be allowed to see, they can appeal to the Industrial Court which will judge whether you are right to withhold it.
Rights and protections for representatives and employees
Your employees who act as representatives either during negotiations or as part of an I&C agreement have the right to take reasonable paid time off to fulfil their duties. You cannot dismiss or subject to detriment any of your employees as a result of their involvement in I&C activity unless they are found to be passing on confidential information. If you do not respect your employees' rights, they may be able to take you to an industrial tribunal.
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Transnational Information and Consultation of Employees (TICE) Regulations 1999
The TICE Regulations apply to multinational businesses operating in the European Economic Area.
The Transnational Information and Consultation of Employees (TICE) Regulations apply to multinational businesses operating in the European Economic Area. They establish the procedures to set up a European Works Council (EWC) to inform and consult on issues that concern the company as a whole. The EWC is made up of representatives from all European member states in which the company has operations.
European Works Council
To set up an EWC, a request must be made in writing by at least 100 of your employees or their representatives in two or more member states. Alternatively, management can decide to set one up on its own initiative.
A special negotiating body (a body comprised of employee representatives) must be set up to negotiate the terms of the EWC agreement with management. The EWC must be set up in accordance with the 'statutory model', if:
- negotiations do not start within six months of receiving a request, or if the parties fail to reach an agreement within three years following the commencement of negotiations
- you refuse to negotiate within six months of receiving an agreement request, or if you fail to come to an agreement within three years
For more details, see European Works Councils.
You must also inform and consult your employees:
- where you are proposing 20 or more redundancies in a 90-day period
- if you are planning on selling your business or buying a new one
- if you are planning certain changes to an occupational or personal pension scheme
Changes as a result of the UK's exit from the EU
Following the UK's withdrawal from the EU the government has amended the TICE regulations so that:
- no new requests to set up an EWC or Information and Consultation procedure can be made by people employed in the UK
- provisions relevant to the ongoing operation of existing EWCs will remain in force
- requests for information or to establish EWCs or Information and Consultation procedures made but not completed before 1 January 2021 will be allowed to complete
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European Works Councils
Information and consultation in multinational companies through European Works Councils.
If your business is part of a multinational organisation that operates in at least two countries in the European Economic Area (EEA), you may be subject to the legislation on transnational information and consultation (I&C).
This gives employees in multinational undertakings with at least 1,000 employees the right to be represented on a European Works Council (EWC).
The EEA is made up of the 27 European Union member states plus Norway, Iceland and Liechtenstein.
People employed in the UK are no longer able to ask their employer to set up an EWC following the UK's exit from the EU. However, if a request to set up an EWC was submitted before 1 January 2021, it will be allowed to complete.
The current representative still may be able to be involved with your business's EWC following the UK's exit from the EU if your business agrees. The government will make sure the enforcement framework, rights, and protections for employees in UK EWCs are still available as far as possible. It is up to your company to decide if they want to include representatives from the UK. If they do, they will still be entitled to paid time off to carry out their role. See participating in a European Works Council.
An EWC is an I&C forum that is designed to allow employees in different EEA nations to be informed and consulted about transnational issues that affect their employer.
Some large multinational organisations have set up EWCs following a request from their employees. However, businesses can start the process of negotiating an EWC agreement themselves.
The transnational I&C legislation applies differently to EWCs:
- established before 15 December 1999
- established on or after 15 December 1999 and where the agreement was signed or revised in the two years before 5 June 2011
- established between 16 December 1999 and 5 June 2011 that have not been revised in the two years before 5 June 2011
- that are yet to be established or were established on or after 5 June 2011
Transnational I&C requirements
If your business has 1,000 or more employees, and has at least 150 employees in each of two or more EEA states, your employees can request that an EWC be set up. For a request to be valid, it must be:
- made by either at least 100 employees in at least two undertakings in two or more EEA countries, or representatives representing that many employees
- in writing and dated
- sent to your business' central or local management
Agency workers do not count towards the number of people in the business in which they are placed. However, they do count towards the number of people employed by the employment agency business providing them.
Once you have received a valid request, you must make the necessary arrangements for your employees to elect or appoint representatives of a special negotiating body (SNB).
You'll have six months to set up the SNB and start negotiations. Otherwise, fall-back provisions will apply.
The SNB should be made up of employees' representatives from each EEA country where your business has employees. Its role is to negotiate with your central management over the composition and terms of the EWC.
EWC agreements
Once an SNB has been set up, the parties have up to three years to negotiate an EWC agreement in order to determine - among other things - exactly how the EWC will be set up, what it will discuss, how often it will meet and what it should be provided with to help it function.
A negotiated EWC agreement must set out:
- what parts of the undertaking will be covered by the agreement
- the composition of the EWC and how long its members will serve
- the functions of the EWC
- the way I&C will take place
- how central management will disclose information
- the venue, frequency and duration of EWC meetings
- how the consultation dialogue with the EWC should link to I&C at the national level
- the financial and material resources that will be available to the EWC
- how long the EWC will last
- how the EWC agreement will be renegotiated
- if a select committee should be set up and, if so, how it will operate
An EWC agreement will need to meet the requirements of the fall-back provisions if:
- the parties decide not to negotiate
- an agreement cannot be reached
- the management and the SNB decide it is so
The fall-back provisions are much more prescriptive about what the employer must consult over and when.
While your central management should try to be as open as possible with your EWC, you can withhold certain information if its disclosure would seriously harm the functioning of the business.
Enforcement of the EWC legislation
The enforcement provisions of the EWC legislation are shared between the Industrial Court and the High Court.
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Informing and consulting employees - best practice
Communicate individually, face-to-face, in writing and by consultation according to the subject and the audience.
Depending on your business' size, nature and structure, the type of information you are sharing, and the input you hope to get, there are a variety of ways to communicate and consult with employees and/or their representatives.
Where you have an information and consultation or European Works Council agreement, a pre-existing agreement, or where you are legally required to inform and consult with employees on other matters (such as health and safety regulations or when considering redundancies), any consulting and informing you carry out must comply with the terms of that agreement or other legal requirements.
Effective communication methods
To communicate individually, you could use:
- one-to-one meetings - for issues specific to the individual
- telephone calls - for home workers and other offsite employees
- email - employees can respond at their convenience
A record should be appropriately kept of such communications. You must comply with the UK General Data Protection Regulation (UK GDPR).
Failure to consult your staff is a regular employment tribunal complaint by employees.
Face-to-face communication methods
Face-to-face methods of communication include:
- group or team briefings - discussion and feedback on issues directly related to the group
- quality circles - groups that meet regularly to solve problems and improve quality
- large-scale meetings - to present the business' performance and long-term objectives to employees or exchange of views
- cascade networks - briefing small groups of people who tell others the same information, to get information across quickly without having to call a meeting
- inter-departmental briefings - to promote a unified approach within larger businesses
Written methods of communication
Written methods include:
- company handbooks - combines company and job-related information
- company newsletters - present information about the business and its people, in print or through email
- employee information notes - reports the business' activities and performance
- departmental bulletins - informs on a sectional, departmental, or wider basis
- notice boards - encourages communication between employees
- intranets - stores company information in a structured way for employee access
- email - communicates with employees in different or isolated locations
Consultation methods
Consultation methods include:
- joint consultative councils/works councils - regular meetings of managers and employee representatives
- joint working parties - resolves specific issues and includes managers and employees
- trade unions - aim to improve terms and conditions for their members
- informal emails - promote a feedback forum for employees to consider and put forward ideas at times convenient to them
- annual staff survey or questionnaire - allows for giving frank views if employees can reply anonymously
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How to achieve good communication between employer and employees
How to encourage a two-way flow of information between employees and managers.
Be clear about what you are trying to achieve and explain to employees, their representatives, or both, whether you are informing, consulting, or negotiating with them.
A two-way flow of information
You should encourage a two-way flow of information between employees and managers. Consider:
- holding regular meetings
- using language your employees understand - not jargon
- keeping discussions focused, relevant, local and timely
- using open-ended questions to draw out ideas from employees
- ensuring your communications reach every employee, ie don't forget part-time workers, home workers, and absent workers (for example, those on statutory leave and those absent due to sickness)
- using social events to break down barriers and build up trust
Communicating sensitive information
When you need to communicate controversial or sensitive issues, eg poor company results, you should do this face-to-face. It's usually better to have a senior manager discussing such important matters. The advantage of spoken, face-to-face communication is that it's a direct and effective way to get across facts. It can't be relied upon completely because misunderstandings and rumours can arise - you may wish to reinforce it with written confirmation, see managing conflict.
You may also want written information available for employees to refer to.
Make sure that whoever talks to the employees is fully briefed, and provide an opportunity for employees to ask questions:
- If you are asked a question you don't know the answer to, say so. You could advise that you would have needed notice of that question as you don't currently have the information to hand for an immediate response. Explain that you will get back to them with an answer in due course. For all employees to be informed you could email all staff once you have an answer to a query that affects them all.
- If there is no answer, explain the reasons for this.
- If you can get an answer by a given deadline, tell them this.
Effective written communication is typically accurate, brief, and clear. It's good practice to have copies of all business policies and information in one place which employees have access to, eg an intranet. Employees can look up procedures, duties, and contract terms at their convenience or when they need clarification.
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Examples of good information and consultation in practice
How to create procedures to communicate and consult with your staff.
A communications policy is an effective way of defining who is responsible for information and consultation (I&C), the channels along which information passes, and the way it is communicated.
If your business is not affected by the legal requirements you should still consult with your employees to establish an I&C agreement.
Establishing an I&C policy
A good I&C policy clearly describes who is responsible for communication at each level and the methods used for communication. It also outlines the arrangements for consultation and for training employees and managers.
Consider involving trade union representatives or other employee representatives when you draw up the policy and throughout the communications and consultation process. You should involve senior managers and get them to take the lead. Make provisions to include your workers in different sites, isolated areas, or those working from home.
Make sure that your communications and consultations are systematic and regular. You should frequently review the policy and be willing to modify it. Tailor your consultative arrangements to your business.
Small companies typically have informal arrangements, but you may need a more formal arrangement so that everyone clearly understands their roles and responsibilities. This is important where consultation is a legal obligation.
Be genuine about your commitment to communication and consider employees' views before making a decision.
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Advantages of communications and consultation training in successful business
Communications and consultation training for managers, employees and trade union representatives.
Training managers and employees in communications skills and techniques can improve communications and consultation practice within your business.
Employees can benefit from understanding the information they are given and it can encourage them to take a more active role in the communications and consultation process. Training can help trade union representatives take a fuller part in communications and consultation.
Benefits of training
Courses can help encourage employee involvement in your business. They can also help you communicate information to employees on a range of issues that relate to their employment. Communication training for managers and employees can help break down any barriers between them.
Training can help managers to:
- understand the importance of good communication and of having a consultation policy
- understand their roles
- encourage those employees who have problems communicating
- understand and meet their legal obligations for informing and consulting
For more information, see skills and training for directors and owners.
Areas of skills development
Useful courses for your employees and managers may cover:
- joint working methods
- effective meetings
- presentation skills
- listening skills
- effective business writing
- interviewing techniques
As with any training, it is a good idea to periodically evaluate the effectiveness of the training course.
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How to achieve good communication between employer and employees
In this guide:
- Inform and consult your employees
- Advantages of good employee communication
- Legal requirements for communicating with employees
- Consulting your employees
- The Information and Consultation of Employees Regulations (Northern Ireland) 2005
- ICE Regulations: pre-existing agreements and fall-back provisions
- ICE Regulations: enforcement, protections and confidential information
- Transnational Information and Consultation of Employees (TICE) Regulations 1999
- European Works Councils
- Informing and consulting employees - best practice
- How to achieve good communication between employer and employees
- Examples of good information and consultation in practice
- Advantages of communications and consultation training in successful business
Advantages of good employee communication
Benefits of communicating effectively with your employees.
Communicating with your employees is central to managing your workforce. Poor communication can result in misunderstandings and mistrust.
Benefits of good staff communication
Introducing proper procedures for informing and consulting with your employees can take time and money but you will benefit from improved products, productivity, and competitiveness.
Other benefits of effective consultation and information-sharing include:
- improved employee commitment and job satisfaction, particularly if employees understand what the business is trying to achieve and the effect of their contribution
- increased morale leading to lower turnover of employees and reduced recruitment and training costs
- better employee performance, if they understand targets and deadlines and receive proper feedback
- provision of accurate information or guidance, which helps avoid misunderstandings, eg on health and safety policies, business performance, staff changes, and job structures
- improved management decision-making, due in part to feedback from employees
- improved management/employee relations
- improved exchange of ideas
- consistent approach and strategy across the business
If employees are given inadequate or unclear instructions, they could act in breach of regulations without meaning to. Lack of basic information can also be a breach of workers' rights. See legal requirements for communicating with employees.
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Legal requirements for communicating with employees
Understand your legal requirements for communicating with employees.
As an employer, you are required to inform and consult employees in certain circumstances. See consulting your employees.
You must inform employees of:
-
The main terms and conditions of employment in written form - see the employment contract. This must be provided within two months of an employee commencing employment.
- Any changes in the terms and conditions of employment.
- The reason in writing for dismissing them (for employees with 12 or more months' service). This is only necessary if they request it - unless they are a woman who is dismissed while pregnant or on maternity leave, or statutory adoption leave when in these cases 12 months of service is not required. It can be wise to provide this even to employees who haven't completed 12 months of employment as this clarity of communication can avoid potential misunderstandings and unnecessary claims. Such consideration, even though is not required, is good practice.
- Certain matters when your business is involved, eg in the transfer of an undertaking - see responsibilities to employees if you buy or sell a business.
Collective bargaining
You must give recognised trade unions the information they require for collective bargaining. For more information on recognising trade unions and collective bargaining, see recognising and derecognising a trade union.
Read the Labour Rrelations Agency's guidance on disclosure of information to trade unions for collective bargaining purposes.
You are also required by law to:
- provide employees with an itemised pay slip whenever you pay them
- communicate in writing if asking shop workers or betting workers in Northern Ireland to work on a Sunday - see Sunday working and night working
- consult your employees or their representatives when considering collective redundancies, business transfer or changes to pensions
Regulations give employees of businesses and organisations employing 50 or more employees the right to be informed and consulted on issues affecting them and the business they work for. See legal requirements for informing and consulting employees.
Smaller employers should agree and create formal procedures for informing and consulting with employees, in the interests of good employment relations. See informing and consulting - ways and means and examples of good information and consultation in practice.
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Consulting your employees
Consultation that is required by law and voluntary consultation.
Consultation involves managers and business owners seeking and taking into account the views of employees before making a decision. You are required by law to consult with employees, their representatives, or recognised trade unions on:
- health and safety issues
- changes to the contract of employment
- redundancies
- undertakings or transfers, ie the business is to be sold or part of it is to be contracted out, or the contractor is to be replaced by another
- changes to pension schemes
- training policies, progress, and plans - if the Industrial Court has imposed a bargaining method in the statutory trade union recognition process - see recognising and derecognising a trade union
You must use the appropriate consultation method depending on the circumstances, eg through individual employee consultation, employee representatives, joint consultative committees/works councils, joint working parties, or trade unions/collective bargaining units.
If your business or organisation employs more than 50 employees, your employees can require that you negotiate arrangements to inform or consult them on issues that may affect them and the business. See legal requirements for informing and consulting employees.
Voluntary consultation
Your business may benefit from consulting employees on a regular basis and making staff aware of ways they can contribute ideas and raise concerns. You do not need to have complex structures for consultation - often ad hoc groups can work better. See legal requirements for consulting and informing employees.
For effective consultation, you should consider:
- seeking and considering the views of affected employees
- explaining final decisions - particularly when employees' views are rejected
- giving credit and recognition to those who provide information which improves a decision
- ensuring that the issues for consultation are relevant to the group of employees discussing them
- making the outcome of the meeting or decisions available to everyone
Effective consultation can help avoid minor issues and petty grievances. It is also good for employee morale and their role commitment and dedication to the business aims.
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The Information and Consultation of Employees Regulations (Northern Ireland) 2005
How the ICE Regulations work, including pre-existing agreements and the fall-back provisions.
Under the Information and Consultation of Employees Regulations (Northern Ireland) 2005, if you have 50 or more employees, your employees can request that you set up arrangements to inform and consult them. When a valid employee request is made, you are obliged to negotiate the details of an information and consultation (I&C) agreement with representatives of your employees, unless there is a valid pre-existing agreement in place and you have held a ballot for which employees have supported the pre-existing agreement.
For more information, see legal requirements for communicating with employees.
What is a valid employee request?
If 10% of your employees request that you set up an I&C agreement, you are obliged to do so. That 10% is subject to a minimum of 15 and a maximum of 2,500 employees.
To calculate the size of your workforce, you should calculate the average number of employees in your business over the past 12 months. You can count part-time employees working under a contract of 75 hours or less a month as half of one employee for this calculation.
For an employee request to be valid, it must:
- be in writing
- be dated
- state the names of the employees making the request
If your employees wish to remain anonymous, they may submit a request to the Industrial Court who will inform you that a valid request has been received.
It is possible for a valid request to be made up of a number of requests from different employees over a rolling six-month period - if this achieves the 10% threshold.
Negotiating an I&C agreement
If you receive a valid employee request, you will need to make arrangements to begin negotiating an I&C agreement as soon as is reasonably practicable. You will need to arrange for your employees to elect or appoint a body of representatives to negotiate the agreement with you.
The names of the negotiating representatives must be set out in writing once this has been done.
You will have six months to negotiate the agreement, starting three months from the date that you received the employee request. If you and the employees' representatives agree, you can extend this period indefinitely.
A negotiated agreement must cover all of the employees in the undertaking, so it is advisable to word the agreement in such a way that new employees would be automatically covered. It is also advisable to include a provision stating how a restructuring will be dealt with, for example in terms of any changes to the number and identity of employee representatives.
If you fail to reach an agreement, or do not start negotiations, the fall-back provisions will apply. For more information, see ICE Regulations: pre-existing agreements and fall-back provisions.
You can decide, in agreement with your employees' representatives, the terms of a negotiated agreement. It should set out what you will discuss, when you will discuss it, and how often the discussion will take place. The areas on which you inform and consult are for you and your employees' representatives to agree on.
You can also agree with your employees' representatives whether I&C will take place through employee representatives, directly with your workforce, or with both. If you opt to use representatives, then you should make provision for your employees to elect or appoint them. They do not have to be the same representatives as those who negotiated the agreement. Whilst trade union representatives do not have any special rights to act as an I&C representative, your employees may decide to elect or appoint a trade union representative as an I&C representative.
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ICE Regulations: pre-existing agreements and fall-back provisions
How pre-existing consultation agreements and fall-back provisions affect I&C agreements.
Under the ICE Regulations your employees have the right to request that you create an information and consultation (I&C) agreement. If you already have an I&C agreement in place, you may not need to negotiate a new one. A pre-existing agreement (PEA) may cover more than one undertaking or may have different provisions for different parts of your workforce, or be made up of several different agreements.
Pre-existing agreements
To be valid, a PEA must:
- be in writing
- cover all the employees in the undertaking
- set out how the employer will inform and consult the employees or their representatives
- be approved by the employees
If you have a PEA but 40% or more of your workforce has put in a valid request, you must negotiate a new agreement. However, if the number of employees making the request is 10% or more of the workforce but less than 40%, you can ballot the workforce to decide whether it endorses the request for a new agreement.
If you intend to hold a ballot you must inform your employees of this in writing. You must then wait 21 days before you hold the ballot to allow your employees to challenge the validity of the PEA.
If a ballot is held and 40% of the workforce, and a majority of those who vote, endorse the employee request, you must negotiate a new agreement. Where less than 40% of the workforce, or a minority of those voting, endorses the employee request, you do not have to negotiate a new agreement.
If your employees do not support the request for a new agreement then they cannot put in another request for three years.
Fall-back provisions
If you do not make the necessary arrangements to negotiate an I&C agreement, or negotiations fail, an agreement will be set up according to the standard 'fall-back' provisions. These are set out in the regulations and result in a more rigid and standardised agreement.
You have up to six months after negotiations have failed to arrange the election of I&C representatives. Under the fall-back provisions, you must arrange for the election of one representative per 50 employees or part thereof, with a minimum of two representatives and a maximum of 25.
Under the fall-back provisions, you must inform and consult the representatives on issues as follows:
- inform on the recent and probable development of the organisation's activities and economic situation
- inform and consult on the situation, structure, and probable development of employment within the organisation and, in particular, on any anticipatory measures envisaged where there is a threat to employment
- inform and consult with a view to reaching an agreement on decisions likely to lead to substantial changes in work organisation or contractual relations
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ICE Regulations: enforcement, protections and confidential information
Enforcement mechanisms in the ICE Regulations.
You and your employees are subject to a number of rights and responsibilities under the Information and Consultation of Employees (ICE) Regulations. The Industrial Court is responsible for ensuring that most of these are adhered to.
Enforcement of negotiated agreements and the fall-back provisions
You can be penalised if there is no negotiated agreement by the end of the required six-month negotiating period, and no ballot has been arranged to elect information and consultation (I&C) representatives.
If you fail to abide by the terms of a negotiated I&C agreement or the fall-back provisions, your employees or their representatives can raise a complaint with the Industrial Court. If the Industrial Court upholds the complaint they may issue a compliance notice that will set out the steps you must take in order to meet your obligations and the date by which you must take them.
If the Industrial Court does find that you have not adhered to the terms of a negotiated agreement or the fall-back provisions, then your employees or their representatives may be able to apply to the High Court to request that they make you pay a penalty of up to £75,000. The level of the penalty is based on the severity and impact of the failure.
Enforcement of pre-existing agreements (PEAs)
PEAs are only enforceable by measures that are included in the PEA itself. The Industrial Court has no authority to hear complaints that a party has not adhered to the terms of a PEA.
Confidential information
If you have a negotiated agreement or you are subject to the fall-back provisions, then you should try to share as much information as possible with your employees or their representatives. However, you can justifiably restrict or withhold certain information on the grounds that if it came out, it could harm your business.
If you withhold a piece of information that your employees believe they should be allowed to see, they can appeal to the Industrial Court which will judge whether you are right to withhold it.
Rights and protections for representatives and employees
Your employees who act as representatives either during negotiations or as part of an I&C agreement have the right to take reasonable paid time off to fulfil their duties. You cannot dismiss or subject to detriment any of your employees as a result of their involvement in I&C activity unless they are found to be passing on confidential information. If you do not respect your employees' rights, they may be able to take you to an industrial tribunal.
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Transnational Information and Consultation of Employees (TICE) Regulations 1999
The TICE Regulations apply to multinational businesses operating in the European Economic Area.
The Transnational Information and Consultation of Employees (TICE) Regulations apply to multinational businesses operating in the European Economic Area. They establish the procedures to set up a European Works Council (EWC) to inform and consult on issues that concern the company as a whole. The EWC is made up of representatives from all European member states in which the company has operations.
European Works Council
To set up an EWC, a request must be made in writing by at least 100 of your employees or their representatives in two or more member states. Alternatively, management can decide to set one up on its own initiative.
A special negotiating body (a body comprised of employee representatives) must be set up to negotiate the terms of the EWC agreement with management. The EWC must be set up in accordance with the 'statutory model', if:
- negotiations do not start within six months of receiving a request, or if the parties fail to reach an agreement within three years following the commencement of negotiations
- you refuse to negotiate within six months of receiving an agreement request, or if you fail to come to an agreement within three years
For more details, see European Works Councils.
You must also inform and consult your employees:
- where you are proposing 20 or more redundancies in a 90-day period
- if you are planning on selling your business or buying a new one
- if you are planning certain changes to an occupational or personal pension scheme
Changes as a result of the UK's exit from the EU
Following the UK's withdrawal from the EU the government has amended the TICE regulations so that:
- no new requests to set up an EWC or Information and Consultation procedure can be made by people employed in the UK
- provisions relevant to the ongoing operation of existing EWCs will remain in force
- requests for information or to establish EWCs or Information and Consultation procedures made but not completed before 1 January 2021 will be allowed to complete
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European Works Councils
Information and consultation in multinational companies through European Works Councils.
If your business is part of a multinational organisation that operates in at least two countries in the European Economic Area (EEA), you may be subject to the legislation on transnational information and consultation (I&C).
This gives employees in multinational undertakings with at least 1,000 employees the right to be represented on a European Works Council (EWC).
The EEA is made up of the 27 European Union member states plus Norway, Iceland and Liechtenstein.
People employed in the UK are no longer able to ask their employer to set up an EWC following the UK's exit from the EU. However, if a request to set up an EWC was submitted before 1 January 2021, it will be allowed to complete.
The current representative still may be able to be involved with your business's EWC following the UK's exit from the EU if your business agrees. The government will make sure the enforcement framework, rights, and protections for employees in UK EWCs are still available as far as possible. It is up to your company to decide if they want to include representatives from the UK. If they do, they will still be entitled to paid time off to carry out their role. See participating in a European Works Council.
An EWC is an I&C forum that is designed to allow employees in different EEA nations to be informed and consulted about transnational issues that affect their employer.
Some large multinational organisations have set up EWCs following a request from their employees. However, businesses can start the process of negotiating an EWC agreement themselves.
The transnational I&C legislation applies differently to EWCs:
- established before 15 December 1999
- established on or after 15 December 1999 and where the agreement was signed or revised in the two years before 5 June 2011
- established between 16 December 1999 and 5 June 2011 that have not been revised in the two years before 5 June 2011
- that are yet to be established or were established on or after 5 June 2011
Transnational I&C requirements
If your business has 1,000 or more employees, and has at least 150 employees in each of two or more EEA states, your employees can request that an EWC be set up. For a request to be valid, it must be:
- made by either at least 100 employees in at least two undertakings in two or more EEA countries, or representatives representing that many employees
- in writing and dated
- sent to your business' central or local management
Agency workers do not count towards the number of people in the business in which they are placed. However, they do count towards the number of people employed by the employment agency business providing them.
Once you have received a valid request, you must make the necessary arrangements for your employees to elect or appoint representatives of a special negotiating body (SNB).
You'll have six months to set up the SNB and start negotiations. Otherwise, fall-back provisions will apply.
The SNB should be made up of employees' representatives from each EEA country where your business has employees. Its role is to negotiate with your central management over the composition and terms of the EWC.
EWC agreements
Once an SNB has been set up, the parties have up to three years to negotiate an EWC agreement in order to determine - among other things - exactly how the EWC will be set up, what it will discuss, how often it will meet and what it should be provided with to help it function.
A negotiated EWC agreement must set out:
- what parts of the undertaking will be covered by the agreement
- the composition of the EWC and how long its members will serve
- the functions of the EWC
- the way I&C will take place
- how central management will disclose information
- the venue, frequency and duration of EWC meetings
- how the consultation dialogue with the EWC should link to I&C at the national level
- the financial and material resources that will be available to the EWC
- how long the EWC will last
- how the EWC agreement will be renegotiated
- if a select committee should be set up and, if so, how it will operate
An EWC agreement will need to meet the requirements of the fall-back provisions if:
- the parties decide not to negotiate
- an agreement cannot be reached
- the management and the SNB decide it is so
The fall-back provisions are much more prescriptive about what the employer must consult over and when.
While your central management should try to be as open as possible with your EWC, you can withhold certain information if its disclosure would seriously harm the functioning of the business.
Enforcement of the EWC legislation
The enforcement provisions of the EWC legislation are shared between the Industrial Court and the High Court.
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Informing and consulting employees - best practice
Communicate individually, face-to-face, in writing and by consultation according to the subject and the audience.
Depending on your business' size, nature and structure, the type of information you are sharing, and the input you hope to get, there are a variety of ways to communicate and consult with employees and/or their representatives.
Where you have an information and consultation or European Works Council agreement, a pre-existing agreement, or where you are legally required to inform and consult with employees on other matters (such as health and safety regulations or when considering redundancies), any consulting and informing you carry out must comply with the terms of that agreement or other legal requirements.
Effective communication methods
To communicate individually, you could use:
- one-to-one meetings - for issues specific to the individual
- telephone calls - for home workers and other offsite employees
- email - employees can respond at their convenience
A record should be appropriately kept of such communications. You must comply with the UK General Data Protection Regulation (UK GDPR).
Failure to consult your staff is a regular employment tribunal complaint by employees.
Face-to-face communication methods
Face-to-face methods of communication include:
- group or team briefings - discussion and feedback on issues directly related to the group
- quality circles - groups that meet regularly to solve problems and improve quality
- large-scale meetings - to present the business' performance and long-term objectives to employees or exchange of views
- cascade networks - briefing small groups of people who tell others the same information, to get information across quickly without having to call a meeting
- inter-departmental briefings - to promote a unified approach within larger businesses
Written methods of communication
Written methods include:
- company handbooks - combines company and job-related information
- company newsletters - present information about the business and its people, in print or through email
- employee information notes - reports the business' activities and performance
- departmental bulletins - informs on a sectional, departmental, or wider basis
- notice boards - encourages communication between employees
- intranets - stores company information in a structured way for employee access
- email - communicates with employees in different or isolated locations
Consultation methods
Consultation methods include:
- joint consultative councils/works councils - regular meetings of managers and employee representatives
- joint working parties - resolves specific issues and includes managers and employees
- trade unions - aim to improve terms and conditions for their members
- informal emails - promote a feedback forum for employees to consider and put forward ideas at times convenient to them
- annual staff survey or questionnaire - allows for giving frank views if employees can reply anonymously
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How to achieve good communication between employer and employees
How to encourage a two-way flow of information between employees and managers.
Be clear about what you are trying to achieve and explain to employees, their representatives, or both, whether you are informing, consulting, or negotiating with them.
A two-way flow of information
You should encourage a two-way flow of information between employees and managers. Consider:
- holding regular meetings
- using language your employees understand - not jargon
- keeping discussions focused, relevant, local and timely
- using open-ended questions to draw out ideas from employees
- ensuring your communications reach every employee, ie don't forget part-time workers, home workers, and absent workers (for example, those on statutory leave and those absent due to sickness)
- using social events to break down barriers and build up trust
Communicating sensitive information
When you need to communicate controversial or sensitive issues, eg poor company results, you should do this face-to-face. It's usually better to have a senior manager discussing such important matters. The advantage of spoken, face-to-face communication is that it's a direct and effective way to get across facts. It can't be relied upon completely because misunderstandings and rumours can arise - you may wish to reinforce it with written confirmation, see managing conflict.
You may also want written information available for employees to refer to.
Make sure that whoever talks to the employees is fully briefed, and provide an opportunity for employees to ask questions:
- If you are asked a question you don't know the answer to, say so. You could advise that you would have needed notice of that question as you don't currently have the information to hand for an immediate response. Explain that you will get back to them with an answer in due course. For all employees to be informed you could email all staff once you have an answer to a query that affects them all.
- If there is no answer, explain the reasons for this.
- If you can get an answer by a given deadline, tell them this.
Effective written communication is typically accurate, brief, and clear. It's good practice to have copies of all business policies and information in one place which employees have access to, eg an intranet. Employees can look up procedures, duties, and contract terms at their convenience or when they need clarification.
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Examples of good information and consultation in practice
How to create procedures to communicate and consult with your staff.
A communications policy is an effective way of defining who is responsible for information and consultation (I&C), the channels along which information passes, and the way it is communicated.
If your business is not affected by the legal requirements you should still consult with your employees to establish an I&C agreement.
Establishing an I&C policy
A good I&C policy clearly describes who is responsible for communication at each level and the methods used for communication. It also outlines the arrangements for consultation and for training employees and managers.
Consider involving trade union representatives or other employee representatives when you draw up the policy and throughout the communications and consultation process. You should involve senior managers and get them to take the lead. Make provisions to include your workers in different sites, isolated areas, or those working from home.
Make sure that your communications and consultations are systematic and regular. You should frequently review the policy and be willing to modify it. Tailor your consultative arrangements to your business.
Small companies typically have informal arrangements, but you may need a more formal arrangement so that everyone clearly understands their roles and responsibilities. This is important where consultation is a legal obligation.
Be genuine about your commitment to communication and consider employees' views before making a decision.
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Advantages of communications and consultation training in successful business
Communications and consultation training for managers, employees and trade union representatives.
Training managers and employees in communications skills and techniques can improve communications and consultation practice within your business.
Employees can benefit from understanding the information they are given and it can encourage them to take a more active role in the communications and consultation process. Training can help trade union representatives take a fuller part in communications and consultation.
Benefits of training
Courses can help encourage employee involvement in your business. They can also help you communicate information to employees on a range of issues that relate to their employment. Communication training for managers and employees can help break down any barriers between them.
Training can help managers to:
- understand the importance of good communication and of having a consultation policy
- understand their roles
- encourage those employees who have problems communicating
- understand and meet their legal obligations for informing and consulting
For more information, see skills and training for directors and owners.
Areas of skills development
Useful courses for your employees and managers may cover:
- joint working methods
- effective meetings
- presentation skills
- listening skills
- effective business writing
- interviewing techniques
As with any training, it is a good idea to periodically evaluate the effectiveness of the training course.
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Informing and consulting employees - best practice
In this guide:
- Inform and consult your employees
- Advantages of good employee communication
- Legal requirements for communicating with employees
- Consulting your employees
- The Information and Consultation of Employees Regulations (Northern Ireland) 2005
- ICE Regulations: pre-existing agreements and fall-back provisions
- ICE Regulations: enforcement, protections and confidential information
- Transnational Information and Consultation of Employees (TICE) Regulations 1999
- European Works Councils
- Informing and consulting employees - best practice
- How to achieve good communication between employer and employees
- Examples of good information and consultation in practice
- Advantages of communications and consultation training in successful business
Advantages of good employee communication
Benefits of communicating effectively with your employees.
Communicating with your employees is central to managing your workforce. Poor communication can result in misunderstandings and mistrust.
Benefits of good staff communication
Introducing proper procedures for informing and consulting with your employees can take time and money but you will benefit from improved products, productivity, and competitiveness.
Other benefits of effective consultation and information-sharing include:
- improved employee commitment and job satisfaction, particularly if employees understand what the business is trying to achieve and the effect of their contribution
- increased morale leading to lower turnover of employees and reduced recruitment and training costs
- better employee performance, if they understand targets and deadlines and receive proper feedback
- provision of accurate information or guidance, which helps avoid misunderstandings, eg on health and safety policies, business performance, staff changes, and job structures
- improved management decision-making, due in part to feedback from employees
- improved management/employee relations
- improved exchange of ideas
- consistent approach and strategy across the business
If employees are given inadequate or unclear instructions, they could act in breach of regulations without meaning to. Lack of basic information can also be a breach of workers' rights. See legal requirements for communicating with employees.
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Legal requirements for communicating with employees
Understand your legal requirements for communicating with employees.
As an employer, you are required to inform and consult employees in certain circumstances. See consulting your employees.
You must inform employees of:
-
The main terms and conditions of employment in written form - see the employment contract. This must be provided within two months of an employee commencing employment.
- Any changes in the terms and conditions of employment.
- The reason in writing for dismissing them (for employees with 12 or more months' service). This is only necessary if they request it - unless they are a woman who is dismissed while pregnant or on maternity leave, or statutory adoption leave when in these cases 12 months of service is not required. It can be wise to provide this even to employees who haven't completed 12 months of employment as this clarity of communication can avoid potential misunderstandings and unnecessary claims. Such consideration, even though is not required, is good practice.
- Certain matters when your business is involved, eg in the transfer of an undertaking - see responsibilities to employees if you buy or sell a business.
Collective bargaining
You must give recognised trade unions the information they require for collective bargaining. For more information on recognising trade unions and collective bargaining, see recognising and derecognising a trade union.
Read the Labour Rrelations Agency's guidance on disclosure of information to trade unions for collective bargaining purposes.
You are also required by law to:
- provide employees with an itemised pay slip whenever you pay them
- communicate in writing if asking shop workers or betting workers in Northern Ireland to work on a Sunday - see Sunday working and night working
- consult your employees or their representatives when considering collective redundancies, business transfer or changes to pensions
Regulations give employees of businesses and organisations employing 50 or more employees the right to be informed and consulted on issues affecting them and the business they work for. See legal requirements for informing and consulting employees.
Smaller employers should agree and create formal procedures for informing and consulting with employees, in the interests of good employment relations. See informing and consulting - ways and means and examples of good information and consultation in practice.
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Consulting your employees
Consultation that is required by law and voluntary consultation.
Consultation involves managers and business owners seeking and taking into account the views of employees before making a decision. You are required by law to consult with employees, their representatives, or recognised trade unions on:
- health and safety issues
- changes to the contract of employment
- redundancies
- undertakings or transfers, ie the business is to be sold or part of it is to be contracted out, or the contractor is to be replaced by another
- changes to pension schemes
- training policies, progress, and plans - if the Industrial Court has imposed a bargaining method in the statutory trade union recognition process - see recognising and derecognising a trade union
You must use the appropriate consultation method depending on the circumstances, eg through individual employee consultation, employee representatives, joint consultative committees/works councils, joint working parties, or trade unions/collective bargaining units.
If your business or organisation employs more than 50 employees, your employees can require that you negotiate arrangements to inform or consult them on issues that may affect them and the business. See legal requirements for informing and consulting employees.
Voluntary consultation
Your business may benefit from consulting employees on a regular basis and making staff aware of ways they can contribute ideas and raise concerns. You do not need to have complex structures for consultation - often ad hoc groups can work better. See legal requirements for consulting and informing employees.
For effective consultation, you should consider:
- seeking and considering the views of affected employees
- explaining final decisions - particularly when employees' views are rejected
- giving credit and recognition to those who provide information which improves a decision
- ensuring that the issues for consultation are relevant to the group of employees discussing them
- making the outcome of the meeting or decisions available to everyone
Effective consultation can help avoid minor issues and petty grievances. It is also good for employee morale and their role commitment and dedication to the business aims.
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The Information and Consultation of Employees Regulations (Northern Ireland) 2005
How the ICE Regulations work, including pre-existing agreements and the fall-back provisions.
Under the Information and Consultation of Employees Regulations (Northern Ireland) 2005, if you have 50 or more employees, your employees can request that you set up arrangements to inform and consult them. When a valid employee request is made, you are obliged to negotiate the details of an information and consultation (I&C) agreement with representatives of your employees, unless there is a valid pre-existing agreement in place and you have held a ballot for which employees have supported the pre-existing agreement.
For more information, see legal requirements for communicating with employees.
What is a valid employee request?
If 10% of your employees request that you set up an I&C agreement, you are obliged to do so. That 10% is subject to a minimum of 15 and a maximum of 2,500 employees.
To calculate the size of your workforce, you should calculate the average number of employees in your business over the past 12 months. You can count part-time employees working under a contract of 75 hours or less a month as half of one employee for this calculation.
For an employee request to be valid, it must:
- be in writing
- be dated
- state the names of the employees making the request
If your employees wish to remain anonymous, they may submit a request to the Industrial Court who will inform you that a valid request has been received.
It is possible for a valid request to be made up of a number of requests from different employees over a rolling six-month period - if this achieves the 10% threshold.
Negotiating an I&C agreement
If you receive a valid employee request, you will need to make arrangements to begin negotiating an I&C agreement as soon as is reasonably practicable. You will need to arrange for your employees to elect or appoint a body of representatives to negotiate the agreement with you.
The names of the negotiating representatives must be set out in writing once this has been done.
You will have six months to negotiate the agreement, starting three months from the date that you received the employee request. If you and the employees' representatives agree, you can extend this period indefinitely.
A negotiated agreement must cover all of the employees in the undertaking, so it is advisable to word the agreement in such a way that new employees would be automatically covered. It is also advisable to include a provision stating how a restructuring will be dealt with, for example in terms of any changes to the number and identity of employee representatives.
If you fail to reach an agreement, or do not start negotiations, the fall-back provisions will apply. For more information, see ICE Regulations: pre-existing agreements and fall-back provisions.
You can decide, in agreement with your employees' representatives, the terms of a negotiated agreement. It should set out what you will discuss, when you will discuss it, and how often the discussion will take place. The areas on which you inform and consult are for you and your employees' representatives to agree on.
You can also agree with your employees' representatives whether I&C will take place through employee representatives, directly with your workforce, or with both. If you opt to use representatives, then you should make provision for your employees to elect or appoint them. They do not have to be the same representatives as those who negotiated the agreement. Whilst trade union representatives do not have any special rights to act as an I&C representative, your employees may decide to elect or appoint a trade union representative as an I&C representative.
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ICE Regulations: pre-existing agreements and fall-back provisions
How pre-existing consultation agreements and fall-back provisions affect I&C agreements.
Under the ICE Regulations your employees have the right to request that you create an information and consultation (I&C) agreement. If you already have an I&C agreement in place, you may not need to negotiate a new one. A pre-existing agreement (PEA) may cover more than one undertaking or may have different provisions for different parts of your workforce, or be made up of several different agreements.
Pre-existing agreements
To be valid, a PEA must:
- be in writing
- cover all the employees in the undertaking
- set out how the employer will inform and consult the employees or their representatives
- be approved by the employees
If you have a PEA but 40% or more of your workforce has put in a valid request, you must negotiate a new agreement. However, if the number of employees making the request is 10% or more of the workforce but less than 40%, you can ballot the workforce to decide whether it endorses the request for a new agreement.
If you intend to hold a ballot you must inform your employees of this in writing. You must then wait 21 days before you hold the ballot to allow your employees to challenge the validity of the PEA.
If a ballot is held and 40% of the workforce, and a majority of those who vote, endorse the employee request, you must negotiate a new agreement. Where less than 40% of the workforce, or a minority of those voting, endorses the employee request, you do not have to negotiate a new agreement.
If your employees do not support the request for a new agreement then they cannot put in another request for three years.
Fall-back provisions
If you do not make the necessary arrangements to negotiate an I&C agreement, or negotiations fail, an agreement will be set up according to the standard 'fall-back' provisions. These are set out in the regulations and result in a more rigid and standardised agreement.
You have up to six months after negotiations have failed to arrange the election of I&C representatives. Under the fall-back provisions, you must arrange for the election of one representative per 50 employees or part thereof, with a minimum of two representatives and a maximum of 25.
Under the fall-back provisions, you must inform and consult the representatives on issues as follows:
- inform on the recent and probable development of the organisation's activities and economic situation
- inform and consult on the situation, structure, and probable development of employment within the organisation and, in particular, on any anticipatory measures envisaged where there is a threat to employment
- inform and consult with a view to reaching an agreement on decisions likely to lead to substantial changes in work organisation or contractual relations
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ICE Regulations: enforcement, protections and confidential information
Enforcement mechanisms in the ICE Regulations.
You and your employees are subject to a number of rights and responsibilities under the Information and Consultation of Employees (ICE) Regulations. The Industrial Court is responsible for ensuring that most of these are adhered to.
Enforcement of negotiated agreements and the fall-back provisions
You can be penalised if there is no negotiated agreement by the end of the required six-month negotiating period, and no ballot has been arranged to elect information and consultation (I&C) representatives.
If you fail to abide by the terms of a negotiated I&C agreement or the fall-back provisions, your employees or their representatives can raise a complaint with the Industrial Court. If the Industrial Court upholds the complaint they may issue a compliance notice that will set out the steps you must take in order to meet your obligations and the date by which you must take them.
If the Industrial Court does find that you have not adhered to the terms of a negotiated agreement or the fall-back provisions, then your employees or their representatives may be able to apply to the High Court to request that they make you pay a penalty of up to £75,000. The level of the penalty is based on the severity and impact of the failure.
Enforcement of pre-existing agreements (PEAs)
PEAs are only enforceable by measures that are included in the PEA itself. The Industrial Court has no authority to hear complaints that a party has not adhered to the terms of a PEA.
Confidential information
If you have a negotiated agreement or you are subject to the fall-back provisions, then you should try to share as much information as possible with your employees or their representatives. However, you can justifiably restrict or withhold certain information on the grounds that if it came out, it could harm your business.
If you withhold a piece of information that your employees believe they should be allowed to see, they can appeal to the Industrial Court which will judge whether you are right to withhold it.
Rights and protections for representatives and employees
Your employees who act as representatives either during negotiations or as part of an I&C agreement have the right to take reasonable paid time off to fulfil their duties. You cannot dismiss or subject to detriment any of your employees as a result of their involvement in I&C activity unless they are found to be passing on confidential information. If you do not respect your employees' rights, they may be able to take you to an industrial tribunal.
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Transnational Information and Consultation of Employees (TICE) Regulations 1999
The TICE Regulations apply to multinational businesses operating in the European Economic Area.
The Transnational Information and Consultation of Employees (TICE) Regulations apply to multinational businesses operating in the European Economic Area. They establish the procedures to set up a European Works Council (EWC) to inform and consult on issues that concern the company as a whole. The EWC is made up of representatives from all European member states in which the company has operations.
European Works Council
To set up an EWC, a request must be made in writing by at least 100 of your employees or their representatives in two or more member states. Alternatively, management can decide to set one up on its own initiative.
A special negotiating body (a body comprised of employee representatives) must be set up to negotiate the terms of the EWC agreement with management. The EWC must be set up in accordance with the 'statutory model', if:
- negotiations do not start within six months of receiving a request, or if the parties fail to reach an agreement within three years following the commencement of negotiations
- you refuse to negotiate within six months of receiving an agreement request, or if you fail to come to an agreement within three years
For more details, see European Works Councils.
You must also inform and consult your employees:
- where you are proposing 20 or more redundancies in a 90-day period
- if you are planning on selling your business or buying a new one
- if you are planning certain changes to an occupational or personal pension scheme
Changes as a result of the UK's exit from the EU
Following the UK's withdrawal from the EU the government has amended the TICE regulations so that:
- no new requests to set up an EWC or Information and Consultation procedure can be made by people employed in the UK
- provisions relevant to the ongoing operation of existing EWCs will remain in force
- requests for information or to establish EWCs or Information and Consultation procedures made but not completed before 1 January 2021 will be allowed to complete
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European Works Councils
Information and consultation in multinational companies through European Works Councils.
If your business is part of a multinational organisation that operates in at least two countries in the European Economic Area (EEA), you may be subject to the legislation on transnational information and consultation (I&C).
This gives employees in multinational undertakings with at least 1,000 employees the right to be represented on a European Works Council (EWC).
The EEA is made up of the 27 European Union member states plus Norway, Iceland and Liechtenstein.
People employed in the UK are no longer able to ask their employer to set up an EWC following the UK's exit from the EU. However, if a request to set up an EWC was submitted before 1 January 2021, it will be allowed to complete.
The current representative still may be able to be involved with your business's EWC following the UK's exit from the EU if your business agrees. The government will make sure the enforcement framework, rights, and protections for employees in UK EWCs are still available as far as possible. It is up to your company to decide if they want to include representatives from the UK. If they do, they will still be entitled to paid time off to carry out their role. See participating in a European Works Council.
An EWC is an I&C forum that is designed to allow employees in different EEA nations to be informed and consulted about transnational issues that affect their employer.
Some large multinational organisations have set up EWCs following a request from their employees. However, businesses can start the process of negotiating an EWC agreement themselves.
The transnational I&C legislation applies differently to EWCs:
- established before 15 December 1999
- established on or after 15 December 1999 and where the agreement was signed or revised in the two years before 5 June 2011
- established between 16 December 1999 and 5 June 2011 that have not been revised in the two years before 5 June 2011
- that are yet to be established or were established on or after 5 June 2011
Transnational I&C requirements
If your business has 1,000 or more employees, and has at least 150 employees in each of two or more EEA states, your employees can request that an EWC be set up. For a request to be valid, it must be:
- made by either at least 100 employees in at least two undertakings in two or more EEA countries, or representatives representing that many employees
- in writing and dated
- sent to your business' central or local management
Agency workers do not count towards the number of people in the business in which they are placed. However, they do count towards the number of people employed by the employment agency business providing them.
Once you have received a valid request, you must make the necessary arrangements for your employees to elect or appoint representatives of a special negotiating body (SNB).
You'll have six months to set up the SNB and start negotiations. Otherwise, fall-back provisions will apply.
The SNB should be made up of employees' representatives from each EEA country where your business has employees. Its role is to negotiate with your central management over the composition and terms of the EWC.
EWC agreements
Once an SNB has been set up, the parties have up to three years to negotiate an EWC agreement in order to determine - among other things - exactly how the EWC will be set up, what it will discuss, how often it will meet and what it should be provided with to help it function.
A negotiated EWC agreement must set out:
- what parts of the undertaking will be covered by the agreement
- the composition of the EWC and how long its members will serve
- the functions of the EWC
- the way I&C will take place
- how central management will disclose information
- the venue, frequency and duration of EWC meetings
- how the consultation dialogue with the EWC should link to I&C at the national level
- the financial and material resources that will be available to the EWC
- how long the EWC will last
- how the EWC agreement will be renegotiated
- if a select committee should be set up and, if so, how it will operate
An EWC agreement will need to meet the requirements of the fall-back provisions if:
- the parties decide not to negotiate
- an agreement cannot be reached
- the management and the SNB decide it is so
The fall-back provisions are much more prescriptive about what the employer must consult over and when.
While your central management should try to be as open as possible with your EWC, you can withhold certain information if its disclosure would seriously harm the functioning of the business.
Enforcement of the EWC legislation
The enforcement provisions of the EWC legislation are shared between the Industrial Court and the High Court.
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Informing and consulting employees - best practice
Communicate individually, face-to-face, in writing and by consultation according to the subject and the audience.
Depending on your business' size, nature and structure, the type of information you are sharing, and the input you hope to get, there are a variety of ways to communicate and consult with employees and/or their representatives.
Where you have an information and consultation or European Works Council agreement, a pre-existing agreement, or where you are legally required to inform and consult with employees on other matters (such as health and safety regulations or when considering redundancies), any consulting and informing you carry out must comply with the terms of that agreement or other legal requirements.
Effective communication methods
To communicate individually, you could use:
- one-to-one meetings - for issues specific to the individual
- telephone calls - for home workers and other offsite employees
- email - employees can respond at their convenience
A record should be appropriately kept of such communications. You must comply with the UK General Data Protection Regulation (UK GDPR).
Failure to consult your staff is a regular employment tribunal complaint by employees.
Face-to-face communication methods
Face-to-face methods of communication include:
- group or team briefings - discussion and feedback on issues directly related to the group
- quality circles - groups that meet regularly to solve problems and improve quality
- large-scale meetings - to present the business' performance and long-term objectives to employees or exchange of views
- cascade networks - briefing small groups of people who tell others the same information, to get information across quickly without having to call a meeting
- inter-departmental briefings - to promote a unified approach within larger businesses
Written methods of communication
Written methods include:
- company handbooks - combines company and job-related information
- company newsletters - present information about the business and its people, in print or through email
- employee information notes - reports the business' activities and performance
- departmental bulletins - informs on a sectional, departmental, or wider basis
- notice boards - encourages communication between employees
- intranets - stores company information in a structured way for employee access
- email - communicates with employees in different or isolated locations
Consultation methods
Consultation methods include:
- joint consultative councils/works councils - regular meetings of managers and employee representatives
- joint working parties - resolves specific issues and includes managers and employees
- trade unions - aim to improve terms and conditions for their members
- informal emails - promote a feedback forum for employees to consider and put forward ideas at times convenient to them
- annual staff survey or questionnaire - allows for giving frank views if employees can reply anonymously
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How to achieve good communication between employer and employees
How to encourage a two-way flow of information between employees and managers.
Be clear about what you are trying to achieve and explain to employees, their representatives, or both, whether you are informing, consulting, or negotiating with them.
A two-way flow of information
You should encourage a two-way flow of information between employees and managers. Consider:
- holding regular meetings
- using language your employees understand - not jargon
- keeping discussions focused, relevant, local and timely
- using open-ended questions to draw out ideas from employees
- ensuring your communications reach every employee, ie don't forget part-time workers, home workers, and absent workers (for example, those on statutory leave and those absent due to sickness)
- using social events to break down barriers and build up trust
Communicating sensitive information
When you need to communicate controversial or sensitive issues, eg poor company results, you should do this face-to-face. It's usually better to have a senior manager discussing such important matters. The advantage of spoken, face-to-face communication is that it's a direct and effective way to get across facts. It can't be relied upon completely because misunderstandings and rumours can arise - you may wish to reinforce it with written confirmation, see managing conflict.
You may also want written information available for employees to refer to.
Make sure that whoever talks to the employees is fully briefed, and provide an opportunity for employees to ask questions:
- If you are asked a question you don't know the answer to, say so. You could advise that you would have needed notice of that question as you don't currently have the information to hand for an immediate response. Explain that you will get back to them with an answer in due course. For all employees to be informed you could email all staff once you have an answer to a query that affects them all.
- If there is no answer, explain the reasons for this.
- If you can get an answer by a given deadline, tell them this.
Effective written communication is typically accurate, brief, and clear. It's good practice to have copies of all business policies and information in one place which employees have access to, eg an intranet. Employees can look up procedures, duties, and contract terms at their convenience or when they need clarification.
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Examples of good information and consultation in practice
How to create procedures to communicate and consult with your staff.
A communications policy is an effective way of defining who is responsible for information and consultation (I&C), the channels along which information passes, and the way it is communicated.
If your business is not affected by the legal requirements you should still consult with your employees to establish an I&C agreement.
Establishing an I&C policy
A good I&C policy clearly describes who is responsible for communication at each level and the methods used for communication. It also outlines the arrangements for consultation and for training employees and managers.
Consider involving trade union representatives or other employee representatives when you draw up the policy and throughout the communications and consultation process. You should involve senior managers and get them to take the lead. Make provisions to include your workers in different sites, isolated areas, or those working from home.
Make sure that your communications and consultations are systematic and regular. You should frequently review the policy and be willing to modify it. Tailor your consultative arrangements to your business.
Small companies typically have informal arrangements, but you may need a more formal arrangement so that everyone clearly understands their roles and responsibilities. This is important where consultation is a legal obligation.
Be genuine about your commitment to communication and consider employees' views before making a decision.
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Advantages of communications and consultation training in successful business
Communications and consultation training for managers, employees and trade union representatives.
Training managers and employees in communications skills and techniques can improve communications and consultation practice within your business.
Employees can benefit from understanding the information they are given and it can encourage them to take a more active role in the communications and consultation process. Training can help trade union representatives take a fuller part in communications and consultation.
Benefits of training
Courses can help encourage employee involvement in your business. They can also help you communicate information to employees on a range of issues that relate to their employment. Communication training for managers and employees can help break down any barriers between them.
Training can help managers to:
- understand the importance of good communication and of having a consultation policy
- understand their roles
- encourage those employees who have problems communicating
- understand and meet their legal obligations for informing and consulting
For more information, see skills and training for directors and owners.
Areas of skills development
Useful courses for your employees and managers may cover:
- joint working methods
- effective meetings
- presentation skills
- listening skills
- effective business writing
- interviewing techniques
As with any training, it is a good idea to periodically evaluate the effectiveness of the training course.
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Consulting your employees
In this guide:
- Inform and consult your employees
- Advantages of good employee communication
- Legal requirements for communicating with employees
- Consulting your employees
- The Information and Consultation of Employees Regulations (Northern Ireland) 2005
- ICE Regulations: pre-existing agreements and fall-back provisions
- ICE Regulations: enforcement, protections and confidential information
- Transnational Information and Consultation of Employees (TICE) Regulations 1999
- European Works Councils
- Informing and consulting employees - best practice
- How to achieve good communication between employer and employees
- Examples of good information and consultation in practice
- Advantages of communications and consultation training in successful business
Advantages of good employee communication
Benefits of communicating effectively with your employees.
Communicating with your employees is central to managing your workforce. Poor communication can result in misunderstandings and mistrust.
Benefits of good staff communication
Introducing proper procedures for informing and consulting with your employees can take time and money but you will benefit from improved products, productivity, and competitiveness.
Other benefits of effective consultation and information-sharing include:
- improved employee commitment and job satisfaction, particularly if employees understand what the business is trying to achieve and the effect of their contribution
- increased morale leading to lower turnover of employees and reduced recruitment and training costs
- better employee performance, if they understand targets and deadlines and receive proper feedback
- provision of accurate information or guidance, which helps avoid misunderstandings, eg on health and safety policies, business performance, staff changes, and job structures
- improved management decision-making, due in part to feedback from employees
- improved management/employee relations
- improved exchange of ideas
- consistent approach and strategy across the business
If employees are given inadequate or unclear instructions, they could act in breach of regulations without meaning to. Lack of basic information can also be a breach of workers' rights. See legal requirements for communicating with employees.
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Legal requirements for communicating with employees
Understand your legal requirements for communicating with employees.
As an employer, you are required to inform and consult employees in certain circumstances. See consulting your employees.
You must inform employees of:
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The main terms and conditions of employment in written form - see the employment contract. This must be provided within two months of an employee commencing employment.
- Any changes in the terms and conditions of employment.
- The reason in writing for dismissing them (for employees with 12 or more months' service). This is only necessary if they request it - unless they are a woman who is dismissed while pregnant or on maternity leave, or statutory adoption leave when in these cases 12 months of service is not required. It can be wise to provide this even to employees who haven't completed 12 months of employment as this clarity of communication can avoid potential misunderstandings and unnecessary claims. Such consideration, even though is not required, is good practice.
- Certain matters when your business is involved, eg in the transfer of an undertaking - see responsibilities to employees if you buy or sell a business.
Collective bargaining
You must give recognised trade unions the information they require for collective bargaining. For more information on recognising trade unions and collective bargaining, see recognising and derecognising a trade union.
Read the Labour Rrelations Agency's guidance on disclosure of information to trade unions for collective bargaining purposes.
You are also required by law to:
- provide employees with an itemised pay slip whenever you pay them
- communicate in writing if asking shop workers or betting workers in Northern Ireland to work on a Sunday - see Sunday working and night working
- consult your employees or their representatives when considering collective redundancies, business transfer or changes to pensions
Regulations give employees of businesses and organisations employing 50 or more employees the right to be informed and consulted on issues affecting them and the business they work for. See legal requirements for informing and consulting employees.
Smaller employers should agree and create formal procedures for informing and consulting with employees, in the interests of good employment relations. See informing and consulting - ways and means and examples of good information and consultation in practice.
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Consulting your employees
Consultation that is required by law and voluntary consultation.
Consultation involves managers and business owners seeking and taking into account the views of employees before making a decision. You are required by law to consult with employees, their representatives, or recognised trade unions on:
- health and safety issues
- changes to the contract of employment
- redundancies
- undertakings or transfers, ie the business is to be sold or part of it is to be contracted out, or the contractor is to be replaced by another
- changes to pension schemes
- training policies, progress, and plans - if the Industrial Court has imposed a bargaining method in the statutory trade union recognition process - see recognising and derecognising a trade union
You must use the appropriate consultation method depending on the circumstances, eg through individual employee consultation, employee representatives, joint consultative committees/works councils, joint working parties, or trade unions/collective bargaining units.
If your business or organisation employs more than 50 employees, your employees can require that you negotiate arrangements to inform or consult them on issues that may affect them and the business. See legal requirements for informing and consulting employees.
Voluntary consultation
Your business may benefit from consulting employees on a regular basis and making staff aware of ways they can contribute ideas and raise concerns. You do not need to have complex structures for consultation - often ad hoc groups can work better. See legal requirements for consulting and informing employees.
For effective consultation, you should consider:
- seeking and considering the views of affected employees
- explaining final decisions - particularly when employees' views are rejected
- giving credit and recognition to those who provide information which improves a decision
- ensuring that the issues for consultation are relevant to the group of employees discussing them
- making the outcome of the meeting or decisions available to everyone
Effective consultation can help avoid minor issues and petty grievances. It is also good for employee morale and their role commitment and dedication to the business aims.
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The Information and Consultation of Employees Regulations (Northern Ireland) 2005
How the ICE Regulations work, including pre-existing agreements and the fall-back provisions.
Under the Information and Consultation of Employees Regulations (Northern Ireland) 2005, if you have 50 or more employees, your employees can request that you set up arrangements to inform and consult them. When a valid employee request is made, you are obliged to negotiate the details of an information and consultation (I&C) agreement with representatives of your employees, unless there is a valid pre-existing agreement in place and you have held a ballot for which employees have supported the pre-existing agreement.
For more information, see legal requirements for communicating with employees.
What is a valid employee request?
If 10% of your employees request that you set up an I&C agreement, you are obliged to do so. That 10% is subject to a minimum of 15 and a maximum of 2,500 employees.
To calculate the size of your workforce, you should calculate the average number of employees in your business over the past 12 months. You can count part-time employees working under a contract of 75 hours or less a month as half of one employee for this calculation.
For an employee request to be valid, it must:
- be in writing
- be dated
- state the names of the employees making the request
If your employees wish to remain anonymous, they may submit a request to the Industrial Court who will inform you that a valid request has been received.
It is possible for a valid request to be made up of a number of requests from different employees over a rolling six-month period - if this achieves the 10% threshold.
Negotiating an I&C agreement
If you receive a valid employee request, you will need to make arrangements to begin negotiating an I&C agreement as soon as is reasonably practicable. You will need to arrange for your employees to elect or appoint a body of representatives to negotiate the agreement with you.
The names of the negotiating representatives must be set out in writing once this has been done.
You will have six months to negotiate the agreement, starting three months from the date that you received the employee request. If you and the employees' representatives agree, you can extend this period indefinitely.
A negotiated agreement must cover all of the employees in the undertaking, so it is advisable to word the agreement in such a way that new employees would be automatically covered. It is also advisable to include a provision stating how a restructuring will be dealt with, for example in terms of any changes to the number and identity of employee representatives.
If you fail to reach an agreement, or do not start negotiations, the fall-back provisions will apply. For more information, see ICE Regulations: pre-existing agreements and fall-back provisions.
You can decide, in agreement with your employees' representatives, the terms of a negotiated agreement. It should set out what you will discuss, when you will discuss it, and how often the discussion will take place. The areas on which you inform and consult are for you and your employees' representatives to agree on.
You can also agree with your employees' representatives whether I&C will take place through employee representatives, directly with your workforce, or with both. If you opt to use representatives, then you should make provision for your employees to elect or appoint them. They do not have to be the same representatives as those who negotiated the agreement. Whilst trade union representatives do not have any special rights to act as an I&C representative, your employees may decide to elect or appoint a trade union representative as an I&C representative.
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ICE Regulations: pre-existing agreements and fall-back provisions
How pre-existing consultation agreements and fall-back provisions affect I&C agreements.
Under the ICE Regulations your employees have the right to request that you create an information and consultation (I&C) agreement. If you already have an I&C agreement in place, you may not need to negotiate a new one. A pre-existing agreement (PEA) may cover more than one undertaking or may have different provisions for different parts of your workforce, or be made up of several different agreements.
Pre-existing agreements
To be valid, a PEA must:
- be in writing
- cover all the employees in the undertaking
- set out how the employer will inform and consult the employees or their representatives
- be approved by the employees
If you have a PEA but 40% or more of your workforce has put in a valid request, you must negotiate a new agreement. However, if the number of employees making the request is 10% or more of the workforce but less than 40%, you can ballot the workforce to decide whether it endorses the request for a new agreement.
If you intend to hold a ballot you must inform your employees of this in writing. You must then wait 21 days before you hold the ballot to allow your employees to challenge the validity of the PEA.
If a ballot is held and 40% of the workforce, and a majority of those who vote, endorse the employee request, you must negotiate a new agreement. Where less than 40% of the workforce, or a minority of those voting, endorses the employee request, you do not have to negotiate a new agreement.
If your employees do not support the request for a new agreement then they cannot put in another request for three years.
Fall-back provisions
If you do not make the necessary arrangements to negotiate an I&C agreement, or negotiations fail, an agreement will be set up according to the standard 'fall-back' provisions. These are set out in the regulations and result in a more rigid and standardised agreement.
You have up to six months after negotiations have failed to arrange the election of I&C representatives. Under the fall-back provisions, you must arrange for the election of one representative per 50 employees or part thereof, with a minimum of two representatives and a maximum of 25.
Under the fall-back provisions, you must inform and consult the representatives on issues as follows:
- inform on the recent and probable development of the organisation's activities and economic situation
- inform and consult on the situation, structure, and probable development of employment within the organisation and, in particular, on any anticipatory measures envisaged where there is a threat to employment
- inform and consult with a view to reaching an agreement on decisions likely to lead to substantial changes in work organisation or contractual relations
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ICE Regulations: enforcement, protections and confidential information
Enforcement mechanisms in the ICE Regulations.
You and your employees are subject to a number of rights and responsibilities under the Information and Consultation of Employees (ICE) Regulations. The Industrial Court is responsible for ensuring that most of these are adhered to.
Enforcement of negotiated agreements and the fall-back provisions
You can be penalised if there is no negotiated agreement by the end of the required six-month negotiating period, and no ballot has been arranged to elect information and consultation (I&C) representatives.
If you fail to abide by the terms of a negotiated I&C agreement or the fall-back provisions, your employees or their representatives can raise a complaint with the Industrial Court. If the Industrial Court upholds the complaint they may issue a compliance notice that will set out the steps you must take in order to meet your obligations and the date by which you must take them.
If the Industrial Court does find that you have not adhered to the terms of a negotiated agreement or the fall-back provisions, then your employees or their representatives may be able to apply to the High Court to request that they make you pay a penalty of up to £75,000. The level of the penalty is based on the severity and impact of the failure.
Enforcement of pre-existing agreements (PEAs)
PEAs are only enforceable by measures that are included in the PEA itself. The Industrial Court has no authority to hear complaints that a party has not adhered to the terms of a PEA.
Confidential information
If you have a negotiated agreement or you are subject to the fall-back provisions, then you should try to share as much information as possible with your employees or their representatives. However, you can justifiably restrict or withhold certain information on the grounds that if it came out, it could harm your business.
If you withhold a piece of information that your employees believe they should be allowed to see, they can appeal to the Industrial Court which will judge whether you are right to withhold it.
Rights and protections for representatives and employees
Your employees who act as representatives either during negotiations or as part of an I&C agreement have the right to take reasonable paid time off to fulfil their duties. You cannot dismiss or subject to detriment any of your employees as a result of their involvement in I&C activity unless they are found to be passing on confidential information. If you do not respect your employees' rights, they may be able to take you to an industrial tribunal.
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Transnational Information and Consultation of Employees (TICE) Regulations 1999
The TICE Regulations apply to multinational businesses operating in the European Economic Area.
The Transnational Information and Consultation of Employees (TICE) Regulations apply to multinational businesses operating in the European Economic Area. They establish the procedures to set up a European Works Council (EWC) to inform and consult on issues that concern the company as a whole. The EWC is made up of representatives from all European member states in which the company has operations.
European Works Council
To set up an EWC, a request must be made in writing by at least 100 of your employees or their representatives in two or more member states. Alternatively, management can decide to set one up on its own initiative.
A special negotiating body (a body comprised of employee representatives) must be set up to negotiate the terms of the EWC agreement with management. The EWC must be set up in accordance with the 'statutory model', if:
- negotiations do not start within six months of receiving a request, or if the parties fail to reach an agreement within three years following the commencement of negotiations
- you refuse to negotiate within six months of receiving an agreement request, or if you fail to come to an agreement within three years
For more details, see European Works Councils.
You must also inform and consult your employees:
- where you are proposing 20 or more redundancies in a 90-day period
- if you are planning on selling your business or buying a new one
- if you are planning certain changes to an occupational or personal pension scheme
Changes as a result of the UK's exit from the EU
Following the UK's withdrawal from the EU the government has amended the TICE regulations so that:
- no new requests to set up an EWC or Information and Consultation procedure can be made by people employed in the UK
- provisions relevant to the ongoing operation of existing EWCs will remain in force
- requests for information or to establish EWCs or Information and Consultation procedures made but not completed before 1 January 2021 will be allowed to complete
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European Works Councils
Information and consultation in multinational companies through European Works Councils.
If your business is part of a multinational organisation that operates in at least two countries in the European Economic Area (EEA), you may be subject to the legislation on transnational information and consultation (I&C).
This gives employees in multinational undertakings with at least 1,000 employees the right to be represented on a European Works Council (EWC).
The EEA is made up of the 27 European Union member states plus Norway, Iceland and Liechtenstein.
People employed in the UK are no longer able to ask their employer to set up an EWC following the UK's exit from the EU. However, if a request to set up an EWC was submitted before 1 January 2021, it will be allowed to complete.
The current representative still may be able to be involved with your business's EWC following the UK's exit from the EU if your business agrees. The government will make sure the enforcement framework, rights, and protections for employees in UK EWCs are still available as far as possible. It is up to your company to decide if they want to include representatives from the UK. If they do, they will still be entitled to paid time off to carry out their role. See participating in a European Works Council.
An EWC is an I&C forum that is designed to allow employees in different EEA nations to be informed and consulted about transnational issues that affect their employer.
Some large multinational organisations have set up EWCs following a request from their employees. However, businesses can start the process of negotiating an EWC agreement themselves.
The transnational I&C legislation applies differently to EWCs:
- established before 15 December 1999
- established on or after 15 December 1999 and where the agreement was signed or revised in the two years before 5 June 2011
- established between 16 December 1999 and 5 June 2011 that have not been revised in the two years before 5 June 2011
- that are yet to be established or were established on or after 5 June 2011
Transnational I&C requirements
If your business has 1,000 or more employees, and has at least 150 employees in each of two or more EEA states, your employees can request that an EWC be set up. For a request to be valid, it must be:
- made by either at least 100 employees in at least two undertakings in two or more EEA countries, or representatives representing that many employees
- in writing and dated
- sent to your business' central or local management
Agency workers do not count towards the number of people in the business in which they are placed. However, they do count towards the number of people employed by the employment agency business providing them.
Once you have received a valid request, you must make the necessary arrangements for your employees to elect or appoint representatives of a special negotiating body (SNB).
You'll have six months to set up the SNB and start negotiations. Otherwise, fall-back provisions will apply.
The SNB should be made up of employees' representatives from each EEA country where your business has employees. Its role is to negotiate with your central management over the composition and terms of the EWC.
EWC agreements
Once an SNB has been set up, the parties have up to three years to negotiate an EWC agreement in order to determine - among other things - exactly how the EWC will be set up, what it will discuss, how often it will meet and what it should be provided with to help it function.
A negotiated EWC agreement must set out:
- what parts of the undertaking will be covered by the agreement
- the composition of the EWC and how long its members will serve
- the functions of the EWC
- the way I&C will take place
- how central management will disclose information
- the venue, frequency and duration of EWC meetings
- how the consultation dialogue with the EWC should link to I&C at the national level
- the financial and material resources that will be available to the EWC
- how long the EWC will last
- how the EWC agreement will be renegotiated
- if a select committee should be set up and, if so, how it will operate
An EWC agreement will need to meet the requirements of the fall-back provisions if:
- the parties decide not to negotiate
- an agreement cannot be reached
- the management and the SNB decide it is so
The fall-back provisions are much more prescriptive about what the employer must consult over and when.
While your central management should try to be as open as possible with your EWC, you can withhold certain information if its disclosure would seriously harm the functioning of the business.
Enforcement of the EWC legislation
The enforcement provisions of the EWC legislation are shared between the Industrial Court and the High Court.
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Informing and consulting employees - best practice
Communicate individually, face-to-face, in writing and by consultation according to the subject and the audience.
Depending on your business' size, nature and structure, the type of information you are sharing, and the input you hope to get, there are a variety of ways to communicate and consult with employees and/or their representatives.
Where you have an information and consultation or European Works Council agreement, a pre-existing agreement, or where you are legally required to inform and consult with employees on other matters (such as health and safety regulations or when considering redundancies), any consulting and informing you carry out must comply with the terms of that agreement or other legal requirements.
Effective communication methods
To communicate individually, you could use:
- one-to-one meetings - for issues specific to the individual
- telephone calls - for home workers and other offsite employees
- email - employees can respond at their convenience
A record should be appropriately kept of such communications. You must comply with the UK General Data Protection Regulation (UK GDPR).
Failure to consult your staff is a regular employment tribunal complaint by employees.
Face-to-face communication methods
Face-to-face methods of communication include:
- group or team briefings - discussion and feedback on issues directly related to the group
- quality circles - groups that meet regularly to solve problems and improve quality
- large-scale meetings - to present the business' performance and long-term objectives to employees or exchange of views
- cascade networks - briefing small groups of people who tell others the same information, to get information across quickly without having to call a meeting
- inter-departmental briefings - to promote a unified approach within larger businesses
Written methods of communication
Written methods include:
- company handbooks - combines company and job-related information
- company newsletters - present information about the business and its people, in print or through email
- employee information notes - reports the business' activities and performance
- departmental bulletins - informs on a sectional, departmental, or wider basis
- notice boards - encourages communication between employees
- intranets - stores company information in a structured way for employee access
- email - communicates with employees in different or isolated locations
Consultation methods
Consultation methods include:
- joint consultative councils/works councils - regular meetings of managers and employee representatives
- joint working parties - resolves specific issues and includes managers and employees
- trade unions - aim to improve terms and conditions for their members
- informal emails - promote a feedback forum for employees to consider and put forward ideas at times convenient to them
- annual staff survey or questionnaire - allows for giving frank views if employees can reply anonymously
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How to achieve good communication between employer and employees
How to encourage a two-way flow of information between employees and managers.
Be clear about what you are trying to achieve and explain to employees, their representatives, or both, whether you are informing, consulting, or negotiating with them.
A two-way flow of information
You should encourage a two-way flow of information between employees and managers. Consider:
- holding regular meetings
- using language your employees understand - not jargon
- keeping discussions focused, relevant, local and timely
- using open-ended questions to draw out ideas from employees
- ensuring your communications reach every employee, ie don't forget part-time workers, home workers, and absent workers (for example, those on statutory leave and those absent due to sickness)
- using social events to break down barriers and build up trust
Communicating sensitive information
When you need to communicate controversial or sensitive issues, eg poor company results, you should do this face-to-face. It's usually better to have a senior manager discussing such important matters. The advantage of spoken, face-to-face communication is that it's a direct and effective way to get across facts. It can't be relied upon completely because misunderstandings and rumours can arise - you may wish to reinforce it with written confirmation, see managing conflict.
You may also want written information available for employees to refer to.
Make sure that whoever talks to the employees is fully briefed, and provide an opportunity for employees to ask questions:
- If you are asked a question you don't know the answer to, say so. You could advise that you would have needed notice of that question as you don't currently have the information to hand for an immediate response. Explain that you will get back to them with an answer in due course. For all employees to be informed you could email all staff once you have an answer to a query that affects them all.
- If there is no answer, explain the reasons for this.
- If you can get an answer by a given deadline, tell them this.
Effective written communication is typically accurate, brief, and clear. It's good practice to have copies of all business policies and information in one place which employees have access to, eg an intranet. Employees can look up procedures, duties, and contract terms at their convenience or when they need clarification.
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Examples of good information and consultation in practice
How to create procedures to communicate and consult with your staff.
A communications policy is an effective way of defining who is responsible for information and consultation (I&C), the channels along which information passes, and the way it is communicated.
If your business is not affected by the legal requirements you should still consult with your employees to establish an I&C agreement.
Establishing an I&C policy
A good I&C policy clearly describes who is responsible for communication at each level and the methods used for communication. It also outlines the arrangements for consultation and for training employees and managers.
Consider involving trade union representatives or other employee representatives when you draw up the policy and throughout the communications and consultation process. You should involve senior managers and get them to take the lead. Make provisions to include your workers in different sites, isolated areas, or those working from home.
Make sure that your communications and consultations are systematic and regular. You should frequently review the policy and be willing to modify it. Tailor your consultative arrangements to your business.
Small companies typically have informal arrangements, but you may need a more formal arrangement so that everyone clearly understands their roles and responsibilities. This is important where consultation is a legal obligation.
Be genuine about your commitment to communication and consider employees' views before making a decision.
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Advantages of communications and consultation training in successful business
Communications and consultation training for managers, employees and trade union representatives.
Training managers and employees in communications skills and techniques can improve communications and consultation practice within your business.
Employees can benefit from understanding the information they are given and it can encourage them to take a more active role in the communications and consultation process. Training can help trade union representatives take a fuller part in communications and consultation.
Benefits of training
Courses can help encourage employee involvement in your business. They can also help you communicate information to employees on a range of issues that relate to their employment. Communication training for managers and employees can help break down any barriers between them.
Training can help managers to:
- understand the importance of good communication and of having a consultation policy
- understand their roles
- encourage those employees who have problems communicating
- understand and meet their legal obligations for informing and consulting
For more information, see skills and training for directors and owners.
Areas of skills development
Useful courses for your employees and managers may cover:
- joint working methods
- effective meetings
- presentation skills
- listening skills
- effective business writing
- interviewing techniques
As with any training, it is a good idea to periodically evaluate the effectiveness of the training course.
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Legal requirements for communicating with employees
In this guide:
- Inform and consult your employees
- Advantages of good employee communication
- Legal requirements for communicating with employees
- Consulting your employees
- The Information and Consultation of Employees Regulations (Northern Ireland) 2005
- ICE Regulations: pre-existing agreements and fall-back provisions
- ICE Regulations: enforcement, protections and confidential information
- Transnational Information and Consultation of Employees (TICE) Regulations 1999
- European Works Councils
- Informing and consulting employees - best practice
- How to achieve good communication between employer and employees
- Examples of good information and consultation in practice
- Advantages of communications and consultation training in successful business
Advantages of good employee communication
Benefits of communicating effectively with your employees.
Communicating with your employees is central to managing your workforce. Poor communication can result in misunderstandings and mistrust.
Benefits of good staff communication
Introducing proper procedures for informing and consulting with your employees can take time and money but you will benefit from improved products, productivity, and competitiveness.
Other benefits of effective consultation and information-sharing include:
- improved employee commitment and job satisfaction, particularly if employees understand what the business is trying to achieve and the effect of their contribution
- increased morale leading to lower turnover of employees and reduced recruitment and training costs
- better employee performance, if they understand targets and deadlines and receive proper feedback
- provision of accurate information or guidance, which helps avoid misunderstandings, eg on health and safety policies, business performance, staff changes, and job structures
- improved management decision-making, due in part to feedback from employees
- improved management/employee relations
- improved exchange of ideas
- consistent approach and strategy across the business
If employees are given inadequate or unclear instructions, they could act in breach of regulations without meaning to. Lack of basic information can also be a breach of workers' rights. See legal requirements for communicating with employees.
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Legal requirements for communicating with employees
Understand your legal requirements for communicating with employees.
As an employer, you are required to inform and consult employees in certain circumstances. See consulting your employees.
You must inform employees of:
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The main terms and conditions of employment in written form - see the employment contract. This must be provided within two months of an employee commencing employment.
- Any changes in the terms and conditions of employment.
- The reason in writing for dismissing them (for employees with 12 or more months' service). This is only necessary if they request it - unless they are a woman who is dismissed while pregnant or on maternity leave, or statutory adoption leave when in these cases 12 months of service is not required. It can be wise to provide this even to employees who haven't completed 12 months of employment as this clarity of communication can avoid potential misunderstandings and unnecessary claims. Such consideration, even though is not required, is good practice.
- Certain matters when your business is involved, eg in the transfer of an undertaking - see responsibilities to employees if you buy or sell a business.
Collective bargaining
You must give recognised trade unions the information they require for collective bargaining. For more information on recognising trade unions and collective bargaining, see recognising and derecognising a trade union.
Read the Labour Rrelations Agency's guidance on disclosure of information to trade unions for collective bargaining purposes.
You are also required by law to:
- provide employees with an itemised pay slip whenever you pay them
- communicate in writing if asking shop workers or betting workers in Northern Ireland to work on a Sunday - see Sunday working and night working
- consult your employees or their representatives when considering collective redundancies, business transfer or changes to pensions
Regulations give employees of businesses and organisations employing 50 or more employees the right to be informed and consulted on issues affecting them and the business they work for. See legal requirements for informing and consulting employees.
Smaller employers should agree and create formal procedures for informing and consulting with employees, in the interests of good employment relations. See informing and consulting - ways and means and examples of good information and consultation in practice.
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Consulting your employees
Consultation that is required by law and voluntary consultation.
Consultation involves managers and business owners seeking and taking into account the views of employees before making a decision. You are required by law to consult with employees, their representatives, or recognised trade unions on:
- health and safety issues
- changes to the contract of employment
- redundancies
- undertakings or transfers, ie the business is to be sold or part of it is to be contracted out, or the contractor is to be replaced by another
- changes to pension schemes
- training policies, progress, and plans - if the Industrial Court has imposed a bargaining method in the statutory trade union recognition process - see recognising and derecognising a trade union
You must use the appropriate consultation method depending on the circumstances, eg through individual employee consultation, employee representatives, joint consultative committees/works councils, joint working parties, or trade unions/collective bargaining units.
If your business or organisation employs more than 50 employees, your employees can require that you negotiate arrangements to inform or consult them on issues that may affect them and the business. See legal requirements for informing and consulting employees.
Voluntary consultation
Your business may benefit from consulting employees on a regular basis and making staff aware of ways they can contribute ideas and raise concerns. You do not need to have complex structures for consultation - often ad hoc groups can work better. See legal requirements for consulting and informing employees.
For effective consultation, you should consider:
- seeking and considering the views of affected employees
- explaining final decisions - particularly when employees' views are rejected
- giving credit and recognition to those who provide information which improves a decision
- ensuring that the issues for consultation are relevant to the group of employees discussing them
- making the outcome of the meeting or decisions available to everyone
Effective consultation can help avoid minor issues and petty grievances. It is also good for employee morale and their role commitment and dedication to the business aims.
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The Information and Consultation of Employees Regulations (Northern Ireland) 2005
How the ICE Regulations work, including pre-existing agreements and the fall-back provisions.
Under the Information and Consultation of Employees Regulations (Northern Ireland) 2005, if you have 50 or more employees, your employees can request that you set up arrangements to inform and consult them. When a valid employee request is made, you are obliged to negotiate the details of an information and consultation (I&C) agreement with representatives of your employees, unless there is a valid pre-existing agreement in place and you have held a ballot for which employees have supported the pre-existing agreement.
For more information, see legal requirements for communicating with employees.
What is a valid employee request?
If 10% of your employees request that you set up an I&C agreement, you are obliged to do so. That 10% is subject to a minimum of 15 and a maximum of 2,500 employees.
To calculate the size of your workforce, you should calculate the average number of employees in your business over the past 12 months. You can count part-time employees working under a contract of 75 hours or less a month as half of one employee for this calculation.
For an employee request to be valid, it must:
- be in writing
- be dated
- state the names of the employees making the request
If your employees wish to remain anonymous, they may submit a request to the Industrial Court who will inform you that a valid request has been received.
It is possible for a valid request to be made up of a number of requests from different employees over a rolling six-month period - if this achieves the 10% threshold.
Negotiating an I&C agreement
If you receive a valid employee request, you will need to make arrangements to begin negotiating an I&C agreement as soon as is reasonably practicable. You will need to arrange for your employees to elect or appoint a body of representatives to negotiate the agreement with you.
The names of the negotiating representatives must be set out in writing once this has been done.
You will have six months to negotiate the agreement, starting three months from the date that you received the employee request. If you and the employees' representatives agree, you can extend this period indefinitely.
A negotiated agreement must cover all of the employees in the undertaking, so it is advisable to word the agreement in such a way that new employees would be automatically covered. It is also advisable to include a provision stating how a restructuring will be dealt with, for example in terms of any changes to the number and identity of employee representatives.
If you fail to reach an agreement, or do not start negotiations, the fall-back provisions will apply. For more information, see ICE Regulations: pre-existing agreements and fall-back provisions.
You can decide, in agreement with your employees' representatives, the terms of a negotiated agreement. It should set out what you will discuss, when you will discuss it, and how often the discussion will take place. The areas on which you inform and consult are for you and your employees' representatives to agree on.
You can also agree with your employees' representatives whether I&C will take place through employee representatives, directly with your workforce, or with both. If you opt to use representatives, then you should make provision for your employees to elect or appoint them. They do not have to be the same representatives as those who negotiated the agreement. Whilst trade union representatives do not have any special rights to act as an I&C representative, your employees may decide to elect or appoint a trade union representative as an I&C representative.
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ICE Regulations: pre-existing agreements and fall-back provisions
How pre-existing consultation agreements and fall-back provisions affect I&C agreements.
Under the ICE Regulations your employees have the right to request that you create an information and consultation (I&C) agreement. If you already have an I&C agreement in place, you may not need to negotiate a new one. A pre-existing agreement (PEA) may cover more than one undertaking or may have different provisions for different parts of your workforce, or be made up of several different agreements.
Pre-existing agreements
To be valid, a PEA must:
- be in writing
- cover all the employees in the undertaking
- set out how the employer will inform and consult the employees or their representatives
- be approved by the employees
If you have a PEA but 40% or more of your workforce has put in a valid request, you must negotiate a new agreement. However, if the number of employees making the request is 10% or more of the workforce but less than 40%, you can ballot the workforce to decide whether it endorses the request for a new agreement.
If you intend to hold a ballot you must inform your employees of this in writing. You must then wait 21 days before you hold the ballot to allow your employees to challenge the validity of the PEA.
If a ballot is held and 40% of the workforce, and a majority of those who vote, endorse the employee request, you must negotiate a new agreement. Where less than 40% of the workforce, or a minority of those voting, endorses the employee request, you do not have to negotiate a new agreement.
If your employees do not support the request for a new agreement then they cannot put in another request for three years.
Fall-back provisions
If you do not make the necessary arrangements to negotiate an I&C agreement, or negotiations fail, an agreement will be set up according to the standard 'fall-back' provisions. These are set out in the regulations and result in a more rigid and standardised agreement.
You have up to six months after negotiations have failed to arrange the election of I&C representatives. Under the fall-back provisions, you must arrange for the election of one representative per 50 employees or part thereof, with a minimum of two representatives and a maximum of 25.
Under the fall-back provisions, you must inform and consult the representatives on issues as follows:
- inform on the recent and probable development of the organisation's activities and economic situation
- inform and consult on the situation, structure, and probable development of employment within the organisation and, in particular, on any anticipatory measures envisaged where there is a threat to employment
- inform and consult with a view to reaching an agreement on decisions likely to lead to substantial changes in work organisation or contractual relations
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ICE Regulations: enforcement, protections and confidential information
Enforcement mechanisms in the ICE Regulations.
You and your employees are subject to a number of rights and responsibilities under the Information and Consultation of Employees (ICE) Regulations. The Industrial Court is responsible for ensuring that most of these are adhered to.
Enforcement of negotiated agreements and the fall-back provisions
You can be penalised if there is no negotiated agreement by the end of the required six-month negotiating period, and no ballot has been arranged to elect information and consultation (I&C) representatives.
If you fail to abide by the terms of a negotiated I&C agreement or the fall-back provisions, your employees or their representatives can raise a complaint with the Industrial Court. If the Industrial Court upholds the complaint they may issue a compliance notice that will set out the steps you must take in order to meet your obligations and the date by which you must take them.
If the Industrial Court does find that you have not adhered to the terms of a negotiated agreement or the fall-back provisions, then your employees or their representatives may be able to apply to the High Court to request that they make you pay a penalty of up to £75,000. The level of the penalty is based on the severity and impact of the failure.
Enforcement of pre-existing agreements (PEAs)
PEAs are only enforceable by measures that are included in the PEA itself. The Industrial Court has no authority to hear complaints that a party has not adhered to the terms of a PEA.
Confidential information
If you have a negotiated agreement or you are subject to the fall-back provisions, then you should try to share as much information as possible with your employees or their representatives. However, you can justifiably restrict or withhold certain information on the grounds that if it came out, it could harm your business.
If you withhold a piece of information that your employees believe they should be allowed to see, they can appeal to the Industrial Court which will judge whether you are right to withhold it.
Rights and protections for representatives and employees
Your employees who act as representatives either during negotiations or as part of an I&C agreement have the right to take reasonable paid time off to fulfil their duties. You cannot dismiss or subject to detriment any of your employees as a result of their involvement in I&C activity unless they are found to be passing on confidential information. If you do not respect your employees' rights, they may be able to take you to an industrial tribunal.
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Transnational Information and Consultation of Employees (TICE) Regulations 1999
The TICE Regulations apply to multinational businesses operating in the European Economic Area.
The Transnational Information and Consultation of Employees (TICE) Regulations apply to multinational businesses operating in the European Economic Area. They establish the procedures to set up a European Works Council (EWC) to inform and consult on issues that concern the company as a whole. The EWC is made up of representatives from all European member states in which the company has operations.
European Works Council
To set up an EWC, a request must be made in writing by at least 100 of your employees or their representatives in two or more member states. Alternatively, management can decide to set one up on its own initiative.
A special negotiating body (a body comprised of employee representatives) must be set up to negotiate the terms of the EWC agreement with management. The EWC must be set up in accordance with the 'statutory model', if:
- negotiations do not start within six months of receiving a request, or if the parties fail to reach an agreement within three years following the commencement of negotiations
- you refuse to negotiate within six months of receiving an agreement request, or if you fail to come to an agreement within three years
For more details, see European Works Councils.
You must also inform and consult your employees:
- where you are proposing 20 or more redundancies in a 90-day period
- if you are planning on selling your business or buying a new one
- if you are planning certain changes to an occupational or personal pension scheme
Changes as a result of the UK's exit from the EU
Following the UK's withdrawal from the EU the government has amended the TICE regulations so that:
- no new requests to set up an EWC or Information and Consultation procedure can be made by people employed in the UK
- provisions relevant to the ongoing operation of existing EWCs will remain in force
- requests for information or to establish EWCs or Information and Consultation procedures made but not completed before 1 January 2021 will be allowed to complete
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European Works Councils
Information and consultation in multinational companies through European Works Councils.
If your business is part of a multinational organisation that operates in at least two countries in the European Economic Area (EEA), you may be subject to the legislation on transnational information and consultation (I&C).
This gives employees in multinational undertakings with at least 1,000 employees the right to be represented on a European Works Council (EWC).
The EEA is made up of the 27 European Union member states plus Norway, Iceland and Liechtenstein.
People employed in the UK are no longer able to ask their employer to set up an EWC following the UK's exit from the EU. However, if a request to set up an EWC was submitted before 1 January 2021, it will be allowed to complete.
The current representative still may be able to be involved with your business's EWC following the UK's exit from the EU if your business agrees. The government will make sure the enforcement framework, rights, and protections for employees in UK EWCs are still available as far as possible. It is up to your company to decide if they want to include representatives from the UK. If they do, they will still be entitled to paid time off to carry out their role. See participating in a European Works Council.
An EWC is an I&C forum that is designed to allow employees in different EEA nations to be informed and consulted about transnational issues that affect their employer.
Some large multinational organisations have set up EWCs following a request from their employees. However, businesses can start the process of negotiating an EWC agreement themselves.
The transnational I&C legislation applies differently to EWCs:
- established before 15 December 1999
- established on or after 15 December 1999 and where the agreement was signed or revised in the two years before 5 June 2011
- established between 16 December 1999 and 5 June 2011 that have not been revised in the two years before 5 June 2011
- that are yet to be established or were established on or after 5 June 2011
Transnational I&C requirements
If your business has 1,000 or more employees, and has at least 150 employees in each of two or more EEA states, your employees can request that an EWC be set up. For a request to be valid, it must be:
- made by either at least 100 employees in at least two undertakings in two or more EEA countries, or representatives representing that many employees
- in writing and dated
- sent to your business' central or local management
Agency workers do not count towards the number of people in the business in which they are placed. However, they do count towards the number of people employed by the employment agency business providing them.
Once you have received a valid request, you must make the necessary arrangements for your employees to elect or appoint representatives of a special negotiating body (SNB).
You'll have six months to set up the SNB and start negotiations. Otherwise, fall-back provisions will apply.
The SNB should be made up of employees' representatives from each EEA country where your business has employees. Its role is to negotiate with your central management over the composition and terms of the EWC.
EWC agreements
Once an SNB has been set up, the parties have up to three years to negotiate an EWC agreement in order to determine - among other things - exactly how the EWC will be set up, what it will discuss, how often it will meet and what it should be provided with to help it function.
A negotiated EWC agreement must set out:
- what parts of the undertaking will be covered by the agreement
- the composition of the EWC and how long its members will serve
- the functions of the EWC
- the way I&C will take place
- how central management will disclose information
- the venue, frequency and duration of EWC meetings
- how the consultation dialogue with the EWC should link to I&C at the national level
- the financial and material resources that will be available to the EWC
- how long the EWC will last
- how the EWC agreement will be renegotiated
- if a select committee should be set up and, if so, how it will operate
An EWC agreement will need to meet the requirements of the fall-back provisions if:
- the parties decide not to negotiate
- an agreement cannot be reached
- the management and the SNB decide it is so
The fall-back provisions are much more prescriptive about what the employer must consult over and when.
While your central management should try to be as open as possible with your EWC, you can withhold certain information if its disclosure would seriously harm the functioning of the business.
Enforcement of the EWC legislation
The enforcement provisions of the EWC legislation are shared between the Industrial Court and the High Court.
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Informing and consulting employees - best practice
Communicate individually, face-to-face, in writing and by consultation according to the subject and the audience.
Depending on your business' size, nature and structure, the type of information you are sharing, and the input you hope to get, there are a variety of ways to communicate and consult with employees and/or their representatives.
Where you have an information and consultation or European Works Council agreement, a pre-existing agreement, or where you are legally required to inform and consult with employees on other matters (such as health and safety regulations or when considering redundancies), any consulting and informing you carry out must comply with the terms of that agreement or other legal requirements.
Effective communication methods
To communicate individually, you could use:
- one-to-one meetings - for issues specific to the individual
- telephone calls - for home workers and other offsite employees
- email - employees can respond at their convenience
A record should be appropriately kept of such communications. You must comply with the UK General Data Protection Regulation (UK GDPR).
Failure to consult your staff is a regular employment tribunal complaint by employees.
Face-to-face communication methods
Face-to-face methods of communication include:
- group or team briefings - discussion and feedback on issues directly related to the group
- quality circles - groups that meet regularly to solve problems and improve quality
- large-scale meetings - to present the business' performance and long-term objectives to employees or exchange of views
- cascade networks - briefing small groups of people who tell others the same information, to get information across quickly without having to call a meeting
- inter-departmental briefings - to promote a unified approach within larger businesses
Written methods of communication
Written methods include:
- company handbooks - combines company and job-related information
- company newsletters - present information about the business and its people, in print or through email
- employee information notes - reports the business' activities and performance
- departmental bulletins - informs on a sectional, departmental, or wider basis
- notice boards - encourages communication between employees
- intranets - stores company information in a structured way for employee access
- email - communicates with employees in different or isolated locations
Consultation methods
Consultation methods include:
- joint consultative councils/works councils - regular meetings of managers and employee representatives
- joint working parties - resolves specific issues and includes managers and employees
- trade unions - aim to improve terms and conditions for their members
- informal emails - promote a feedback forum for employees to consider and put forward ideas at times convenient to them
- annual staff survey or questionnaire - allows for giving frank views if employees can reply anonymously
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How to achieve good communication between employer and employees
How to encourage a two-way flow of information between employees and managers.
Be clear about what you are trying to achieve and explain to employees, their representatives, or both, whether you are informing, consulting, or negotiating with them.
A two-way flow of information
You should encourage a two-way flow of information between employees and managers. Consider:
- holding regular meetings
- using language your employees understand - not jargon
- keeping discussions focused, relevant, local and timely
- using open-ended questions to draw out ideas from employees
- ensuring your communications reach every employee, ie don't forget part-time workers, home workers, and absent workers (for example, those on statutory leave and those absent due to sickness)
- using social events to break down barriers and build up trust
Communicating sensitive information
When you need to communicate controversial or sensitive issues, eg poor company results, you should do this face-to-face. It's usually better to have a senior manager discussing such important matters. The advantage of spoken, face-to-face communication is that it's a direct and effective way to get across facts. It can't be relied upon completely because misunderstandings and rumours can arise - you may wish to reinforce it with written confirmation, see managing conflict.
You may also want written information available for employees to refer to.
Make sure that whoever talks to the employees is fully briefed, and provide an opportunity for employees to ask questions:
- If you are asked a question you don't know the answer to, say so. You could advise that you would have needed notice of that question as you don't currently have the information to hand for an immediate response. Explain that you will get back to them with an answer in due course. For all employees to be informed you could email all staff once you have an answer to a query that affects them all.
- If there is no answer, explain the reasons for this.
- If you can get an answer by a given deadline, tell them this.
Effective written communication is typically accurate, brief, and clear. It's good practice to have copies of all business policies and information in one place which employees have access to, eg an intranet. Employees can look up procedures, duties, and contract terms at their convenience or when they need clarification.
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Examples of good information and consultation in practice
How to create procedures to communicate and consult with your staff.
A communications policy is an effective way of defining who is responsible for information and consultation (I&C), the channels along which information passes, and the way it is communicated.
If your business is not affected by the legal requirements you should still consult with your employees to establish an I&C agreement.
Establishing an I&C policy
A good I&C policy clearly describes who is responsible for communication at each level and the methods used for communication. It also outlines the arrangements for consultation and for training employees and managers.
Consider involving trade union representatives or other employee representatives when you draw up the policy and throughout the communications and consultation process. You should involve senior managers and get them to take the lead. Make provisions to include your workers in different sites, isolated areas, or those working from home.
Make sure that your communications and consultations are systematic and regular. You should frequently review the policy and be willing to modify it. Tailor your consultative arrangements to your business.
Small companies typically have informal arrangements, but you may need a more formal arrangement so that everyone clearly understands their roles and responsibilities. This is important where consultation is a legal obligation.
Be genuine about your commitment to communication and consider employees' views before making a decision.
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Advantages of communications and consultation training in successful business
Communications and consultation training for managers, employees and trade union representatives.
Training managers and employees in communications skills and techniques can improve communications and consultation practice within your business.
Employees can benefit from understanding the information they are given and it can encourage them to take a more active role in the communications and consultation process. Training can help trade union representatives take a fuller part in communications and consultation.
Benefits of training
Courses can help encourage employee involvement in your business. They can also help you communicate information to employees on a range of issues that relate to their employment. Communication training for managers and employees can help break down any barriers between them.
Training can help managers to:
- understand the importance of good communication and of having a consultation policy
- understand their roles
- encourage those employees who have problems communicating
- understand and meet their legal obligations for informing and consulting
For more information, see skills and training for directors and owners.
Areas of skills development
Useful courses for your employees and managers may cover:
- joint working methods
- effective meetings
- presentation skills
- listening skills
- effective business writing
- interviewing techniques
As with any training, it is a good idea to periodically evaluate the effectiveness of the training course.
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Holiday pay on termination of employment
In this guide:
- Know how much holiday to give your staff
- Advantages of managing staff holiday entitlement
- Holiday entitlement and statutory holiday pay
- Calculate holiday entitlement and holiday pay
- Calculating holiday entitlement for atypical workers
- Holiday entitlement for employees on statutory family-related leave
- Pay and time off on public and bank holidays
- Taking holiday - notice periods, restrictions and sickness
- Holiday pay on termination of employment
- Managing staff holiday entitlement: five top tips
Advantages of managing staff holiday entitlement
Details the advantages of managing holiday entitlement for workers in your business.
It is beneficial to both your business and your staff if you manage holiday entitlement correctly.
Disagreements over holidays and holiday pay are common if entitlements are not clearly agreed upon and set out in writing. These disagreements could lead to a deterioration in your relationship with your staff and possible complaints to industrial tribunals.
In addition, almost all workers above school leaving age are entitled to statutory paid holiday entitlement, so you should be aware of what this means for your business and manage how it is worked out for each worker.
Advantages of managing staff holiday entitlement
Effectively managing staff holiday entitlement can bring several business benefits:
- Staff who are able to take regular holidays can feel more valued and become more motivated about their work which helps them to perform more effectively.
- Having a break from the workplace ensures staff are less prone to accidents and less likely to suffer from stress because they have regular opportunities to rest.
- Having an annual leave policy and including paid holiday entitlement in employees' employment contracts ensures the rules and processes are clear to everyone. This will help you to take a consistent approach to annual leave across the business so that employees feel they have been treated fairly.
- Having a policy and appropriate procedures in place also minimises the opportunity for disputes. A worker is more likely to be granted an annual leave request if the appropriate procedure has been followed and they have given you sufficient notice of the leave so you can prepare for the absence.
- You should also experience a decrease in sick leave and staff turnover because staff feel more appreciated overall and are less likely to resort to sick leave when they need to take time off work.
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Holiday entitlement and statutory holiday pay
Minimum statutory annual leave entitlement, unused holidays, and how to set these arrangements out in writing.
Almost all workers above school leaving age - not just employees but also, for example, agency and casual workers - are entitled to 5.6 weeks of paid holiday per leave year (28 days for a worker working a five or six-day week).
The 5.6 weeks is a minimum holiday entitlement - you can choose to offer more.
You can count any days off for public or bank holidays towards a worker's statutory holiday entitlement - but only as long as you pay them for those days off. See bank and public holiday dates.
Workers below school leaving age must have a two-week break during school holidays. Read more on employing children and young people.
When leave years may start
You may decide to have one date when your business' leave year starts or have different start dates for individual workers (or groups of workers).
If you do not have written leave arrangements, a leave year will start on the date a worker's employment begins and on each subsequent anniversary of that date.
Holiday entitlement: staff working a six-day week
The statutory paid holiday entitlement is capped at 28 days.
Although 5.6 weeks would equal 33.6 days for someone working a six-day week (5.6 x 6), because of the cap, staff working a six-day week are only entitled to 28 days' paid holiday. However, that is the minimum statutory allowance. If you wish you can increase the holiday entitlement under an employee's contract of employment.
Holiday entitlement and the contract of employment
You must set out an employee's paid holiday entitlement in their written statement of terms and conditions of employment.
This should enable them to work out their entitlement and pay for any untaken holiday if they leave. See the employment contract.
Workers not entitled to the statutory minimum paid holiday entitlement
The following types of workers do not have the right to benefit from the minimum paid holiday entitlement:
- The genuinely self-employed, who can take as little or as much holiday as they choose.
- Those whose jobs may conflict with the requirement to take annual leave requirements, eg the armed forces, the police, and those involved in civil protection (these workers have to rely on their contracts of employment for their rights to holiday).
- Workers in some sectors are excluded from the Working Time Regulations (Northern Ireland) 2016 because they are covered by separate regulations. The entitlement to annual leave of mobile staff working in the civil aviation sector, for example, is governed by the Civil Aviation (Working Time) Regulations 2004.
Carrying over unused paid holiday
A worker may wish to carry over unused holidays from the current leave year to the next.
Under European Union (EU) derived law, a worker must take at least 4 weeks holiday per leave year. If they take less than this, they cannot carry it over.
However, in the UK, the statutory entitlement is 5.6 weeks. What a worker may do with the additional 1.6 weeks depends on their employer's arrangements. You can either:
- have an arrangement that workers must take their full statutory entitlement of 5.6 weeks in any leave year
- allow workers to carry over any of the additional 1.6 weeks that remain untaken into the next leave year - although they must take it by the end of the next leave year
If an employee has an additional contractual entitlement over and above the 5.6 weeks, it again depends on their contract of employment whether or not they can either carry it over or will receive pay in lieu for any of the entitlement that remains untaken.
If you do allow workers to carry over any contractual annual leave entitlement, you can have your own rules on when they must take it. For example, you could state that workers must take the carried-over leave within three months of the start of the next leave year.
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Calculate holiday entitlement and holiday pay
Guidance for employers on how to calculate holiday entitlement, calculate holiday pay, and what to do with untaken leave.
A worker's entitlement to paid annual leave starts on the first day of employment and is not subject to a minimum period of employment.
Holiday entitlement accrual
The Regulations permit an employer to operate a holiday accrual system for workers who are in their first year of employment (only). In practice, this means that a new worker will accrue one-twelfth of their annual holiday entitlement each month they are employed. This will apply from the start of each month.
Calculating holiday pay
For each week of leave accrued, workers are entitled to one week's normal pay. A week's pay is calculated according to the type of work carried out:
- for workers on fixed hours and pay, it equals the amount due for a week's work, averaged over the preceding 12 weeks
- for workers on fixed hours and variable pay (bonus, commission, or piece workers), it equals the average hourly rate (over the preceding 12 weeks) multiplied by the normal working hours in a week
- for shift workers, it equals the average weekly hours of work in the preceding 12 weeks at the average hourly rate
- for workers with no normal working hours, a week's pay is the average pay received over the preceding 12 weeks.
The 12-week reference period should be made up of 12 weeks in which pay was due to the worker. Any week in which no remuneration was payable to the worker should be discounted, as should any weeks where the employee was for any amount of time on sick leave, maternity leave, adoption leave, shared parental leave, parental leave, or paternity leave.
If any weeks are discounted, ie no pay was received for a particular week, or the worker was on statutory leave as outlined above, earlier weeks should be considered until you get as close to 12 weeks as possible. In these circumstances, the maximum period you go back is 24 weeks.
If the worker has been employed for less than 12 weeks, holiday pay is based on the number of complete weeks for which the worker has been employed.
Calculate holiday pay for hourly paid staff
To calculate the average hourly rate, you only count the hours where the worker was working and the pay that related to those hours.
Staff should receive the same pay during any holiday period as they would if they were at work. Therefore, when calculating holiday pay for the 4 weeks of paid holiday leave derived from European law, an employer must include payments which are intrinsically linked to the performance of tasks the employee is obliged to carry out under the terms of the contract. This includes commission, bonuses, regularly paid allowances, and payment for additional hours the employee normally and repeatedly works. Other payments, such as overtime payments regularly paid to the employee should also be included, as should payments for professional or personal status relating to length of service, seniority, or professional qualifications. Employers may decide to extend this calculation to the full 5.6 weeks statutory paid holiday entitlement, but they do not have to.
However, case law has suggested all paid annual leave should be treated as a composite whole where each day of a holiday a worker takes includes, on a fractional basis, the various elements making up their total holiday entitlement (whether they be contractual or statutory). Employers should take this into account when making holiday payments where they are only applying the law on overtime, commission, allowances, bonuses etc (as outlined above) to the 4 weeks of holiday derived from European law to ensure underpayments of holiday pay are avoided.
The question of how much pay a worker is due during a period of holiday can be complex and has been the subject of several court judgments. Further information is available from the LRA Workplace Information Service on Tel 03300 555 300.
Calculate holiday entitlement for your employees.
Payments for untaken statutory holiday
In the UK, the statutory annual leave entitlement is 5.6 weeks. A worker must take at least four weeks' paid holiday per leave year.
What a worker does with the remaining 1.6 weeks depends on their employment contract.
For example, you could allow them to carry those 1.6 weeks into the next leave year or state that all 5.6 weeks must be taken by the end of the leave year.
However, you cannot make a payment in lieu for any days that remain untaken. The only time you can make a payment in lieu of the statutory holiday entitlement is when the contract of employment terminates, and the worker has accrued entitlement to holidays and is unable to take them before they leave.
Payments for untaken contractual holiday
At the end of a leave year, you may find you have an employee who has some untaken contractual annual leave, ie annual leave over and above the statutory minimum of 5.6 weeks.
Depending on their employment contract, the employee may be entitled to either carry over the untaken days, or receive a payment in lieu of those untaken days.
When to pay workers their statutory holiday pay
Workers must receive their statutory holiday pay at the time that leave is taken.
It's, therefore, unlawful to not pay a worker while they are on holiday and pay them an allowance as part of their wages or salary instead - a system known as rolled-up holiday pay.
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Calculating holiday entitlement for atypical workers
How to work out statutory paid annual leave for part-time staff, shift workers, casual workers, and others.
There are various ways of working out the holiday entitlement for workers who don't have regular working arrangements or patterns.
Part-time workers
Paid holiday entitlement is calculated pro-rata for part-time workers.
For example, if a member of staff works three days a week, they are entitled to 16.8 days (5.6 x 3).
Shift workers
It is sometimes easier to calculate holiday entitlement as shifts.
For example, if a member of staff works four 12-hour shifts followed by four days off, the average working week is 3.5 12-hour shifts. So 5.6 weeks' holiday is 5.6 x 3.5 = 19.6 12-hour shifts.
For other shift patterns, it may be easiest to calculate according to the established repeating pattern.
More irregular working patterns: calculating holidays in hours
Annualised hours
If a member of staff works annualised hours, you need to calculate how many hours a week they work on average over the whole year.
For example, if a member of staff works a total of 1,600 hours a year, or 34.48 hours a week over 46.4 weeks of the year, the holiday entitlement is 5.6 weeks x 34.48 hours a week = 193.09 hours of holiday for the year.
Compressed hours
For someone working compressed hours, for example, a 36-hour week over four days instead of five, their annual holiday entitlement is 36 hours x 5.6 weeks = 201.6 hours of holiday for the year.
Rather than taking a day's holiday, they would take the number of hours that they would have otherwise worked on that day (ie for 36 hours worked over four days, they would take nine hours' holiday for each day otherwise worked).
Calculating no fixed hours contracts (casual work, including zero-hours contracts)
To calculate the average hourly rate, only the hours worked and how much was paid for them should be counted. Take the average rate over the last 12 weeks.
A 'week' usually runs from Sunday to Saturday. Only use another 7-day period (like Thursday to Wednesday) if that's how a worker's pay is calculated.
You can also get further information from the LRA Workplace Information Service on Tel 03300 555 300.
Part days
Calculations may result in part days, eg 22.4 days for someone working four days a week. In some cases, it may be easier to work the holidays out in hours.
If this is the case, you could:
- Allow the worker to leave early or arrive late one day. For example, for someone working an eight-hour day taking 0.4 of a day's holiday, you could allow them to leave after working for four hours and 48 minutes (480 minutes x 0.6 of a working day = 288 minutes) or allow them to arrive three hours and 12 minutes late (0.4 of a working day).
- Round the entitlement up to the nearest full day - or half day if this is still easy for you to administer. You cannot round entitlements down.
- Allow the worker to carry the part day over into the next leave year (and then perhaps round up to the nearest full day).
- Pay them for a part day. However, you can only do this if the worker's paid holiday entitlement is more than 5.6 weeks as you cannot pay a worker in lieu of an untaken statutory holiday - see calculating and paying holiday pay.
Term time or part-year workers
Recent case law has determined workers employed on a continuous contract throughout the year, and who work for varying hours during certain weeks of the year, such as those who work only term time, are entitled to 5.6 weeks of leave each year. This entitlement applies even though there are some weeks in the year when they do not work.
In such instances, holiday pay is calculated by averaging the pay received during the 12 weeks before the commencement of their leave. If there are weeks during the 12-week period where no pay was received, these weeks are disregarded and the employer must count back to include a total of 12 weeks in which pay was received.
Although there may be times when a part-year worker receives a higher payment than a full-time worker - this is compliant with the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations (Northern Ireland) 2000, as the part-time worker is not being treated less favourably. There is no legislative provision to prevent part-time workers from being treated more favourably.
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Holiday entitlement for employees on statutory family-related leave
Holiday entitlement for staff on family-related leave.
Employees taking statutory maternity, adoption, paternity, parental leave, and parental bereavement leave will continue to accrue statutory paid holiday and, in many cases, any contractual holiday entitlement. If, by the end of the current holiday year, an employee has been prevented from taking part or all of their holiday leave entitlement due to being on one of these types of statutory leave, they have a right to carry over up to 5.6 weeks untaken statutory holiday leave into the new holiday year.
Holiday entitlement and maternity/adoption leave
Employees on maternity or adoption leave continue to accrue both statutory and any contractual paid holiday during both ordinary and additional maternity/adoption leave.
A statutory paid holiday cannot be taken at the same time as maternity/adoption leave. When you are planning for the maternity/adoption leave, you may wish to discuss taking any outstanding holiday and perhaps delay the start of their maternity/adoption leave.
Alternatively, it may be possible for them to take holiday at the end of the maternity/adoption leave period.
If a new holiday year starts, the employee is on maternity/adoption leave and holidays haven't been taken, the employee has a right to carry over up to 5.6 weeks untaken statutory holiday leave to the new holiday year.
When you are planning, you should both be aware that maternity and adoption leave cannot start later than the date of the child's birth or placement for adoption, so an early birth or placement could shorten the amount of annual leave the employee is able to take.
Read more on maternity leave and pay and adoption leave and pay.
Holiday entitlement and paternity leave
Employees continue to accrue their statutory and any contractual paid holiday entitlement while they are on statutory paternity leave.
Read more on paternity leave and pay.
Holiday entitlement and shared parental leave
Employees continue to accrue their statutory and any contractual paid holiday entitlement while they are on shared parental leave.
Read more on shared parental leave and pay.
Holiday entitlement and parental leave
Employees continue to accrue their statutory paid holiday entitlement while they are on parental leave. They will also continue to accrue contractual holiday entitlement if this is provided for in their contract of employment.
See parental leave and time off for dependants.
Holiday entitlement and parental bereavement leave
Employees continue to accrue their statutory paid holiday entitlement while they are on parental bereavement leave. They will also continue to accrue contractual holiday entitlement if this is provided for in their contract of employment.
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Pay and time off on public and bank holidays
Including bank and public holidays as part of your workers' statutory paid holiday entitlement.
You do not have to give staff paid time off for bank and public holidays. However, you should set out in a worker's contract:
- any right to time off on bank and public holidays
- whether or not that time off is paid
- what you will pay them if they work one of these days, ie whether you will pay the normal rate of pay or an enhanced rate, eg time-and-a-half or double time
Note that if you allow a worker time off for bank and public holidays over a significant period of time, it may become an implied term of their contract via custom and practice, ie the term is not actually written in the contract document but is still part of the contract.
Part-time staff
Part-time staff have the same entitlement to leave as full-time workers. Therefore, if full-time staff are given paid leave for bank and public holidays, part-time workers should also receive this benefit on a pro-rata basis.
This can be a problem if most of the bank and public holidays fall on days when a part-time worker doesn't normally work.
A best practice example is as follows:
An employer has both part-time and full-time staff. In a particular year, there are ten bank/public holidays. The full-time staff work a five-day week, Monday to Friday. There are also part-time staff working a two-day week, some on Monday and Tuesday, some on Wednesday and Thursday, and some working varying days.
The employer allows all workers the day off in respect of all bank/public holidays falling on a day they would ordinarily have worked. Furthermore, for those part-time staff working Wednesday and Thursday (or varying days) who would never (or rarely) work on the day a bank/public holiday falls, the employer allows them a pro-rata entitlement of days off in lieu based on the number of days they work, by way of best practice. They, therefore, receive two-fifths of the ten-day entitlement.
This approach ensures that all workers enjoy a share of the benefits received by full-time staff.
Read more on employing part-time workers.
Bank and public holiday dates
When the Christmas and New Year public holidays fall at a weekend, other weekdays are declared public holidays. These are usually the following Monday and, if necessary, the Tuesday.
If a worker normally works weekends, and Christmas Day, Boxing Day or New Year's Day fall on a weekend, entitlement to time off depends on their employment contract. This may be something that is explicitly agreed upon in the terms of the contract or could have been incorporated through custom and practice.
However, entitlement will not depend on the contract if you are operating on the statutory entitlement of 5.6 weeks.
See bank and public holidays in Northern Ireland.
Special bank holidays
Dates of bank holidays can be changed or extra holidays declared to celebrate special occasions. For example, there was an extra bank holiday on Monday 8 May 2023 to mark the coronation of His Majesty King Charles III.
A worker's minimum paid annual leave entitlement is 5.6 weeks. There is no statutory time off for bank holidays and public holidays. However, you may choose to include these as part of that worker's entitlement.
Where a worker's contract states they are entitled to the statutory minimum annual leave, an extra bank holiday would not increase their paid holiday entitlement.
However, if a worker had a contract that entitles them to 20 days' annual leave plus all bank and public holidays, they should be entitled to the additional bank holiday as annual leave.
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Taking holiday - notice periods, restrictions and sickness
Holiday request procedures, notice periods what to do when workers are sick.
Workers must give you notice that they wish to take leave. You can agree the notice period with your workers and should set this out in writing.
If there is no agreement in place, they must give notice of at least twice the length of the intended leave period. You must reply within the same length of time as the intended leave.
For example, if the worker gives two days' notice for one day's leave, you must reply within one day. Even if the worker gives sufficient notice, you may still refuse the request - but be as reasonable as you can. You should retain a record of the refusal reason, and act consistently with respect to any refusals, within reason.
Restricting when holiday may be taken
You may restrict the taking of leave. Restrictions could:
- be stated in the employment contract
- have built up via custom and practice
- be negotiated with trade unions or employee representatives
Examples include:
- specifying periods when leave may or may not be taken
- capping the amount of leave that can be taken at any one time
- shutting down for certain periods, eg between Christmas and New Year or for two weeks in August
If you don't have an agreement for taking leave and you want workers to take all or part of their holiday entitlement on certain dates, you must give notice of at least twice as long as the leave period.
Resolve clashes between requests for leave by considering the needs of the business, eg peak season or a quieter period, the individual circumstances, or by setting out clear rules for booking leave. It may be helpful to formalise cover for key staff on annual leave.
If you set restrictions on when holidays can be taken, bear in mind the need to avoid indirect discrimination - read more on how to prevent discrimination and value diversity.
You should also note that it's unlawful to prevent a worker from taking their statutory paid holiday entitlement. Therefore, you may have to allow a worker's annual leave request right at the end of the leave year to ensure that they have taken their full entitlement of 5.6 weeks or 4 weeks where you have agreed carry over.
Workers will also be able to carry over up to 4 weeks of holiday leave where:
- the employer fails to recognise a worker's right to paid holiday leave
- the employer fails to give the worker reasonable opportunity to take holiday leave or to encourage them to do so
- the employer fails to inform the worker that any holiday leave not taken by the end of the holiday leave year, which can be carried over, will be lost
Accruing annual leave during sick leave
A worker continues to accrue their statutory minimum holiday entitlement as normal while absent from work due to sickness. This is regardless of how long the period of sickness lasts.
Depending on the terms of their employment contract, they may also accrue any additional contractual annual leave that they would normally be entitled to.
Taking annual leave during sick leave
A worker is entitled to take statutory annual leave while on sick leave.
If the worker chooses to take annual leave while they are on sick leave but they are not receiving any sick pay, you pay them their normal holiday pay.
A worker is most likely to choose to take annual leave while on sick leave if they are:
- not entitled to sick pay of any kind
- on sick leave for a long period and, as a result, you have stopped paying them sick pay
- due to return to work shortly before the end of the leave year and, as a result, would be unable to take their full holiday entitlement following their return to work
Changing annual leave to sick leave
A worker can choose to change a period of annual leave during which they are sick to sick leave. This would occur if they either:
- become sick while on annual leave
- have a period of sick leave that continues into a pre-arranged period of annual leave
Once the worker returns to work, they can then make arrangements to take the annual leave they missed at a later date.
Where a worker is on sick leave instead of annual leave, you should consider asking them for evidence of their sickness in line with your usual sickness absence procedures and in line with any eligibility criteria for statutory sick pay.
For example, to qualify for full pay while sick, you could:
- require a worker to inform you as soon as reasonably possible that they are sick
- request that they provide you with medical evidence of that sickness
For more information about sick pay, see understanding statutory sick pay.
Carrying over annual leave that is left untaken due to sickness
If a worker is unable to take all their statutory annual leave entitlement within a leave year because of illness, they will be entitled to carry forward up to 4 weeks of the unused statutory entitlement to the next leave year. Holiday leave carried over in this way must be taken by the end of the period of 18 months from the end of the holiday leave year in which the entitlement originally arose.
If you need further advice on sick leave and/or annual leave, you should contact the Labour Relations Agency Workplace Information Service on Tel 03300 555 300.
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Holiday pay on termination of employment
Calculating holiday pay when workers leave your employment.
When your workers leave a job - even if you have dismissed them without notice for gross misconduct - they must receive pay for any statutory leave they are entitled to in the current leave year but have not taken.
This entitlement is not subject to a minimum period of employment.
Formula to calculate pay due to workers who resign
You can work out the pay due using the simple formula (A x B) - C, where:
- A is the total holiday entitlement for the year
- B is the fraction of the year to the date of leaving
- C is the amount of holidays already taken
Example: Part-time worker
For example, a part-time worker works three days per week. Like all workers, they are entitled to 5.6 weeks of paid annual leave.
They leave a job seven months into the leave year having taken eight days off. This is the equivalent of 2.66 weeks (8 ÷ 3).
Applying the formula above: 5.6 x (7 ÷ 12) - 2.66 = 0.61 weeks' leave to be paid in lieu.
Note that, if you need to, you should round this figure up to prevent underpayment.
If you pay a worker on a daily basis, you can also work out their outstanding holiday entitlement in days.
Example: Full-time worker
For example, a worker working five days per week is entitled to 5.6 weeks per year, the equivalent of 28 days (5.6 x 5).
They leave a job three months into the year having taken four days off.
Applying the formula above: 28 x (3 ÷ 12) - 4 = 3 days' leave to be paid in lieu.
Note that, if you need to, you should round this figure up to prevent underpayment.
You need to get the worker's signed agreement to make a deduction from the final payment to them for any leave taken over their entitlement.
Calculate pay when workers fail to give the correct period of notice
Holiday pay would usually sit separately from notice entitlement and would be earned up to the date the worker leaves your employment.
However, if a worker leaves employment without giving the correct period of notice, they could be in breach of their employment contract if the contract contains a clause stating what will happen if this occurs eg deductions will be made from earned pay.
Calculating leave pay due to workers who you dismiss
If you dismiss a worker, they have the right to be paid for leave accrued during their period of employment, no matter how short it was.
To work out B when using the formula above, you need to know the worker's termination date.
If you dismiss a worker with notice, the termination date is the date the notice period expires.
If you dismiss a worker without notice, the termination date is the date you summarily dismissed the worker.
An employee's written statement of employment particulars should contain information to enable them to calculate their entitlement to accrued holiday pay when they leave.
Taking annual leave during the notice period
A worker may wish to take some or all of their outstanding annual leave as part of their notice period. This should be treated the same as for any other holiday request - taking into account your usual procedure for authorising annual leave. Read more on taking holiday - notice periods, restrictions and sickness.
You can also insist by giving appropriate notice or because it is clearly expressed in the contract of employment, that a worker takes any holiday owed to them as part of their notice period.
If a worker takes part of their paid leave entitlement during their notice period, you may reduce their notice pay by the amount of holiday pay, provided it is in respect of the same leave year.
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Managing staff holiday entitlement: five top tips
Follow these tips to help you successfully manage each worker’s holiday entitlement.
The majority of your workers are legally entitled to paid holidays. The following top tips will help you to successfully manage each worker's holiday entitlement.
Top tips for employers to manage staff holiday entitlement
1. Calculate holiday entitlement
A worker's statutory paid holiday entitlement starts on the first day of employment and is 5.6 weeks per year (28 days for a worker working a five or six-day week) - see holiday entitlement and statutory holiday pay.
2. Consider irregular hours
Ensure that you work out holiday entitlement for any staff who don't have regular working arrangements. These can include part-time workers, shift workers, and casual workers - see calculating holiday entitlement for atypical workers.
3. Include in employment contracts
Set out your employee's paid holiday entitlement in their employment contract to avoid any disagreements - see the employment contract.
4. Consider bank and public holidays
You do not have to give staff paid time off for bank or public holidays, but ensure that you include this in your employees' contracts. If you allow a worker time off for bank and public holidays over a significant period of time, be aware that it may become an implied term of their contract, even if it is not written in the contract of employment - see pay and time off on public and bank holidays.
5. Agree notice periods
Workers must give you notice if they wish to take leave. You can agree the notice period with them and you should set this out clearly in writing - see taking holiday - notice periods, restrictions, and sickness.
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Holiday entitlement and statutory holiday pay
In this guide:
- Know how much holiday to give your staff
- Advantages of managing staff holiday entitlement
- Holiday entitlement and statutory holiday pay
- Calculate holiday entitlement and holiday pay
- Calculating holiday entitlement for atypical workers
- Holiday entitlement for employees on statutory family-related leave
- Pay and time off on public and bank holidays
- Taking holiday - notice periods, restrictions and sickness
- Holiday pay on termination of employment
- Managing staff holiday entitlement: five top tips
Advantages of managing staff holiday entitlement
Details the advantages of managing holiday entitlement for workers in your business.
It is beneficial to both your business and your staff if you manage holiday entitlement correctly.
Disagreements over holidays and holiday pay are common if entitlements are not clearly agreed upon and set out in writing. These disagreements could lead to a deterioration in your relationship with your staff and possible complaints to industrial tribunals.
In addition, almost all workers above school leaving age are entitled to statutory paid holiday entitlement, so you should be aware of what this means for your business and manage how it is worked out for each worker.
Advantages of managing staff holiday entitlement
Effectively managing staff holiday entitlement can bring several business benefits:
- Staff who are able to take regular holidays can feel more valued and become more motivated about their work which helps them to perform more effectively.
- Having a break from the workplace ensures staff are less prone to accidents and less likely to suffer from stress because they have regular opportunities to rest.
- Having an annual leave policy and including paid holiday entitlement in employees' employment contracts ensures the rules and processes are clear to everyone. This will help you to take a consistent approach to annual leave across the business so that employees feel they have been treated fairly.
- Having a policy and appropriate procedures in place also minimises the opportunity for disputes. A worker is more likely to be granted an annual leave request if the appropriate procedure has been followed and they have given you sufficient notice of the leave so you can prepare for the absence.
- You should also experience a decrease in sick leave and staff turnover because staff feel more appreciated overall and are less likely to resort to sick leave when they need to take time off work.
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Holiday entitlement and statutory holiday pay
Minimum statutory annual leave entitlement, unused holidays, and how to set these arrangements out in writing.
Almost all workers above school leaving age - not just employees but also, for example, agency and casual workers - are entitled to 5.6 weeks of paid holiday per leave year (28 days for a worker working a five or six-day week).
The 5.6 weeks is a minimum holiday entitlement - you can choose to offer more.
You can count any days off for public or bank holidays towards a worker's statutory holiday entitlement - but only as long as you pay them for those days off. See bank and public holiday dates.
Workers below school leaving age must have a two-week break during school holidays. Read more on employing children and young people.
When leave years may start
You may decide to have one date when your business' leave year starts or have different start dates for individual workers (or groups of workers).
If you do not have written leave arrangements, a leave year will start on the date a worker's employment begins and on each subsequent anniversary of that date.
Holiday entitlement: staff working a six-day week
The statutory paid holiday entitlement is capped at 28 days.
Although 5.6 weeks would equal 33.6 days for someone working a six-day week (5.6 x 6), because of the cap, staff working a six-day week are only entitled to 28 days' paid holiday. However, that is the minimum statutory allowance. If you wish you can increase the holiday entitlement under an employee's contract of employment.
Holiday entitlement and the contract of employment
You must set out an employee's paid holiday entitlement in their written statement of terms and conditions of employment.
This should enable them to work out their entitlement and pay for any untaken holiday if they leave. See the employment contract.
Workers not entitled to the statutory minimum paid holiday entitlement
The following types of workers do not have the right to benefit from the minimum paid holiday entitlement:
- The genuinely self-employed, who can take as little or as much holiday as they choose.
- Those whose jobs may conflict with the requirement to take annual leave requirements, eg the armed forces, the police, and those involved in civil protection (these workers have to rely on their contracts of employment for their rights to holiday).
- Workers in some sectors are excluded from the Working Time Regulations (Northern Ireland) 2016 because they are covered by separate regulations. The entitlement to annual leave of mobile staff working in the civil aviation sector, for example, is governed by the Civil Aviation (Working Time) Regulations 2004.
Carrying over unused paid holiday
A worker may wish to carry over unused holidays from the current leave year to the next.
Under European Union (EU) derived law, a worker must take at least 4 weeks holiday per leave year. If they take less than this, they cannot carry it over.
However, in the UK, the statutory entitlement is 5.6 weeks. What a worker may do with the additional 1.6 weeks depends on their employer's arrangements. You can either:
- have an arrangement that workers must take their full statutory entitlement of 5.6 weeks in any leave year
- allow workers to carry over any of the additional 1.6 weeks that remain untaken into the next leave year - although they must take it by the end of the next leave year
If an employee has an additional contractual entitlement over and above the 5.6 weeks, it again depends on their contract of employment whether or not they can either carry it over or will receive pay in lieu for any of the entitlement that remains untaken.
If you do allow workers to carry over any contractual annual leave entitlement, you can have your own rules on when they must take it. For example, you could state that workers must take the carried-over leave within three months of the start of the next leave year.
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Calculate holiday entitlement and holiday pay
Guidance for employers on how to calculate holiday entitlement, calculate holiday pay, and what to do with untaken leave.
A worker's entitlement to paid annual leave starts on the first day of employment and is not subject to a minimum period of employment.
Holiday entitlement accrual
The Regulations permit an employer to operate a holiday accrual system for workers who are in their first year of employment (only). In practice, this means that a new worker will accrue one-twelfth of their annual holiday entitlement each month they are employed. This will apply from the start of each month.
Calculating holiday pay
For each week of leave accrued, workers are entitled to one week's normal pay. A week's pay is calculated according to the type of work carried out:
- for workers on fixed hours and pay, it equals the amount due for a week's work, averaged over the preceding 12 weeks
- for workers on fixed hours and variable pay (bonus, commission, or piece workers), it equals the average hourly rate (over the preceding 12 weeks) multiplied by the normal working hours in a week
- for shift workers, it equals the average weekly hours of work in the preceding 12 weeks at the average hourly rate
- for workers with no normal working hours, a week's pay is the average pay received over the preceding 12 weeks.
The 12-week reference period should be made up of 12 weeks in which pay was due to the worker. Any week in which no remuneration was payable to the worker should be discounted, as should any weeks where the employee was for any amount of time on sick leave, maternity leave, adoption leave, shared parental leave, parental leave, or paternity leave.
If any weeks are discounted, ie no pay was received for a particular week, or the worker was on statutory leave as outlined above, earlier weeks should be considered until you get as close to 12 weeks as possible. In these circumstances, the maximum period you go back is 24 weeks.
If the worker has been employed for less than 12 weeks, holiday pay is based on the number of complete weeks for which the worker has been employed.
Calculate holiday pay for hourly paid staff
To calculate the average hourly rate, you only count the hours where the worker was working and the pay that related to those hours.
Staff should receive the same pay during any holiday period as they would if they were at work. Therefore, when calculating holiday pay for the 4 weeks of paid holiday leave derived from European law, an employer must include payments which are intrinsically linked to the performance of tasks the employee is obliged to carry out under the terms of the contract. This includes commission, bonuses, regularly paid allowances, and payment for additional hours the employee normally and repeatedly works. Other payments, such as overtime payments regularly paid to the employee should also be included, as should payments for professional or personal status relating to length of service, seniority, or professional qualifications. Employers may decide to extend this calculation to the full 5.6 weeks statutory paid holiday entitlement, but they do not have to.
However, case law has suggested all paid annual leave should be treated as a composite whole where each day of a holiday a worker takes includes, on a fractional basis, the various elements making up their total holiday entitlement (whether they be contractual or statutory). Employers should take this into account when making holiday payments where they are only applying the law on overtime, commission, allowances, bonuses etc (as outlined above) to the 4 weeks of holiday derived from European law to ensure underpayments of holiday pay are avoided.
The question of how much pay a worker is due during a period of holiday can be complex and has been the subject of several court judgments. Further information is available from the LRA Workplace Information Service on Tel 03300 555 300.
Calculate holiday entitlement for your employees.
Payments for untaken statutory holiday
In the UK, the statutory annual leave entitlement is 5.6 weeks. A worker must take at least four weeks' paid holiday per leave year.
What a worker does with the remaining 1.6 weeks depends on their employment contract.
For example, you could allow them to carry those 1.6 weeks into the next leave year or state that all 5.6 weeks must be taken by the end of the leave year.
However, you cannot make a payment in lieu for any days that remain untaken. The only time you can make a payment in lieu of the statutory holiday entitlement is when the contract of employment terminates, and the worker has accrued entitlement to holidays and is unable to take them before they leave.
Payments for untaken contractual holiday
At the end of a leave year, you may find you have an employee who has some untaken contractual annual leave, ie annual leave over and above the statutory minimum of 5.6 weeks.
Depending on their employment contract, the employee may be entitled to either carry over the untaken days, or receive a payment in lieu of those untaken days.
When to pay workers their statutory holiday pay
Workers must receive their statutory holiday pay at the time that leave is taken.
It's, therefore, unlawful to not pay a worker while they are on holiday and pay them an allowance as part of their wages or salary instead - a system known as rolled-up holiday pay.
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Calculating holiday entitlement for atypical workers
How to work out statutory paid annual leave for part-time staff, shift workers, casual workers, and others.
There are various ways of working out the holiday entitlement for workers who don't have regular working arrangements or patterns.
Part-time workers
Paid holiday entitlement is calculated pro-rata for part-time workers.
For example, if a member of staff works three days a week, they are entitled to 16.8 days (5.6 x 3).
Shift workers
It is sometimes easier to calculate holiday entitlement as shifts.
For example, if a member of staff works four 12-hour shifts followed by four days off, the average working week is 3.5 12-hour shifts. So 5.6 weeks' holiday is 5.6 x 3.5 = 19.6 12-hour shifts.
For other shift patterns, it may be easiest to calculate according to the established repeating pattern.
More irregular working patterns: calculating holidays in hours
Annualised hours
If a member of staff works annualised hours, you need to calculate how many hours a week they work on average over the whole year.
For example, if a member of staff works a total of 1,600 hours a year, or 34.48 hours a week over 46.4 weeks of the year, the holiday entitlement is 5.6 weeks x 34.48 hours a week = 193.09 hours of holiday for the year.
Compressed hours
For someone working compressed hours, for example, a 36-hour week over four days instead of five, their annual holiday entitlement is 36 hours x 5.6 weeks = 201.6 hours of holiday for the year.
Rather than taking a day's holiday, they would take the number of hours that they would have otherwise worked on that day (ie for 36 hours worked over four days, they would take nine hours' holiday for each day otherwise worked).
Calculating no fixed hours contracts (casual work, including zero-hours contracts)
To calculate the average hourly rate, only the hours worked and how much was paid for them should be counted. Take the average rate over the last 12 weeks.
A 'week' usually runs from Sunday to Saturday. Only use another 7-day period (like Thursday to Wednesday) if that's how a worker's pay is calculated.
You can also get further information from the LRA Workplace Information Service on Tel 03300 555 300.
Part days
Calculations may result in part days, eg 22.4 days for someone working four days a week. In some cases, it may be easier to work the holidays out in hours.
If this is the case, you could:
- Allow the worker to leave early or arrive late one day. For example, for someone working an eight-hour day taking 0.4 of a day's holiday, you could allow them to leave after working for four hours and 48 minutes (480 minutes x 0.6 of a working day = 288 minutes) or allow them to arrive three hours and 12 minutes late (0.4 of a working day).
- Round the entitlement up to the nearest full day - or half day if this is still easy for you to administer. You cannot round entitlements down.
- Allow the worker to carry the part day over into the next leave year (and then perhaps round up to the nearest full day).
- Pay them for a part day. However, you can only do this if the worker's paid holiday entitlement is more than 5.6 weeks as you cannot pay a worker in lieu of an untaken statutory holiday - see calculating and paying holiday pay.
Term time or part-year workers
Recent case law has determined workers employed on a continuous contract throughout the year, and who work for varying hours during certain weeks of the year, such as those who work only term time, are entitled to 5.6 weeks of leave each year. This entitlement applies even though there are some weeks in the year when they do not work.
In such instances, holiday pay is calculated by averaging the pay received during the 12 weeks before the commencement of their leave. If there are weeks during the 12-week period where no pay was received, these weeks are disregarded and the employer must count back to include a total of 12 weeks in which pay was received.
Although there may be times when a part-year worker receives a higher payment than a full-time worker - this is compliant with the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations (Northern Ireland) 2000, as the part-time worker is not being treated less favourably. There is no legislative provision to prevent part-time workers from being treated more favourably.
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Holiday entitlement for employees on statutory family-related leave
Holiday entitlement for staff on family-related leave.
Employees taking statutory maternity, adoption, paternity, parental leave, and parental bereavement leave will continue to accrue statutory paid holiday and, in many cases, any contractual holiday entitlement. If, by the end of the current holiday year, an employee has been prevented from taking part or all of their holiday leave entitlement due to being on one of these types of statutory leave, they have a right to carry over up to 5.6 weeks untaken statutory holiday leave into the new holiday year.
Holiday entitlement and maternity/adoption leave
Employees on maternity or adoption leave continue to accrue both statutory and any contractual paid holiday during both ordinary and additional maternity/adoption leave.
A statutory paid holiday cannot be taken at the same time as maternity/adoption leave. When you are planning for the maternity/adoption leave, you may wish to discuss taking any outstanding holiday and perhaps delay the start of their maternity/adoption leave.
Alternatively, it may be possible for them to take holiday at the end of the maternity/adoption leave period.
If a new holiday year starts, the employee is on maternity/adoption leave and holidays haven't been taken, the employee has a right to carry over up to 5.6 weeks untaken statutory holiday leave to the new holiday year.
When you are planning, you should both be aware that maternity and adoption leave cannot start later than the date of the child's birth or placement for adoption, so an early birth or placement could shorten the amount of annual leave the employee is able to take.
Read more on maternity leave and pay and adoption leave and pay.
Holiday entitlement and paternity leave
Employees continue to accrue their statutory and any contractual paid holiday entitlement while they are on statutory paternity leave.
Read more on paternity leave and pay.
Holiday entitlement and shared parental leave
Employees continue to accrue their statutory and any contractual paid holiday entitlement while they are on shared parental leave.
Read more on shared parental leave and pay.
Holiday entitlement and parental leave
Employees continue to accrue their statutory paid holiday entitlement while they are on parental leave. They will also continue to accrue contractual holiday entitlement if this is provided for in their contract of employment.
See parental leave and time off for dependants.
Holiday entitlement and parental bereavement leave
Employees continue to accrue their statutory paid holiday entitlement while they are on parental bereavement leave. They will also continue to accrue contractual holiday entitlement if this is provided for in their contract of employment.
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Pay and time off on public and bank holidays
Including bank and public holidays as part of your workers' statutory paid holiday entitlement.
You do not have to give staff paid time off for bank and public holidays. However, you should set out in a worker's contract:
- any right to time off on bank and public holidays
- whether or not that time off is paid
- what you will pay them if they work one of these days, ie whether you will pay the normal rate of pay or an enhanced rate, eg time-and-a-half or double time
Note that if you allow a worker time off for bank and public holidays over a significant period of time, it may become an implied term of their contract via custom and practice, ie the term is not actually written in the contract document but is still part of the contract.
Part-time staff
Part-time staff have the same entitlement to leave as full-time workers. Therefore, if full-time staff are given paid leave for bank and public holidays, part-time workers should also receive this benefit on a pro-rata basis.
This can be a problem if most of the bank and public holidays fall on days when a part-time worker doesn't normally work.
A best practice example is as follows:
An employer has both part-time and full-time staff. In a particular year, there are ten bank/public holidays. The full-time staff work a five-day week, Monday to Friday. There are also part-time staff working a two-day week, some on Monday and Tuesday, some on Wednesday and Thursday, and some working varying days.
The employer allows all workers the day off in respect of all bank/public holidays falling on a day they would ordinarily have worked. Furthermore, for those part-time staff working Wednesday and Thursday (or varying days) who would never (or rarely) work on the day a bank/public holiday falls, the employer allows them a pro-rata entitlement of days off in lieu based on the number of days they work, by way of best practice. They, therefore, receive two-fifths of the ten-day entitlement.
This approach ensures that all workers enjoy a share of the benefits received by full-time staff.
Read more on employing part-time workers.
Bank and public holiday dates
When the Christmas and New Year public holidays fall at a weekend, other weekdays are declared public holidays. These are usually the following Monday and, if necessary, the Tuesday.
If a worker normally works weekends, and Christmas Day, Boxing Day or New Year's Day fall on a weekend, entitlement to time off depends on their employment contract. This may be something that is explicitly agreed upon in the terms of the contract or could have been incorporated through custom and practice.
However, entitlement will not depend on the contract if you are operating on the statutory entitlement of 5.6 weeks.
See bank and public holidays in Northern Ireland.
Special bank holidays
Dates of bank holidays can be changed or extra holidays declared to celebrate special occasions. For example, there was an extra bank holiday on Monday 8 May 2023 to mark the coronation of His Majesty King Charles III.
A worker's minimum paid annual leave entitlement is 5.6 weeks. There is no statutory time off for bank holidays and public holidays. However, you may choose to include these as part of that worker's entitlement.
Where a worker's contract states they are entitled to the statutory minimum annual leave, an extra bank holiday would not increase their paid holiday entitlement.
However, if a worker had a contract that entitles them to 20 days' annual leave plus all bank and public holidays, they should be entitled to the additional bank holiday as annual leave.
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Taking holiday - notice periods, restrictions and sickness
Holiday request procedures, notice periods what to do when workers are sick.
Workers must give you notice that they wish to take leave. You can agree the notice period with your workers and should set this out in writing.
If there is no agreement in place, they must give notice of at least twice the length of the intended leave period. You must reply within the same length of time as the intended leave.
For example, if the worker gives two days' notice for one day's leave, you must reply within one day. Even if the worker gives sufficient notice, you may still refuse the request - but be as reasonable as you can. You should retain a record of the refusal reason, and act consistently with respect to any refusals, within reason.
Restricting when holiday may be taken
You may restrict the taking of leave. Restrictions could:
- be stated in the employment contract
- have built up via custom and practice
- be negotiated with trade unions or employee representatives
Examples include:
- specifying periods when leave may or may not be taken
- capping the amount of leave that can be taken at any one time
- shutting down for certain periods, eg between Christmas and New Year or for two weeks in August
If you don't have an agreement for taking leave and you want workers to take all or part of their holiday entitlement on certain dates, you must give notice of at least twice as long as the leave period.
Resolve clashes between requests for leave by considering the needs of the business, eg peak season or a quieter period, the individual circumstances, or by setting out clear rules for booking leave. It may be helpful to formalise cover for key staff on annual leave.
If you set restrictions on when holidays can be taken, bear in mind the need to avoid indirect discrimination - read more on how to prevent discrimination and value diversity.
You should also note that it's unlawful to prevent a worker from taking their statutory paid holiday entitlement. Therefore, you may have to allow a worker's annual leave request right at the end of the leave year to ensure that they have taken their full entitlement of 5.6 weeks or 4 weeks where you have agreed carry over.
Workers will also be able to carry over up to 4 weeks of holiday leave where:
- the employer fails to recognise a worker's right to paid holiday leave
- the employer fails to give the worker reasonable opportunity to take holiday leave or to encourage them to do so
- the employer fails to inform the worker that any holiday leave not taken by the end of the holiday leave year, which can be carried over, will be lost
Accruing annual leave during sick leave
A worker continues to accrue their statutory minimum holiday entitlement as normal while absent from work due to sickness. This is regardless of how long the period of sickness lasts.
Depending on the terms of their employment contract, they may also accrue any additional contractual annual leave that they would normally be entitled to.
Taking annual leave during sick leave
A worker is entitled to take statutory annual leave while on sick leave.
If the worker chooses to take annual leave while they are on sick leave but they are not receiving any sick pay, you pay them their normal holiday pay.
A worker is most likely to choose to take annual leave while on sick leave if they are:
- not entitled to sick pay of any kind
- on sick leave for a long period and, as a result, you have stopped paying them sick pay
- due to return to work shortly before the end of the leave year and, as a result, would be unable to take their full holiday entitlement following their return to work
Changing annual leave to sick leave
A worker can choose to change a period of annual leave during which they are sick to sick leave. This would occur if they either:
- become sick while on annual leave
- have a period of sick leave that continues into a pre-arranged period of annual leave
Once the worker returns to work, they can then make arrangements to take the annual leave they missed at a later date.
Where a worker is on sick leave instead of annual leave, you should consider asking them for evidence of their sickness in line with your usual sickness absence procedures and in line with any eligibility criteria for statutory sick pay.
For example, to qualify for full pay while sick, you could:
- require a worker to inform you as soon as reasonably possible that they are sick
- request that they provide you with medical evidence of that sickness
For more information about sick pay, see understanding statutory sick pay.
Carrying over annual leave that is left untaken due to sickness
If a worker is unable to take all their statutory annual leave entitlement within a leave year because of illness, they will be entitled to carry forward up to 4 weeks of the unused statutory entitlement to the next leave year. Holiday leave carried over in this way must be taken by the end of the period of 18 months from the end of the holiday leave year in which the entitlement originally arose.
If you need further advice on sick leave and/or annual leave, you should contact the Labour Relations Agency Workplace Information Service on Tel 03300 555 300.
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Holiday pay on termination of employment
Calculating holiday pay when workers leave your employment.
When your workers leave a job - even if you have dismissed them without notice for gross misconduct - they must receive pay for any statutory leave they are entitled to in the current leave year but have not taken.
This entitlement is not subject to a minimum period of employment.
Formula to calculate pay due to workers who resign
You can work out the pay due using the simple formula (A x B) - C, where:
- A is the total holiday entitlement for the year
- B is the fraction of the year to the date of leaving
- C is the amount of holidays already taken
Example: Part-time worker
For example, a part-time worker works three days per week. Like all workers, they are entitled to 5.6 weeks of paid annual leave.
They leave a job seven months into the leave year having taken eight days off. This is the equivalent of 2.66 weeks (8 ÷ 3).
Applying the formula above: 5.6 x (7 ÷ 12) - 2.66 = 0.61 weeks' leave to be paid in lieu.
Note that, if you need to, you should round this figure up to prevent underpayment.
If you pay a worker on a daily basis, you can also work out their outstanding holiday entitlement in days.
Example: Full-time worker
For example, a worker working five days per week is entitled to 5.6 weeks per year, the equivalent of 28 days (5.6 x 5).
They leave a job three months into the year having taken four days off.
Applying the formula above: 28 x (3 ÷ 12) - 4 = 3 days' leave to be paid in lieu.
Note that, if you need to, you should round this figure up to prevent underpayment.
You need to get the worker's signed agreement to make a deduction from the final payment to them for any leave taken over their entitlement.
Calculate pay when workers fail to give the correct period of notice
Holiday pay would usually sit separately from notice entitlement and would be earned up to the date the worker leaves your employment.
However, if a worker leaves employment without giving the correct period of notice, they could be in breach of their employment contract if the contract contains a clause stating what will happen if this occurs eg deductions will be made from earned pay.
Calculating leave pay due to workers who you dismiss
If you dismiss a worker, they have the right to be paid for leave accrued during their period of employment, no matter how short it was.
To work out B when using the formula above, you need to know the worker's termination date.
If you dismiss a worker with notice, the termination date is the date the notice period expires.
If you dismiss a worker without notice, the termination date is the date you summarily dismissed the worker.
An employee's written statement of employment particulars should contain information to enable them to calculate their entitlement to accrued holiday pay when they leave.
Taking annual leave during the notice period
A worker may wish to take some or all of their outstanding annual leave as part of their notice period. This should be treated the same as for any other holiday request - taking into account your usual procedure for authorising annual leave. Read more on taking holiday - notice periods, restrictions and sickness.
You can also insist by giving appropriate notice or because it is clearly expressed in the contract of employment, that a worker takes any holiday owed to them as part of their notice period.
If a worker takes part of their paid leave entitlement during their notice period, you may reduce their notice pay by the amount of holiday pay, provided it is in respect of the same leave year.
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Managing staff holiday entitlement: five top tips
Follow these tips to help you successfully manage each worker’s holiday entitlement.
The majority of your workers are legally entitled to paid holidays. The following top tips will help you to successfully manage each worker's holiday entitlement.
Top tips for employers to manage staff holiday entitlement
1. Calculate holiday entitlement
A worker's statutory paid holiday entitlement starts on the first day of employment and is 5.6 weeks per year (28 days for a worker working a five or six-day week) - see holiday entitlement and statutory holiday pay.
2. Consider irregular hours
Ensure that you work out holiday entitlement for any staff who don't have regular working arrangements. These can include part-time workers, shift workers, and casual workers - see calculating holiday entitlement for atypical workers.
3. Include in employment contracts
Set out your employee's paid holiday entitlement in their employment contract to avoid any disagreements - see the employment contract.
4. Consider bank and public holidays
You do not have to give staff paid time off for bank or public holidays, but ensure that you include this in your employees' contracts. If you allow a worker time off for bank and public holidays over a significant period of time, be aware that it may become an implied term of their contract, even if it is not written in the contract of employment - see pay and time off on public and bank holidays.
5. Agree notice periods
Workers must give you notice if they wish to take leave. You can agree the notice period with them and you should set this out clearly in writing - see taking holiday - notice periods, restrictions, and sickness.
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Calculate holiday entitlement and holiday pay
In this guide:
- Know how much holiday to give your staff
- Advantages of managing staff holiday entitlement
- Holiday entitlement and statutory holiday pay
- Calculate holiday entitlement and holiday pay
- Calculating holiday entitlement for atypical workers
- Holiday entitlement for employees on statutory family-related leave
- Pay and time off on public and bank holidays
- Taking holiday - notice periods, restrictions and sickness
- Holiday pay on termination of employment
- Managing staff holiday entitlement: five top tips
Advantages of managing staff holiday entitlement
Details the advantages of managing holiday entitlement for workers in your business.
It is beneficial to both your business and your staff if you manage holiday entitlement correctly.
Disagreements over holidays and holiday pay are common if entitlements are not clearly agreed upon and set out in writing. These disagreements could lead to a deterioration in your relationship with your staff and possible complaints to industrial tribunals.
In addition, almost all workers above school leaving age are entitled to statutory paid holiday entitlement, so you should be aware of what this means for your business and manage how it is worked out for each worker.
Advantages of managing staff holiday entitlement
Effectively managing staff holiday entitlement can bring several business benefits:
- Staff who are able to take regular holidays can feel more valued and become more motivated about their work which helps them to perform more effectively.
- Having a break from the workplace ensures staff are less prone to accidents and less likely to suffer from stress because they have regular opportunities to rest.
- Having an annual leave policy and including paid holiday entitlement in employees' employment contracts ensures the rules and processes are clear to everyone. This will help you to take a consistent approach to annual leave across the business so that employees feel they have been treated fairly.
- Having a policy and appropriate procedures in place also minimises the opportunity for disputes. A worker is more likely to be granted an annual leave request if the appropriate procedure has been followed and they have given you sufficient notice of the leave so you can prepare for the absence.
- You should also experience a decrease in sick leave and staff turnover because staff feel more appreciated overall and are less likely to resort to sick leave when they need to take time off work.
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Holiday entitlement and statutory holiday pay
Minimum statutory annual leave entitlement, unused holidays, and how to set these arrangements out in writing.
Almost all workers above school leaving age - not just employees but also, for example, agency and casual workers - are entitled to 5.6 weeks of paid holiday per leave year (28 days for a worker working a five or six-day week).
The 5.6 weeks is a minimum holiday entitlement - you can choose to offer more.
You can count any days off for public or bank holidays towards a worker's statutory holiday entitlement - but only as long as you pay them for those days off. See bank and public holiday dates.
Workers below school leaving age must have a two-week break during school holidays. Read more on employing children and young people.
When leave years may start
You may decide to have one date when your business' leave year starts or have different start dates for individual workers (or groups of workers).
If you do not have written leave arrangements, a leave year will start on the date a worker's employment begins and on each subsequent anniversary of that date.
Holiday entitlement: staff working a six-day week
The statutory paid holiday entitlement is capped at 28 days.
Although 5.6 weeks would equal 33.6 days for someone working a six-day week (5.6 x 6), because of the cap, staff working a six-day week are only entitled to 28 days' paid holiday. However, that is the minimum statutory allowance. If you wish you can increase the holiday entitlement under an employee's contract of employment.
Holiday entitlement and the contract of employment
You must set out an employee's paid holiday entitlement in their written statement of terms and conditions of employment.
This should enable them to work out their entitlement and pay for any untaken holiday if they leave. See the employment contract.
Workers not entitled to the statutory minimum paid holiday entitlement
The following types of workers do not have the right to benefit from the minimum paid holiday entitlement:
- The genuinely self-employed, who can take as little or as much holiday as they choose.
- Those whose jobs may conflict with the requirement to take annual leave requirements, eg the armed forces, the police, and those involved in civil protection (these workers have to rely on their contracts of employment for their rights to holiday).
- Workers in some sectors are excluded from the Working Time Regulations (Northern Ireland) 2016 because they are covered by separate regulations. The entitlement to annual leave of mobile staff working in the civil aviation sector, for example, is governed by the Civil Aviation (Working Time) Regulations 2004.
Carrying over unused paid holiday
A worker may wish to carry over unused holidays from the current leave year to the next.
Under European Union (EU) derived law, a worker must take at least 4 weeks holiday per leave year. If they take less than this, they cannot carry it over.
However, in the UK, the statutory entitlement is 5.6 weeks. What a worker may do with the additional 1.6 weeks depends on their employer's arrangements. You can either:
- have an arrangement that workers must take their full statutory entitlement of 5.6 weeks in any leave year
- allow workers to carry over any of the additional 1.6 weeks that remain untaken into the next leave year - although they must take it by the end of the next leave year
If an employee has an additional contractual entitlement over and above the 5.6 weeks, it again depends on their contract of employment whether or not they can either carry it over or will receive pay in lieu for any of the entitlement that remains untaken.
If you do allow workers to carry over any contractual annual leave entitlement, you can have your own rules on when they must take it. For example, you could state that workers must take the carried-over leave within three months of the start of the next leave year.
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Calculate holiday entitlement and holiday pay
Guidance for employers on how to calculate holiday entitlement, calculate holiday pay, and what to do with untaken leave.
A worker's entitlement to paid annual leave starts on the first day of employment and is not subject to a minimum period of employment.
Holiday entitlement accrual
The Regulations permit an employer to operate a holiday accrual system for workers who are in their first year of employment (only). In practice, this means that a new worker will accrue one-twelfth of their annual holiday entitlement each month they are employed. This will apply from the start of each month.
Calculating holiday pay
For each week of leave accrued, workers are entitled to one week's normal pay. A week's pay is calculated according to the type of work carried out:
- for workers on fixed hours and pay, it equals the amount due for a week's work, averaged over the preceding 12 weeks
- for workers on fixed hours and variable pay (bonus, commission, or piece workers), it equals the average hourly rate (over the preceding 12 weeks) multiplied by the normal working hours in a week
- for shift workers, it equals the average weekly hours of work in the preceding 12 weeks at the average hourly rate
- for workers with no normal working hours, a week's pay is the average pay received over the preceding 12 weeks.
The 12-week reference period should be made up of 12 weeks in which pay was due to the worker. Any week in which no remuneration was payable to the worker should be discounted, as should any weeks where the employee was for any amount of time on sick leave, maternity leave, adoption leave, shared parental leave, parental leave, or paternity leave.
If any weeks are discounted, ie no pay was received for a particular week, or the worker was on statutory leave as outlined above, earlier weeks should be considered until you get as close to 12 weeks as possible. In these circumstances, the maximum period you go back is 24 weeks.
If the worker has been employed for less than 12 weeks, holiday pay is based on the number of complete weeks for which the worker has been employed.
Calculate holiday pay for hourly paid staff
To calculate the average hourly rate, you only count the hours where the worker was working and the pay that related to those hours.
Staff should receive the same pay during any holiday period as they would if they were at work. Therefore, when calculating holiday pay for the 4 weeks of paid holiday leave derived from European law, an employer must include payments which are intrinsically linked to the performance of tasks the employee is obliged to carry out under the terms of the contract. This includes commission, bonuses, regularly paid allowances, and payment for additional hours the employee normally and repeatedly works. Other payments, such as overtime payments regularly paid to the employee should also be included, as should payments for professional or personal status relating to length of service, seniority, or professional qualifications. Employers may decide to extend this calculation to the full 5.6 weeks statutory paid holiday entitlement, but they do not have to.
However, case law has suggested all paid annual leave should be treated as a composite whole where each day of a holiday a worker takes includes, on a fractional basis, the various elements making up their total holiday entitlement (whether they be contractual or statutory). Employers should take this into account when making holiday payments where they are only applying the law on overtime, commission, allowances, bonuses etc (as outlined above) to the 4 weeks of holiday derived from European law to ensure underpayments of holiday pay are avoided.
The question of how much pay a worker is due during a period of holiday can be complex and has been the subject of several court judgments. Further information is available from the LRA Workplace Information Service on Tel 03300 555 300.
Calculate holiday entitlement for your employees.
Payments for untaken statutory holiday
In the UK, the statutory annual leave entitlement is 5.6 weeks. A worker must take at least four weeks' paid holiday per leave year.
What a worker does with the remaining 1.6 weeks depends on their employment contract.
For example, you could allow them to carry those 1.6 weeks into the next leave year or state that all 5.6 weeks must be taken by the end of the leave year.
However, you cannot make a payment in lieu for any days that remain untaken. The only time you can make a payment in lieu of the statutory holiday entitlement is when the contract of employment terminates, and the worker has accrued entitlement to holidays and is unable to take them before they leave.
Payments for untaken contractual holiday
At the end of a leave year, you may find you have an employee who has some untaken contractual annual leave, ie annual leave over and above the statutory minimum of 5.6 weeks.
Depending on their employment contract, the employee may be entitled to either carry over the untaken days, or receive a payment in lieu of those untaken days.
When to pay workers their statutory holiday pay
Workers must receive their statutory holiday pay at the time that leave is taken.
It's, therefore, unlawful to not pay a worker while they are on holiday and pay them an allowance as part of their wages or salary instead - a system known as rolled-up holiday pay.
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Calculating holiday entitlement for atypical workers
How to work out statutory paid annual leave for part-time staff, shift workers, casual workers, and others.
There are various ways of working out the holiday entitlement for workers who don't have regular working arrangements or patterns.
Part-time workers
Paid holiday entitlement is calculated pro-rata for part-time workers.
For example, if a member of staff works three days a week, they are entitled to 16.8 days (5.6 x 3).
Shift workers
It is sometimes easier to calculate holiday entitlement as shifts.
For example, if a member of staff works four 12-hour shifts followed by four days off, the average working week is 3.5 12-hour shifts. So 5.6 weeks' holiday is 5.6 x 3.5 = 19.6 12-hour shifts.
For other shift patterns, it may be easiest to calculate according to the established repeating pattern.
More irregular working patterns: calculating holidays in hours
Annualised hours
If a member of staff works annualised hours, you need to calculate how many hours a week they work on average over the whole year.
For example, if a member of staff works a total of 1,600 hours a year, or 34.48 hours a week over 46.4 weeks of the year, the holiday entitlement is 5.6 weeks x 34.48 hours a week = 193.09 hours of holiday for the year.
Compressed hours
For someone working compressed hours, for example, a 36-hour week over four days instead of five, their annual holiday entitlement is 36 hours x 5.6 weeks = 201.6 hours of holiday for the year.
Rather than taking a day's holiday, they would take the number of hours that they would have otherwise worked on that day (ie for 36 hours worked over four days, they would take nine hours' holiday for each day otherwise worked).
Calculating no fixed hours contracts (casual work, including zero-hours contracts)
To calculate the average hourly rate, only the hours worked and how much was paid for them should be counted. Take the average rate over the last 12 weeks.
A 'week' usually runs from Sunday to Saturday. Only use another 7-day period (like Thursday to Wednesday) if that's how a worker's pay is calculated.
You can also get further information from the LRA Workplace Information Service on Tel 03300 555 300.
Part days
Calculations may result in part days, eg 22.4 days for someone working four days a week. In some cases, it may be easier to work the holidays out in hours.
If this is the case, you could:
- Allow the worker to leave early or arrive late one day. For example, for someone working an eight-hour day taking 0.4 of a day's holiday, you could allow them to leave after working for four hours and 48 minutes (480 minutes x 0.6 of a working day = 288 minutes) or allow them to arrive three hours and 12 minutes late (0.4 of a working day).
- Round the entitlement up to the nearest full day - or half day if this is still easy for you to administer. You cannot round entitlements down.
- Allow the worker to carry the part day over into the next leave year (and then perhaps round up to the nearest full day).
- Pay them for a part day. However, you can only do this if the worker's paid holiday entitlement is more than 5.6 weeks as you cannot pay a worker in lieu of an untaken statutory holiday - see calculating and paying holiday pay.
Term time or part-year workers
Recent case law has determined workers employed on a continuous contract throughout the year, and who work for varying hours during certain weeks of the year, such as those who work only term time, are entitled to 5.6 weeks of leave each year. This entitlement applies even though there are some weeks in the year when they do not work.
In such instances, holiday pay is calculated by averaging the pay received during the 12 weeks before the commencement of their leave. If there are weeks during the 12-week period where no pay was received, these weeks are disregarded and the employer must count back to include a total of 12 weeks in which pay was received.
Although there may be times when a part-year worker receives a higher payment than a full-time worker - this is compliant with the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations (Northern Ireland) 2000, as the part-time worker is not being treated less favourably. There is no legislative provision to prevent part-time workers from being treated more favourably.
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Holiday entitlement for employees on statutory family-related leave
Holiday entitlement for staff on family-related leave.
Employees taking statutory maternity, adoption, paternity, parental leave, and parental bereavement leave will continue to accrue statutory paid holiday and, in many cases, any contractual holiday entitlement. If, by the end of the current holiday year, an employee has been prevented from taking part or all of their holiday leave entitlement due to being on one of these types of statutory leave, they have a right to carry over up to 5.6 weeks untaken statutory holiday leave into the new holiday year.
Holiday entitlement and maternity/adoption leave
Employees on maternity or adoption leave continue to accrue both statutory and any contractual paid holiday during both ordinary and additional maternity/adoption leave.
A statutory paid holiday cannot be taken at the same time as maternity/adoption leave. When you are planning for the maternity/adoption leave, you may wish to discuss taking any outstanding holiday and perhaps delay the start of their maternity/adoption leave.
Alternatively, it may be possible for them to take holiday at the end of the maternity/adoption leave period.
If a new holiday year starts, the employee is on maternity/adoption leave and holidays haven't been taken, the employee has a right to carry over up to 5.6 weeks untaken statutory holiday leave to the new holiday year.
When you are planning, you should both be aware that maternity and adoption leave cannot start later than the date of the child's birth or placement for adoption, so an early birth or placement could shorten the amount of annual leave the employee is able to take.
Read more on maternity leave and pay and adoption leave and pay.
Holiday entitlement and paternity leave
Employees continue to accrue their statutory and any contractual paid holiday entitlement while they are on statutory paternity leave.
Read more on paternity leave and pay.
Holiday entitlement and shared parental leave
Employees continue to accrue their statutory and any contractual paid holiday entitlement while they are on shared parental leave.
Read more on shared parental leave and pay.
Holiday entitlement and parental leave
Employees continue to accrue their statutory paid holiday entitlement while they are on parental leave. They will also continue to accrue contractual holiday entitlement if this is provided for in their contract of employment.
See parental leave and time off for dependants.
Holiday entitlement and parental bereavement leave
Employees continue to accrue their statutory paid holiday entitlement while they are on parental bereavement leave. They will also continue to accrue contractual holiday entitlement if this is provided for in their contract of employment.
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Pay and time off on public and bank holidays
Including bank and public holidays as part of your workers' statutory paid holiday entitlement.
You do not have to give staff paid time off for bank and public holidays. However, you should set out in a worker's contract:
- any right to time off on bank and public holidays
- whether or not that time off is paid
- what you will pay them if they work one of these days, ie whether you will pay the normal rate of pay or an enhanced rate, eg time-and-a-half or double time
Note that if you allow a worker time off for bank and public holidays over a significant period of time, it may become an implied term of their contract via custom and practice, ie the term is not actually written in the contract document but is still part of the contract.
Part-time staff
Part-time staff have the same entitlement to leave as full-time workers. Therefore, if full-time staff are given paid leave for bank and public holidays, part-time workers should also receive this benefit on a pro-rata basis.
This can be a problem if most of the bank and public holidays fall on days when a part-time worker doesn't normally work.
A best practice example is as follows:
An employer has both part-time and full-time staff. In a particular year, there are ten bank/public holidays. The full-time staff work a five-day week, Monday to Friday. There are also part-time staff working a two-day week, some on Monday and Tuesday, some on Wednesday and Thursday, and some working varying days.
The employer allows all workers the day off in respect of all bank/public holidays falling on a day they would ordinarily have worked. Furthermore, for those part-time staff working Wednesday and Thursday (or varying days) who would never (or rarely) work on the day a bank/public holiday falls, the employer allows them a pro-rata entitlement of days off in lieu based on the number of days they work, by way of best practice. They, therefore, receive two-fifths of the ten-day entitlement.
This approach ensures that all workers enjoy a share of the benefits received by full-time staff.
Read more on employing part-time workers.
Bank and public holiday dates
When the Christmas and New Year public holidays fall at a weekend, other weekdays are declared public holidays. These are usually the following Monday and, if necessary, the Tuesday.
If a worker normally works weekends, and Christmas Day, Boxing Day or New Year's Day fall on a weekend, entitlement to time off depends on their employment contract. This may be something that is explicitly agreed upon in the terms of the contract or could have been incorporated through custom and practice.
However, entitlement will not depend on the contract if you are operating on the statutory entitlement of 5.6 weeks.
See bank and public holidays in Northern Ireland.
Special bank holidays
Dates of bank holidays can be changed or extra holidays declared to celebrate special occasions. For example, there was an extra bank holiday on Monday 8 May 2023 to mark the coronation of His Majesty King Charles III.
A worker's minimum paid annual leave entitlement is 5.6 weeks. There is no statutory time off for bank holidays and public holidays. However, you may choose to include these as part of that worker's entitlement.
Where a worker's contract states they are entitled to the statutory minimum annual leave, an extra bank holiday would not increase their paid holiday entitlement.
However, if a worker had a contract that entitles them to 20 days' annual leave plus all bank and public holidays, they should be entitled to the additional bank holiday as annual leave.
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Taking holiday - notice periods, restrictions and sickness
Holiday request procedures, notice periods what to do when workers are sick.
Workers must give you notice that they wish to take leave. You can agree the notice period with your workers and should set this out in writing.
If there is no agreement in place, they must give notice of at least twice the length of the intended leave period. You must reply within the same length of time as the intended leave.
For example, if the worker gives two days' notice for one day's leave, you must reply within one day. Even if the worker gives sufficient notice, you may still refuse the request - but be as reasonable as you can. You should retain a record of the refusal reason, and act consistently with respect to any refusals, within reason.
Restricting when holiday may be taken
You may restrict the taking of leave. Restrictions could:
- be stated in the employment contract
- have built up via custom and practice
- be negotiated with trade unions or employee representatives
Examples include:
- specifying periods when leave may or may not be taken
- capping the amount of leave that can be taken at any one time
- shutting down for certain periods, eg between Christmas and New Year or for two weeks in August
If you don't have an agreement for taking leave and you want workers to take all or part of their holiday entitlement on certain dates, you must give notice of at least twice as long as the leave period.
Resolve clashes between requests for leave by considering the needs of the business, eg peak season or a quieter period, the individual circumstances, or by setting out clear rules for booking leave. It may be helpful to formalise cover for key staff on annual leave.
If you set restrictions on when holidays can be taken, bear in mind the need to avoid indirect discrimination - read more on how to prevent discrimination and value diversity.
You should also note that it's unlawful to prevent a worker from taking their statutory paid holiday entitlement. Therefore, you may have to allow a worker's annual leave request right at the end of the leave year to ensure that they have taken their full entitlement of 5.6 weeks or 4 weeks where you have agreed carry over.
Workers will also be able to carry over up to 4 weeks of holiday leave where:
- the employer fails to recognise a worker's right to paid holiday leave
- the employer fails to give the worker reasonable opportunity to take holiday leave or to encourage them to do so
- the employer fails to inform the worker that any holiday leave not taken by the end of the holiday leave year, which can be carried over, will be lost
Accruing annual leave during sick leave
A worker continues to accrue their statutory minimum holiday entitlement as normal while absent from work due to sickness. This is regardless of how long the period of sickness lasts.
Depending on the terms of their employment contract, they may also accrue any additional contractual annual leave that they would normally be entitled to.
Taking annual leave during sick leave
A worker is entitled to take statutory annual leave while on sick leave.
If the worker chooses to take annual leave while they are on sick leave but they are not receiving any sick pay, you pay them their normal holiday pay.
A worker is most likely to choose to take annual leave while on sick leave if they are:
- not entitled to sick pay of any kind
- on sick leave for a long period and, as a result, you have stopped paying them sick pay
- due to return to work shortly before the end of the leave year and, as a result, would be unable to take their full holiday entitlement following their return to work
Changing annual leave to sick leave
A worker can choose to change a period of annual leave during which they are sick to sick leave. This would occur if they either:
- become sick while on annual leave
- have a period of sick leave that continues into a pre-arranged period of annual leave
Once the worker returns to work, they can then make arrangements to take the annual leave they missed at a later date.
Where a worker is on sick leave instead of annual leave, you should consider asking them for evidence of their sickness in line with your usual sickness absence procedures and in line with any eligibility criteria for statutory sick pay.
For example, to qualify for full pay while sick, you could:
- require a worker to inform you as soon as reasonably possible that they are sick
- request that they provide you with medical evidence of that sickness
For more information about sick pay, see understanding statutory sick pay.
Carrying over annual leave that is left untaken due to sickness
If a worker is unable to take all their statutory annual leave entitlement within a leave year because of illness, they will be entitled to carry forward up to 4 weeks of the unused statutory entitlement to the next leave year. Holiday leave carried over in this way must be taken by the end of the period of 18 months from the end of the holiday leave year in which the entitlement originally arose.
If you need further advice on sick leave and/or annual leave, you should contact the Labour Relations Agency Workplace Information Service on Tel 03300 555 300.
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Holiday pay on termination of employment
Calculating holiday pay when workers leave your employment.
When your workers leave a job - even if you have dismissed them without notice for gross misconduct - they must receive pay for any statutory leave they are entitled to in the current leave year but have not taken.
This entitlement is not subject to a minimum period of employment.
Formula to calculate pay due to workers who resign
You can work out the pay due using the simple formula (A x B) - C, where:
- A is the total holiday entitlement for the year
- B is the fraction of the year to the date of leaving
- C is the amount of holidays already taken
Example: Part-time worker
For example, a part-time worker works three days per week. Like all workers, they are entitled to 5.6 weeks of paid annual leave.
They leave a job seven months into the leave year having taken eight days off. This is the equivalent of 2.66 weeks (8 ÷ 3).
Applying the formula above: 5.6 x (7 ÷ 12) - 2.66 = 0.61 weeks' leave to be paid in lieu.
Note that, if you need to, you should round this figure up to prevent underpayment.
If you pay a worker on a daily basis, you can also work out their outstanding holiday entitlement in days.
Example: Full-time worker
For example, a worker working five days per week is entitled to 5.6 weeks per year, the equivalent of 28 days (5.6 x 5).
They leave a job three months into the year having taken four days off.
Applying the formula above: 28 x (3 ÷ 12) - 4 = 3 days' leave to be paid in lieu.
Note that, if you need to, you should round this figure up to prevent underpayment.
You need to get the worker's signed agreement to make a deduction from the final payment to them for any leave taken over their entitlement.
Calculate pay when workers fail to give the correct period of notice
Holiday pay would usually sit separately from notice entitlement and would be earned up to the date the worker leaves your employment.
However, if a worker leaves employment without giving the correct period of notice, they could be in breach of their employment contract if the contract contains a clause stating what will happen if this occurs eg deductions will be made from earned pay.
Calculating leave pay due to workers who you dismiss
If you dismiss a worker, they have the right to be paid for leave accrued during their period of employment, no matter how short it was.
To work out B when using the formula above, you need to know the worker's termination date.
If you dismiss a worker with notice, the termination date is the date the notice period expires.
If you dismiss a worker without notice, the termination date is the date you summarily dismissed the worker.
An employee's written statement of employment particulars should contain information to enable them to calculate their entitlement to accrued holiday pay when they leave.
Taking annual leave during the notice period
A worker may wish to take some or all of their outstanding annual leave as part of their notice period. This should be treated the same as for any other holiday request - taking into account your usual procedure for authorising annual leave. Read more on taking holiday - notice periods, restrictions and sickness.
You can also insist by giving appropriate notice or because it is clearly expressed in the contract of employment, that a worker takes any holiday owed to them as part of their notice period.
If a worker takes part of their paid leave entitlement during their notice period, you may reduce their notice pay by the amount of holiday pay, provided it is in respect of the same leave year.
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Managing staff holiday entitlement: five top tips
Follow these tips to help you successfully manage each worker’s holiday entitlement.
The majority of your workers are legally entitled to paid holidays. The following top tips will help you to successfully manage each worker's holiday entitlement.
Top tips for employers to manage staff holiday entitlement
1. Calculate holiday entitlement
A worker's statutory paid holiday entitlement starts on the first day of employment and is 5.6 weeks per year (28 days for a worker working a five or six-day week) - see holiday entitlement and statutory holiday pay.
2. Consider irregular hours
Ensure that you work out holiday entitlement for any staff who don't have regular working arrangements. These can include part-time workers, shift workers, and casual workers - see calculating holiday entitlement for atypical workers.
3. Include in employment contracts
Set out your employee's paid holiday entitlement in their employment contract to avoid any disagreements - see the employment contract.
4. Consider bank and public holidays
You do not have to give staff paid time off for bank or public holidays, but ensure that you include this in your employees' contracts. If you allow a worker time off for bank and public holidays over a significant period of time, be aware that it may become an implied term of their contract, even if it is not written in the contract of employment - see pay and time off on public and bank holidays.
5. Agree notice periods
Workers must give you notice if they wish to take leave. You can agree the notice period with them and you should set this out clearly in writing - see taking holiday - notice periods, restrictions, and sickness.
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