Lawyers warn of 拢75,000 fines if firms fail to comply with the Information and Consultation Regulations

Lawyers are warning that some construction firms are not prepared for changes to UK employment law that come into effect this week.

Under the Information and Consultation Regulations, employees must be consulted on business decisions affecting their employment prospects if they make this request. Firms that fail to agree a consultation method or subsequently fail to consult staff face fines of up to 拢75,000.

Companies with 150 or more staff must provide information on a wide range of issues, including redundancies, mergers, transfer of undertakings, changes to senior management, business strategies and company finances.

Where companies have an agreed consultation system, a request from 40% of staff could force them to provide more information and consultation. If firms do not have an agreed mechanism, the threshold drops to 10% of employees.

Any employer that ignores these requests, or otherwise breaks the law, could be fined by the Central Arbitration Committee, a government body set up to decide union recognition claims.

Lawyers are warning that companies that do not set up a consultation system are vulnerable to employee or trade union pressure under the 10% rule.

Edward Goodwyn of law firm Pinsent Masons said: 鈥淚f companies are forced into consultation, the statutory provisions take effect, which lay down specific obligations that are much more onerous [for employers].鈥�

Goodwyn said unions could use the law to strengthen their position in firms by encouraging 10% of staff to make a request, thus setting the statutory provisions in motion. Unions could then nominate staff representatives.

Bob Blackman, national secretary of the T&G union, said he wanted union representatives involved in the consultation arrangements. He said: 鈥淪ome companies may set up a structure we don鈥檛 like. We are looking to get agreements with companies to comply with the regulations.鈥�

The regulations, introduced in response to a European Union directive, are being phased in over three years. In April 2007 they will be extended to firms with at least 100 staff, and in April 2008 to firms with 50 or more employees.

A Construction Confederation spokesperson said it was concerned the 10% threshold was too low, particularly for small firms, which are unlikely to have consultation agreements. 鈥淚n a few years time, a firm with 50 staff could find that just five non-typical employees have a platform. For trade union recognition a 40% vote is needed. This could be a backdoor that unions want to use.鈥�