Advantages and disadvantages of employees working at home
In this guide:
- Employees working from home
- Advantages and disadvantages of employees working at home
- Types of work and skills suited to home working
- Employment contracts and working from home
- Providing equipment for employees who work at home
- Effectively manage employees who work from home
- Your health and safety obligations towards home workers
- How technology can facilitate working from home
- Responsibilities of home workers
- Hybrid working: employer guidance
- Managing employees working from home: seven top tips
Advantages and disadvantages of employees working at home
Key advantages and disadvantages of home working - from productivity boosts to problems monitoring performance.
Home working opens up a new range of possibilities for the way businesses can work and structure themselves. The outbreak of the coronavirus (COVID-19) pandemic in March 2020, gave employers and employees a practical insight into home working as commercial premises had to shut down in response to the government's requirements to protect public health.
Before the coronavirus pandemic, working from home was on the increase as many employers identified the benefits that it can bring to their business and the improved work-life balance for their employees. Even if you don't think working from home would be beneficial for your business, employees with 26 weeks of service have a statutory right to request flexible-working arrangements such as home working and you, as an employer, have to seriously consider such requests.
Advantages of employees working from home
With increasing numbers of employees working at home - or using home as a working base for at least part of the week - it's clear there are a number of benefits for business, such as:
Flexibility and agility
Home working enables more agility and flexibility in working arrangements. With employees no longer tied to an office, they may be better placed and more willing to work flexible hours such as earlier or later in the day or even at weekends. This may help you meet certain business needs eg if you are trading with customers residing in a different time zone.
Improved employee retention
Home working can help retain employees as the flexibility of home working can help them meet childcare needs, reduce their commute, and enable them to fit their work around their personal lives. Being allowed to work from home, staff will also feel increased levels of trust from their employer, which can contribute greatly to staff loyalty.
Attract new talent
Home working can be offered as an incentive to come and work for you helping you to attract new talent to your business. Even just offering the option to work from home will give you an advantage in the job market over competitors that don't offer home working as an option to their staff.
Increased productivity
Due to fewer interruptions, which would normally occur in an office environment. By contrast, working from home allows for a quieter environment that can facilitate more focused work. You may also find that some employees may wish to increase their paid contractual hours as they save time that was previously spent commuting to and from the workplace.
Increased staff motivation
By working from home staff will feel more trusted by their employer as the working relationship isn't as closely monitored and employees are allowed a degree of autonomy to get on with their work. Staff will also be happier developing a home working routine that suits them better and this can contribute towards them feeling more motivated to give their best.
Improved staff health and wellbeing
Working from home eliminates the need for a commute to work which can be stressful for your employees. Time savings such as this also enable staff to get extra health benefits such as additional sleep, spending more time with family, exercising, or preparing healthier meals.
Financial benefits
Savings on office space, office supplies, utility bills, and other facilities. Staff may also be able to take advantage of the tax relief available from HM Revenue & Customs (HMRC) for working from home - see claim tax relief for your job expenses - working from home.
Convenience
You may have staff that do a lot of visits to customer locations and are therefore not regularly in the office. Allowing them to base themselves from home may be more convenient and leads to further time and cost savings.
Better work/life balance
Working from home can help employees improve their work-life balance eg staff that would have had to commute will now be able to use that time for themselves giving the basis for a better work-life balance. Staff are also able to fit in household chores around their working day giving them more free time in the evenings eg loading or unloading the dishwasher or preparing dinner on their lunch break.
Technology makes it easier
The internet has made it possible for staff to be continually connected to the office. Tools such as Skype have made communication between colleagues and teams much easier and at times can lead to more efficient and effective meetings.
Lower sickness absences
Staff are more likely to feel happier and more energised working from home and therefore less chance of their immune system is negatively impacted by burnout. Also, the fact that employees are working in isolation there is less chance of infections spreading as would be the case within an office environment.
Disadvantages of employees working from home
Though there are some disadvantages to employees working from home, most of these relate to those working from home for all, as opposed to part, of their working week:
Working from home doesn't suit everyone
Working from home might not be suited to everyone's personality or ability. Some employees might prefer the routine and structure that working in an office environment provides them. Some staff may prefer personal interaction with colleagues and also find face-to-face guidance with their manager extremely beneficial in helping them complete tasks and achieve their goals. You also need to be mindful of employees with a disability. Working from home may have a negative impact on the support they need to do their job. Working from home may also not fit in with everyone's home life eg some people may have young children that may be unaware of boundaries and cause interruptions during the working day. Others may not have the physical space required to create a suitable dedicated working area.
Staff feeling isolated
Individuals working from home may feel a disconnect from their colleagues and organisation as a whole that an office environment naturally allows. To address this issue employers could ensure that communication is more regular. So by scheduling quick catch-ups by phone or regular team meetings through other technologies like Teams, Skype, or Zoom, staff are given more opportunities to feel involved and part of the team. More informal and social catch-ups would also help counteract any feelings of isolation.
Difficulty monitoring performance
There could be difficulty managing home workers and monitoring their performance. Different personalities may also respond to monitoring with varying degrees of positivity. You could look at setting goals and targets with workers that are easily measured so that if their targets aren't being met you can identify and remedy any performance issues at an early stage. See managing staff performance and effectively manage employees who work from home.
Home distractions
Although home working removes the distractions that may occur in the office if a worker doesn't have a suitably quiet dedicated working space at home they may get easily distracted by household noises or other members of their household.
Potential burnout
Where an office provides a clear physical distinction between work and home life, working at home can lead to staff struggling to differentiate between work life and home life. This may lead to employees finding it difficult to know how to switch off from work leading to longer hours, increased stress, and inevitable burnout. Employers should encourage their staff to take regular breaks and remind them of the importance of taking their leave.
Cost of working from home
Initial costs of training and providing suitable equipment such as laptops, mobile phones, and other IT equipment. You will also have to consider adaptations to meet health and safety standards.
Problems with staff development
You may find that not having staff in close physical proximity leads to difficulty in maintaining staff development and upgrading skills. However, you could encourage staff to take the opportunity to learn new skills through online events and courses. To get started search for events on our Events Finder.
Information security risk
Information security problems could be more likely to occur when staff are working from home. There is increased risk with laptops being taken home and the need for staff to access servers remotely. Employers should ensure they put measures in place to protect company data by installing encryption software and remote-wipe apps if mobile devices provided by you go missing. Virtual private networks also encrypt your data and provide secure access to a remote computer over the internet. This helps keep your files and data secure yet accessible to your staff. See IT security and risks.
Negative impact on mental health
The switch to working from home may have a negative impact on your worker’s mental health if they are unable to find a routine that works for them, are struggling to separate work and home life, or are feeling isolated. To help you can encourage your employees to develop a working routine, set up a dedicated work space, and set boundaries for other household members. Create more opportunities for staff to stay connected by communicating through regular chats and team catch-ups. Eating healthily and taking regular exercise can also help improve mental health especially when woven into a regular routine. See simple tips to tackle working from home from the NHS.
Decreased staff morale
It can be harder to maintain team spirit when employees are working at home on their own.
Not all jobs suit home working
Working from home suits some jobs better than others. Equally, working from home suits some personality types but not others. Some people may prefer colleague contact by face-to-face communication.
Poor broadband speeds
You should be mindful that depending on where your staff live they may not be able to access broadband speeds that enable them to do their job effectively eg rural broadband is often very slow.
The coronavirus pandemic gave some employers, who may not have otherwise considered working from home an option for staff, a practical insight into how it affects their business and employees. It has enabled employers to have first-hand experience of the advantages and disadvantages of home working. This experience can be very beneficial in helping employers determine the future direction of working practices that will benefit their business.
For further information see the Labour Relation Agency's (LRA) practical guide to working from home: COVID-19 and beyond.
Hybrid working approach
A shift towards home working doesn't mean employees have to work only at home. Often splitting time between home, or other remote locations and the workplace is the most productive solution. You may want your staff to provide feedback on their working from home experience to get them involved in the process of developing a hybrid working policy.
For further guidance see hybrid working: employer guidance and the LRA's practical guide to hybrid working.
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Types of work and skills suited to home working
Types of job that are well-matched for home working and the skills employees will need.
When weighing up whether to let an employee work from home, you should consider the nature of their job.
Jobs suited to home working
Some types of work are particularly suited to home working. For example:
- telesales and marketing
- customer service
- consultancy and professional services, such as accountancy or HR administration
- writing, editing, research and translation
- some types of administrative work
Skills employees need to work at home
You also need to consider whether employees themselves are suited to working away from your base. They're likely to need skills in a number of key areas:
- time management and self-discipline
- motivation
- self-sufficiency
- communication
- technology
Home working isn't for everyone. Bear in mind that if you allow one person to do it, you may be setting a precedent that others will want to follow, so it's best to have a clear idea from the start of how home working could fit the needs of your business. You should establish fair criteria for home working as this will minimise any discrimination risk.
Remember, too, that in some cases you're legally obliged to seriously consider requests for working from home. Employees with 26 weeks' service can request a range of flexible working patterns from their employers - including the right to work from home.
Read more on flexible working: the law and best practice.
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Employment contracts and working from home
How the written statement of terms and conditions may need to be amended when implementing homeworking.
An employee's place of work is stated in the written statement of their terms and conditions of employment.
When an employee starts working from or at home, it may be necessary to amend the written statement as a result.
You must follow set procedures when changing an employment contract.
See how to change an employee's terms of employment.
Working from home arrangements during the coronavirus pandemic
The working from home arrangements that were in place during the COVID-19 pandemic were not normally considered to be permanent variations to the contract but post pandemic it may be mutually beneficial for it to become the new normal working arrangement and so it may suit both employer and employee for it to remain in place. See the Labour Relations Agency's (LRA) guide on flexible working.
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Providing equipment for employees who work at home
Your responsibilities for the equipment and furniture home workers use in carrying out their work.
As an employer you're likely to be responsible for providing, installing, and maintaining all equipment unless the employee uses their own.
Equipment you need to provide may include:
- workstation, including a suitable desk and chair
- filing cabinet, drawers, and shelving
- computer, laptop, or tablet with office software, anti-virus software, email, and broadband internet connection
- printer
- stationery and office supplies
Advances in technology allow you to create virtual teams where employees work together despite working from home.
IT equipment can be expensive, so make sure it is compatible with your existing systems and meets a genuine business need.
Read more on how technology can facilitate working from home.
Remember that you still have health and safety responsibilities for people who work at or from home. Read about your health and safety obligations towards home workers.
Insurance and rates
You'll probably need to extend your business insurance to cover equipment used by employees in their homes. The employee's home insurance policy is unlikely to cover this. They should check with their insurer to make sure they're covered for working at home.
It's also worth mentioning to potential home workers that if they use part of their home exclusively for work, they may have to pay business rates for that portion of their home. It's a good idea to get them to check the position with Land & Property Services. See how to use your home as a workplace.
You also need to ensure that employees take care of business equipment and information in their possession. Employers must ensure that data protection principles are adhered to eg establish procedures to be followed in terms of the storage and security of information and what to do if any item is damaged or lost.
Taxation
This can be complicated and worth getting specific guidance from HM Revenue & Customs in respect of liabilities and set-offs. See expenses and benefits: homeworking.
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Effectively manage employees who work from home
What you can do to make home working a success - performance monitoring, training, communication, and feedback.
Working from home can bring a wide range of benefits for both businesses and employees, but it needs to be properly managed to be successful.
Monitoring performance
Monitoring and assessing the performance of people who work at home is perhaps the most significant managerial challenge. It can be helpful to measure their effectiveness in terms of their output rather than the hours they work.
Agree on set goals and deadlines for particular tasks. Keep a close eye on how well the targets are being met and give feedback promptly and sensitively if things go wrong.
Staff training
Training can prepare employees and help them develop the skills they need. This might include:
- self-management skills, eg in time management
- general skills, eg in using IT more effectively or writing reports
- job-specific skills
Encouraging communication
For staff who work alone, a sense of isolation is one of the factors most likely to make home working fail. As a result, it's important to put formal systems in place to ensure people feel part of the team. For example:
- frequent two-way feedback sessions about work and work-related issues
- regular scheduled visits to the workplace
- inclusion in social activities
- clear procedures to follow and people to contact if things go wrong
If an employee's job is home-based from the start, it's a good idea to carry out their induction at your premises. Home workers are more likely to be focused and productive if they have a chance to establish a clear idea of the people and company they're working for.
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Your health and safety obligations towards home workers
Key health and safety duties towards home workers - from risk assessments to ensuring equipment is suitable.
As an employer you have the same responsibilities for ensuring the health and safety of home workers as you would for staff based at your premises. Your duties are likely to include:
- carrying out a health and safety risk assessment - see managing the risks in your business
- purchasing compulsory employers' liability insurance if you don't already have it - see liability insurance
- ensuring equipment is fit for its purpose
- testing, certifying and maintaining electrical equipment provided by the business
- ensuring computers can be used comfortably and without disturbing glare, see how to ensure your employees are operating computers safely
- making sure lighting levels are appropriate
- avoiding trailing cables to reduce the risks of trips and falls
- ensuring staff are suitably trained to work safely
- keeping records of, and if necessary reporting, any serious accidents, illnesses, or injuries experienced by home workers
Remember, too, that employees who use computers regularly - including home workers - are entitled to an eye test paid for by their employer.
Home workers must take reasonable care of their health and safety, as well as that of other people such as family members, neighbours, and visitors. They must also ensure they use work equipment correctly.
During the coronavirus pandemic, it was unlikely that the employer would have been able to carry out the usual health and safety risk assessments at the employee's home. However, the employer should ensure that:
- the employee feels the work they're being asked to do at home can be done safely
- the employee has the right equipment to work safely
- the line manager maintains regular contact with the employee, including making sure they don't feel isolated
- reasonable adjustments are made for an employee who has a disability
The employee should also keep in regular contact with their line manager about health and safety risks and homeworking arrangements that need to change.
For information on your business's health and safety duties, see what you need to do about health and safety.
See the Health & Safety Executive (HSE) guidance on managing home workers' health and safety.
If you have employees who use their home as a base and generally don't work from your premises, you may have additional health and safety responsibilities to them. See how to ensure the safety of lone workers.
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How technology can facilitate working from home
Using IT to facilitate homeworking - phones, broadband, extranets, virtual private networks, and security issues.
You'll need to keep in touch with employees who work at home. At the very least, you should consider installing a dedicated work phone at the employee's home or provide them with a mobile phone.
This makes it easier to work out billing arrangements and, as you won't need to see the employee's phone bill, preserves their privacy.
Broadband internet connections have made emailing colleagues and business contacts and sharing documents quick and easy.
Virtual teamwork
With virtual teamworking, your employees do not need to be working in the same place, or even at the same time, in order to work together. Consider the following options:
Different time, different place
Employees work separately and keep in touch with you and each other via email.
Same time, different place
Employees can communicate with each other in real-time through telephone conference calls, video-conferencing, or using instant messaging.
Different time, same place
Employees can access your business network or databases by connecting to an intranet or extranet. A virtual private network is a more secure, but expensive, way of doing this.
Same time, same place
Even working from home, your employees will still need to meet face-to-face occasionally. Email and electronic diaries allow you to arrange meetings and transfer documents, while wireless technology allows you to meet anywhere.
Any time, any place
Mobile phones and laptop computers with wireless internet access mean that your employees are always accessible and can work wherever they are. Read more on mobile technology.
Data security
There are important security issues. For example, data security could be compromised if employees working from home use their work computers for personal purposes. It's best to provide staff with a computer and make it clear that it's for business use only.
Install anti-virus and firewall software on users' PCs and use passwords to control access to their computers and to your network. Make sure home workers have read and understood your IT policies and know their information security responsibilities.
Employees who deal with sensitive information should be particularly careful about:
- Keeping equipment at home - they should make sure that their premises are properly secured.
- Transporting equipment from one place to another - items should never be left unattended in a public place.
- Using public internet access - public computers can store information that has been entered.
- Working in a public place such as a train - information on a laptop screen could be seen by others.
- Destroying data that is no longer required - eg a cross-cut shredder should be used to dispose of sensitive papers.
Read NCSC's guidance on home working: preparing your organisation and staff.
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Responsibilities of home workers
Ensuring staff understand their duties to keep homeworking legal and safe.
Employees who work from home have a number of key responsibilities.
They should:
- check whether there are any restrictions on home working within the terms of their lease, mortgage, or tenancy agreement for the property
- keep their insurance company informed about the new use of their home
- check if planning permission will be required and apply for it if necessary, though this is unlikely to be the case for a home office
- check if business rates are payable on the part of the property used for work
- ensure their own health and safety and the safety of anyone visiting or living in their home who could be affected by their work
- ensure that they keep sensitive information safe and secure, eg by destroying data securely when they have finished with it
Employees should also be aware that if they set aside a room to work in that has no domestic purpose, they may be liable for business rates on that part of the property or capital gains tax if the property is sold.
Read more on how to use your home as a workplace.
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Hybrid working: employer guidance
How employers can get the most of staff using a mix of working at home or remotely and also in the workplace.
Hybrid working is a form of flexible working where staff spend part of their week working from home or remotely with the rest of their working time spent based in the workplace.
Employers can implement hybrid working for their organisation in different ways. For example, some employers might suggest that all staff come into the workplace two or three days a week and spend the other days working from home. These specific days could be set by the employer or left to individuals to determine themselves.
Benefits of hybrid working
Hybrid working can bring together the benefits that staff experience when working from home, such as fewer distractions and increased productivity, and combine these with the advantages of working in a shared location, such as feeling part of a team and collaborating with greater ease.
Advantages that hybrid working can bring include:
- more flexibility as you can develop hybrid working patterns that suit the needs of the business
- increased staff productivity and motivation
- higher levels of trust and engagement, especially if staff are involved in determining their own hybrid working patterns
- increased job satisfaction means you are more likely to retain staff
- attract new talent – many recruits now expect to be offered the opportunity to work from home in some capacity
- more opportunities for collaboration between teams on the days people are in the office together
- helps support inclusion and diversity
- better staff wellbeing with decreased feelings of isolation and improved mental health for staff with more opportunities for social interaction
- better connection between managers and staff as days in the office offer opportunities for face-to-face engagement
- improved work-life balance for staff
- savings on office space and facilities costs
- improved team availability with staff given the flexibility to connect remotely if they can't make a physical meeting
What to consider when introducing hybrid working
To get the maximum benefit from hybrid working, you should examine:
Organisation goals
Consider what your organisation’s objectives are and how hybrid working could support you in achieving your targets.
Customer needs
How are your customers’ needs met? Can their requirements be delivered online, or is there a need for physical interaction with customers?
Getting the best out of your staff
Determine the type of hybrid working model that will support staff wellbeing and give them the platform to be motivated and productive in their job. The use of SMART targets that are specific, measurable, achievable, realistic, and time-bound will give your staff a clear understanding of what is required of them. In addition, SMART targets enable managers to identify if employees are meeting their targets, and if not, identifying issues at an early stage to provide support staff may need to meet their targets including adjusting the number of days they work in the office, for example, if they need face-to-face support and encouragement. see set business performance targets.
Attracting and retaining staff
You should consider the type of hybrid working that can help you to attract new talent and retain existing staff. Most job applicants like the opportunity to choose to work from home, so offering this as a benefit can give you a competitive advantage in the job market.
Days in the office
Establish why staff are required in the office on certain days and think about what you hope to achieve then. Is it to increase teamwork or collaboration on projects? Is it to maximise staff wellbeing and morale?
Working hours
Can your business’s operating hours be more flexible? For example, if you have customers in global locations, the remote working element of hybrid working enables you to adapt working hours to benefit customers in different time zones. Being flexible also offers staff the opportunity to determine working hours that best fit their work-life balance.
Flexible working requests
Address your legal requirements, including managing formal requests from staff for hybrid working through a flexible working policy. Employees could also request hybrid working as a reasonable adjustment under disability discrimination legislation.
Data protection duties
Securing sensitive data can be more challenging when employees divide their work time between home and the office. Create a policy outlining how to manage data in the workplace, at home, and when commuting between the two. Provide training to all staff on their data protection responsibilities. Read the Information Commissioner’s Office guidance on data protection and working from home.
Health and safety responsibilities
Employers must ensure the health, safety, and wellbeing of their staff when working from home and in the workplace. Employers have a duty of care and must carry out a health and safety risk assessment for all staff.
IT requirements
You will need to ensure staff can access the technology required to work at home, remotely, and in the workplace with minimal technical issues. IT security will also be a priority, as staff will be connecting to your organisation’s systems remotely.
Tax issues
Make your staff aware that they may be able to claim relief for additional household costs if they have to work at home for all or part of the week. See claim tax relief for your job expenses if working from home.
How to introduce hybrid working
When introducing hybrid working, you should take on board the needs of your staff. Take time to engage with staff and their representatives to get their input and effectively communicate your plans with them at each step of the process. This approach will maximise staff buy-in and develop high levels of trust when introducing hybrid working.
Requiring all staff to come into the workplace on set days each week could be counterproductive if staff resent employers stipulating which days they have to be in the workplace. A fixed-day approach also restricts the flexibility that hybrid working offers employers and their workforce. Giving staff the autonomy to select how many days and on which days they come into the office passes responsibility to your workforce. This approach can gain employee buy-in and establish a platform for building trust. It also sets a better work-life balance that could help maximise staff motivation, loyalty, and productivity.
Hybrid working policy
Whichever way you introduce hybrid working, you should communicate your decision clearly to all staff with details on how it works from a practical point of view. For example, you may want to outline scenarios that may impact the hybrid working approach such as when leave such as holidays or sick leave is taken. Ensure you treat all staff fairly when implementing hybrid working. It is good practice to develop a hybrid working policy.
You should be aware that many staff have been working from home full-time for a period due to the coronavirus, so some staff may be anxious about returning to the workplace, if they haven't already done so. Support staff on the return to the workplace and offer training to help employees at all levels in the organisation get the most from hybrid working.
It is a good idea to trial hybrid working; review its progress after a certain period, and then, if required, make changes that will help you maximise the benefits it can bring to your organisation and your staff. Ensure you consult with your employees and their representatives if you make any changes.
Further guidance including a sample policy on hybrid working
You can read further guidance on introducing hybrid working and access a sample hybrid working policy in the Labour Relation Agency’s practical guide to hybrid working.
Read the Chartered Institute of Personnel and Development guidance on planning for hybrid working.
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Managing employees working from home: seven top tips
The following top tips highlight key issues you should be aware of if you are considering home working as a possibility for your business.
Allowing staff to work from home on either a full or part-time basis can bring a range of business benefits, including greater staff motivation and increased productivity.
The following top tips highlight key issues you should be aware of if you are considering home working as a possibility for your business.
1. Consider an employee's job and skills
When deciding whether to let an employee work from home, you should consider if the job is suited to home working. For example, telemarketing and writing could be particularly suited to home working. The employee is also likely to need skills in a number of key areas including communication and time management. See types of work and skills suited to home working.
2. Be aware of legal requirements
When an employee starts working from home, it may be necessary to amend their written statement of their terms and conditions of employment. See employment contracts and working from or at home. You will probably need to extend your business insurance to cover equipment used by employees in their homes. See providing equipment for employees who work at home.
3. Provide appropriate equipment
As an employer, you're likely to be responsible for providing, installing, and maintaining all equipment unless the employee uses their own. Equipment you need to provide may include a desk and chair, PC or laptop, and printer. See providing equipment for employees who work at home.
4. Encourage communication
For staff who work from home, a sense of isolation is one of the reasons that home working may fail. It's therefore important to put formal systems in place to ensure people feel part of the team. See effectively manage employees who work from home.
5. Train and monitor employees
Training can help employees working from home to develop the skills they need, for example, time management or writing reports. Monitoring employees' performance is also important to ensure targets are being met. See effectively manage employees who work from home.
6. Be aware of health and safety responsibilities
You have the same responsibilities for ensuring the health and safety of home workers as you would for staff based at your premises. Your duties are likely to include ensuring equipment is fit for purpose and that lighting levels are appropriate. See your health and safety obligations towards home workers.
7. Consider information security
You should ensure that employees adhere to data protection principles. For example, data security could be compromised if employees working from home use their work computers for personal purposes. You should make clear that the computer you provide is for business use only. You should also install anti-virus and firewall software, use passwords to control access to your network, and ensure workers have read your IT policies. See how technology can facilitate working from home.
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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:
-
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:
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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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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:
-
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:
-
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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Advantages and disadvantages of overtime
Overtime and employment contracts
Overtime payment rates, call-out payments, and employment contracts.
If you expect employees to work regular overtime, it's a good idea to state this clearly in the employment contract, together with:
- whether overtime is guaranteed or non-guaranteed
- whether overtime is compulsory or voluntary
- whether payment or time off in lieu (TOIL) is given
- rates of overtime pay/how TOIL is worked out
- when overtime becomes payable/when TOIL becomes applicable
- any notice arrangements for overtime working
- the authorisation process, eg overtime must be agreed in advance and in writing by the employee's manager
Overtime payment rates
Overtime rates are for you to agree with your employees. There are no minimum statutory levels, but rates may be fixed by an industry-wide agreement.
Overtime pay varies from business to business. Some of the more typical overtime rates are:
- weekdays and Saturday mornings - time-and-a-half
- Saturday afternoons, Sundays, and public holidays - double-time (Sunday shop workers may be an exception)
- Christmas Day and New Year's Eve - double-time and above
Overtime can also be paid at a basic rate.
When does overtime become payable?
It's important to define the point at which overtime becomes payable. Many employers expect employees to be reasonable in finishing a task without demanding overtime payment. This may be up to 15 minutes for manual workers or as long as an hour for supervisory or management posts. You will need to ensure that when pay is averaged out, the national minimum, at least, has been paid for each hour worked.
Other organisations vary premiums according to the length of time worked, eg time-and-a-third for the first two hours and time-and-a-half after that.
Call-out payments
Employees who are called out from home to perform urgent duties normally receive call-out allowances or guaranteed hours at overtime rates. As call-out is likely to occur at nights, weekends, or statutory holidays, it's usually paid at the relevant overtime rate.
Many organisations pay agreed travelling time as well as actual hours worked. Usually, employees are paid for being on standby ready to respond to any call outs. You may decide to pay at different rates for time on standby or pay a separate fixed allowance. See pay: employer obligations.
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Advantages and disadvantages of overtime
Advantages and disadvantages of using overtime such as a more flexible workforce.
Advantages of overtime
The potential advantages of using overtime working include:
- a more flexible workforce
- the ability to deal with bottlenecks, busy periods, cover of absences and staff shortages without the need to recruit extra staff
- increased earning for employees and mutual employer benefit
- avoidance of disruption to jobs where the workload is more difficult to share, eg transport and driving
- the ability to carry out repair and maintenance which has to be done outside normal working hours
Disadvantages of overtime
However, disadvantages of using overtime may include:
- the expense of premium overtime rates
- inefficiency if employee's pace of work, through poor management, is slack and it becomes necessary to compensate by providing overtime
- regular long working hours, which can adversely affect employees' work, health and home lives - read how to promote healthy work-life balance in your business
- fatigue, which may increase absence levels and lead to unsafe working practices
- employee expectations of overtime, leading to resentment and inflexibility if you try to withdraw it
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Overtime and part-time employees
Overview of how using part-time employees could reduce your dependency on overtime.
Use of part-time staff or other forms of flexible working could reduce your dependency on overtime.
Employers are free to make their own arrangements concerning overtime rates for part-time staff. You can insist that part-time workers work the normal full-time hours in your organisation at basic rates before being entitled to an overtime premium. Otherwise, they could earn more than their full-time counterparts. Full-time hours can vary in organisations eg the full-time hours in one organisation could be 37.5 hours and in another it could be 40 hours.
However, once a part-time worker has worked more than the normal full-time hours, you must pay them the same hourly rate of overtime as a comparable full-time worker. Employing part-time workers.
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Overtime and health and safety issues
Health and safety issues when managing overtime.
When allocating overtime, you need to be aware of health and safety considerations.
Health and safety considerations for overtime
Fatigue
Excessive overtime may make workers tired. They may then pose a risk to themselves or others, particularly if they are driving a vehicle or using dangerous or heavy machinery. Carry out risk assessments to ensure any dangers are identified and effectively managed.
Compliance with legal requirements
For example, maximum working week and night working limits are provided for by the Working Time Regulations (Northern Ireland) 2016.
Avoid allocating excessive overtime to shift workers
Particularly those working at night. Any health problems that may result from disturbance of the body's normal rhythms, for example, diabetes, will be made worse by fatigue. Read how you can promote healthy work-life balance in your business.
Avoid situations where employees work alone
This is particularly important in potentially hazardous environments such as factories or where employees are otherwise vulnerable. If working alone is the only solution, check that employees do not have any medical condition making it unsuitable for them to work alone, for example, epilepsy. You have a responsibility to provide a safe and healthy workplace. See how to ensure lone workers' safety.
You may also want to consider additional security for staff working late at night, eg improved car park lighting or safe transport home.
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Source URL
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Overtime and flexible working
How flexible working could provide a more cost-effective alternative to overtime.
Flexible working practices often provide cost-effective alternatives to overtime. These include shift work, annual hours, flexitime, seasonal and term-time working, and job sharing. Read more on flexible working: the law and best practice.
Recruitment options
Staff recruitment options include recruiting agency workers or recruiting seasonal staff. You may also want to contract work out by using contractors and subcontractors.
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Source URL
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Overtime and time off in lieu
Time off in lieu of overtime and how to avoid owing too much time at the end of the year.
An alternative to paying for overtime is to offer time off in lieu (TOIL). The practice is particularly common among higher-paid staff who work overtime.
Workers must agree to TOIL. They must also arrange to take it at a time that is convenient for the employer.
As with all forms of reward for overtime, TOIL needs careful management, and the ground rules should be set out clearly. One of the main problems with TOIL arrangements is the accumulation of owed time, which can amount to several weeks by the end of a year.
TOIL and employment contracts
This can be overcome with wording in the employment contract such as:
"No more than seven hours may be accumulated in any one month, and the time off must be taken in the following month. No entitlement can be carried forward without prior agreement. Any entitlement not taken will be lost."
In some businesses, time off is given in addition to overtime payment, especially for work on statutory holidays. You may also want to set out the minimum amount of time that can be recorded, eg 15 minutes. Again, the written terms and conditions or a company handbook should spell out what employees can expect.
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Using overtime successfully
Regulations on overtime and avoiding excessive overtime.
For many businesses, overtime is a useful way of dealing with fluctuations in demand or coping with production bottlenecks. However, where it is used excessively it can be an expensive and inefficient way of organising work.
Where needed, ensure there are managers or supervisors in place, for example, to make sure that health and safety regulations are being followed. See overtime and health and safety issues.
Working time regulations
- Limit maximum weekly working hours and set minimum daily and weekly rest periods. See hours, rest breaks, and the working week. If necessary, you can ask employees, but not young workers, to sign individual agreements opting out of some of the regulations. Do not pressure them to do so - they must willingly agree. Note that employees who opt-out will also have the right to opt back into the regulations after giving the notice contained in the individual agreement.
- Restrict night-work shifts to an average of eight hours daily, including overtime, and offer health assessments to night workers. See Sunday working and night working. You should note that where a night worker's shift involves special hazards or heavy physical or mental strain, there is an absolute limit of 8 hours on the worker's working time each day - this is not an average.
- Set minimum paid annual holidays - see know how much holiday to give to your staff.
Guarding against excessive overtime
To help guard against any excessive overtime, many employers:
- Monitor overtime levels to identify areas where it could be reduced.
- Watch out for instances where overtime working becomes regular and unvarying.
- Limit the overtime employees may work over a given period.
- Reduce basic working hours, eg from 40 to 38, and ensure that employees work the first two hours of overtime at a flat rate. Note that reducing hours may constitute a variation of a contractual term and would therefore require agreement.
- Enhance employees' annual earnings or basic hourly rate, or pay them a lump sum, to compensate for the loss of overtime.
If you're planning on reducing basic working hours, note that this may potentially constitute a variation of contractual hours and must be agreed upon with the employee.
The Labour Relations Agency (LRA) can advise on agreeing and changing contracts of employment.
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Overtime and holiday pay
How employers should treat overtime, commission, and bonus payments for holiday pay.
If your workers get overtime, commission, or bonuses you must include these payments in at least four weeks of their paid holiday.
The Working Time (Amendment) Regulations (Northern Ireland) 2023, which came into effect in January 2024, have brought significant changes regarding how overtime affects paid annual leave entitlement.
Under these amendments, all types of overtime - both compulsory and voluntary - must be included in the calculation of paid annual leave entitlement.
Key points of these amendments include:
- The inclusion of regular overtime when calculating an employee’s paid holiday entitlement. Therefore, if an employee regularly works overtime, their holiday pay should reflect their normal earnings, including the overtime pay.
- Holiday pay should be based on the employee’s "normal remuneration," which includes regular overtime, rather than just their basic salary. The reference period for calculating holiday pay is typically the 12 weeks leading up to the leave, although there may be variations depending on specific employment contracts or agreements.
- Employers need to adjust their payroll systems to ensure that holiday pay calculations include all regular overtime. Therefore, in order to comply with these regulations accurate records of overtime worked need to be maintained.
These changes apply to the four weeks of annual leave that are derived from the EU Working Time Directive. They do not necessarily apply to the additional 1.6 weeks of leave (statutory annual leave) provided by Northern Ireland law, although many employers apply a uniform approach to avoid administrative complexities.
In summary, under the new regulations, overtime, commission, and bonus payments must be factored into employees in Northern Ireland’s holiday pay calculations, ensuring that holiday pay reflects their normal earnings, including regular overtime payments. For further advice, you can contact the Labour Relations Agency (LRA) Workplace Information Service on Tel 03300 555 300.
Also on this siteContent category
Source URL
/content/overtime-and-holiday-pay
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Overtime and health and safety issues
Overtime and employment contracts
Overtime payment rates, call-out payments, and employment contracts.
If you expect employees to work regular overtime, it's a good idea to state this clearly in the employment contract, together with:
- whether overtime is guaranteed or non-guaranteed
- whether overtime is compulsory or voluntary
- whether payment or time off in lieu (TOIL) is given
- rates of overtime pay/how TOIL is worked out
- when overtime becomes payable/when TOIL becomes applicable
- any notice arrangements for overtime working
- the authorisation process, eg overtime must be agreed in advance and in writing by the employee's manager
Overtime payment rates
Overtime rates are for you to agree with your employees. There are no minimum statutory levels, but rates may be fixed by an industry-wide agreement.
Overtime pay varies from business to business. Some of the more typical overtime rates are:
- weekdays and Saturday mornings - time-and-a-half
- Saturday afternoons, Sundays, and public holidays - double-time (Sunday shop workers may be an exception)
- Christmas Day and New Year's Eve - double-time and above
Overtime can also be paid at a basic rate.
When does overtime become payable?
It's important to define the point at which overtime becomes payable. Many employers expect employees to be reasonable in finishing a task without demanding overtime payment. This may be up to 15 minutes for manual workers or as long as an hour for supervisory or management posts. You will need to ensure that when pay is averaged out, the national minimum, at least, has been paid for each hour worked.
Other organisations vary premiums according to the length of time worked, eg time-and-a-third for the first two hours and time-and-a-half after that.
Call-out payments
Employees who are called out from home to perform urgent duties normally receive call-out allowances or guaranteed hours at overtime rates. As call-out is likely to occur at nights, weekends, or statutory holidays, it's usually paid at the relevant overtime rate.
Many organisations pay agreed travelling time as well as actual hours worked. Usually, employees are paid for being on standby ready to respond to any call outs. You may decide to pay at different rates for time on standby or pay a separate fixed allowance. See pay: employer obligations.
Developed withActionsAlso on this siteContent category
Source URL
/content/overtime-and-employment-contracts
Links
Advantages and disadvantages of overtime
Advantages and disadvantages of using overtime such as a more flexible workforce.
Advantages of overtime
The potential advantages of using overtime working include:
- a more flexible workforce
- the ability to deal with bottlenecks, busy periods, cover of absences and staff shortages without the need to recruit extra staff
- increased earning for employees and mutual employer benefit
- avoidance of disruption to jobs where the workload is more difficult to share, eg transport and driving
- the ability to carry out repair and maintenance which has to be done outside normal working hours
Disadvantages of overtime
However, disadvantages of using overtime may include:
- the expense of premium overtime rates
- inefficiency if employee's pace of work, through poor management, is slack and it becomes necessary to compensate by providing overtime
- regular long working hours, which can adversely affect employees' work, health and home lives - read how to promote healthy work-life balance in your business
- fatigue, which may increase absence levels and lead to unsafe working practices
- employee expectations of overtime, leading to resentment and inflexibility if you try to withdraw it
Developed withActionsAlso on this siteContent category
Source URL
/content/advantages-and-disadvantages-overtime
Links
Overtime and part-time employees
Overview of how using part-time employees could reduce your dependency on overtime.
Use of part-time staff or other forms of flexible working could reduce your dependency on overtime.
Employers are free to make their own arrangements concerning overtime rates for part-time staff. You can insist that part-time workers work the normal full-time hours in your organisation at basic rates before being entitled to an overtime premium. Otherwise, they could earn more than their full-time counterparts. Full-time hours can vary in organisations eg the full-time hours in one organisation could be 37.5 hours and in another it could be 40 hours.
However, once a part-time worker has worked more than the normal full-time hours, you must pay them the same hourly rate of overtime as a comparable full-time worker. Employing part-time workers.
Developed withActionsAlso on this siteContent category
Source URL
/content/overtime-and-part-time-employees
Links
Overtime and health and safety issues
Health and safety issues when managing overtime.
When allocating overtime, you need to be aware of health and safety considerations.
Health and safety considerations for overtime
Fatigue
Excessive overtime may make workers tired. They may then pose a risk to themselves or others, particularly if they are driving a vehicle or using dangerous or heavy machinery. Carry out risk assessments to ensure any dangers are identified and effectively managed.
Compliance with legal requirements
For example, maximum working week and night working limits are provided for by the Working Time Regulations (Northern Ireland) 2016.
Avoid allocating excessive overtime to shift workers
Particularly those working at night. Any health problems that may result from disturbance of the body's normal rhythms, for example, diabetes, will be made worse by fatigue. Read how you can promote healthy work-life balance in your business.
Avoid situations where employees work alone
This is particularly important in potentially hazardous environments such as factories or where employees are otherwise vulnerable. If working alone is the only solution, check that employees do not have any medical condition making it unsuitable for them to work alone, for example, epilepsy. You have a responsibility to provide a safe and healthy workplace. See how to ensure lone workers' safety.
You may also want to consider additional security for staff working late at night, eg improved car park lighting or safe transport home.
Developed withActionsAlso on this siteContent category
Source URL
/content/overtime-and-health-and-safety-issues
Links
Overtime and flexible working
How flexible working could provide a more cost-effective alternative to overtime.
Flexible working practices often provide cost-effective alternatives to overtime. These include shift work, annual hours, flexitime, seasonal and term-time working, and job sharing. Read more on flexible working: the law and best practice.
Recruitment options
Staff recruitment options include recruiting agency workers or recruiting seasonal staff. You may also want to contract work out by using contractors and subcontractors.
Developed withAlso on this siteContent category
Source URL
/content/overtime-and-flexible-working
Links
Overtime and time off in lieu
Time off in lieu of overtime and how to avoid owing too much time at the end of the year.
An alternative to paying for overtime is to offer time off in lieu (TOIL). The practice is particularly common among higher-paid staff who work overtime.
Workers must agree to TOIL. They must also arrange to take it at a time that is convenient for the employer.
As with all forms of reward for overtime, TOIL needs careful management, and the ground rules should be set out clearly. One of the main problems with TOIL arrangements is the accumulation of owed time, which can amount to several weeks by the end of a year.
TOIL and employment contracts
This can be overcome with wording in the employment contract such as:
"No more than seven hours may be accumulated in any one month, and the time off must be taken in the following month. No entitlement can be carried forward without prior agreement. Any entitlement not taken will be lost."
In some businesses, time off is given in addition to overtime payment, especially for work on statutory holidays. You may also want to set out the minimum amount of time that can be recorded, eg 15 minutes. Again, the written terms and conditions or a company handbook should spell out what employees can expect.
Developed withAlso on this siteContent category
Source URL
/content/overtime-and-time-lieu
Links
Using overtime successfully
Regulations on overtime and avoiding excessive overtime.
For many businesses, overtime is a useful way of dealing with fluctuations in demand or coping with production bottlenecks. However, where it is used excessively it can be an expensive and inefficient way of organising work.
Where needed, ensure there are managers or supervisors in place, for example, to make sure that health and safety regulations are being followed. See overtime and health and safety issues.
Working time regulations
- Limit maximum weekly working hours and set minimum daily and weekly rest periods. See hours, rest breaks, and the working week. If necessary, you can ask employees, but not young workers, to sign individual agreements opting out of some of the regulations. Do not pressure them to do so - they must willingly agree. Note that employees who opt-out will also have the right to opt back into the regulations after giving the notice contained in the individual agreement.
- Restrict night-work shifts to an average of eight hours daily, including overtime, and offer health assessments to night workers. See Sunday working and night working. You should note that where a night worker's shift involves special hazards or heavy physical or mental strain, there is an absolute limit of 8 hours on the worker's working time each day - this is not an average.
- Set minimum paid annual holidays - see know how much holiday to give to your staff.
Guarding against excessive overtime
To help guard against any excessive overtime, many employers:
- Monitor overtime levels to identify areas where it could be reduced.
- Watch out for instances where overtime working becomes regular and unvarying.
- Limit the overtime employees may work over a given period.
- Reduce basic working hours, eg from 40 to 38, and ensure that employees work the first two hours of overtime at a flat rate. Note that reducing hours may constitute a variation of a contractual term and would therefore require agreement.
- Enhance employees' annual earnings or basic hourly rate, or pay them a lump sum, to compensate for the loss of overtime.
If you're planning on reducing basic working hours, note that this may potentially constitute a variation of contractual hours and must be agreed upon with the employee.
The Labour Relations Agency (LRA) can advise on agreeing and changing contracts of employment.
Developed withActionsAlso on this siteContent category
Source URL
/content/using-overtime-successfully
Links
Overtime and holiday pay
How employers should treat overtime, commission, and bonus payments for holiday pay.
If your workers get overtime, commission, or bonuses you must include these payments in at least four weeks of their paid holiday.
The Working Time (Amendment) Regulations (Northern Ireland) 2023, which came into effect in January 2024, have brought significant changes regarding how overtime affects paid annual leave entitlement.
Under these amendments, all types of overtime - both compulsory and voluntary - must be included in the calculation of paid annual leave entitlement.
Key points of these amendments include:
- The inclusion of regular overtime when calculating an employee’s paid holiday entitlement. Therefore, if an employee regularly works overtime, their holiday pay should reflect their normal earnings, including the overtime pay.
- Holiday pay should be based on the employee’s "normal remuneration," which includes regular overtime, rather than just their basic salary. The reference period for calculating holiday pay is typically the 12 weeks leading up to the leave, although there may be variations depending on specific employment contracts or agreements.
- Employers need to adjust their payroll systems to ensure that holiday pay calculations include all regular overtime. Therefore, in order to comply with these regulations accurate records of overtime worked need to be maintained.
These changes apply to the four weeks of annual leave that are derived from the EU Working Time Directive. They do not necessarily apply to the additional 1.6 weeks of leave (statutory annual leave) provided by Northern Ireland law, although many employers apply a uniform approach to avoid administrative complexities.
In summary, under the new regulations, overtime, commission, and bonus payments must be factored into employees in Northern Ireland’s holiday pay calculations, ensuring that holiday pay reflects their normal earnings, including regular overtime payments. For further advice, you can contact the Labour Relations Agency (LRA) Workplace Information Service on Tel 03300 555 300.
Also on this siteContent category
Source URL
/content/overtime-and-holiday-pay
Links
Overtime and employment contracts
Overtime and employment contracts
Overtime payment rates, call-out payments, and employment contracts.
If you expect employees to work regular overtime, it's a good idea to state this clearly in the employment contract, together with:
- whether overtime is guaranteed or non-guaranteed
- whether overtime is compulsory or voluntary
- whether payment or time off in lieu (TOIL) is given
- rates of overtime pay/how TOIL is worked out
- when overtime becomes payable/when TOIL becomes applicable
- any notice arrangements for overtime working
- the authorisation process, eg overtime must be agreed in advance and in writing by the employee's manager
Overtime payment rates
Overtime rates are for you to agree with your employees. There are no minimum statutory levels, but rates may be fixed by an industry-wide agreement.
Overtime pay varies from business to business. Some of the more typical overtime rates are:
- weekdays and Saturday mornings - time-and-a-half
- Saturday afternoons, Sundays, and public holidays - double-time (Sunday shop workers may be an exception)
- Christmas Day and New Year's Eve - double-time and above
Overtime can also be paid at a basic rate.
When does overtime become payable?
It's important to define the point at which overtime becomes payable. Many employers expect employees to be reasonable in finishing a task without demanding overtime payment. This may be up to 15 minutes for manual workers or as long as an hour for supervisory or management posts. You will need to ensure that when pay is averaged out, the national minimum, at least, has been paid for each hour worked.
Other organisations vary premiums according to the length of time worked, eg time-and-a-third for the first two hours and time-and-a-half after that.
Call-out payments
Employees who are called out from home to perform urgent duties normally receive call-out allowances or guaranteed hours at overtime rates. As call-out is likely to occur at nights, weekends, or statutory holidays, it's usually paid at the relevant overtime rate.
Many organisations pay agreed travelling time as well as actual hours worked. Usually, employees are paid for being on standby ready to respond to any call outs. You may decide to pay at different rates for time on standby or pay a separate fixed allowance. See pay: employer obligations.
Developed withActionsAlso on this siteContent category
Source URL
/content/overtime-and-employment-contracts
Links
Advantages and disadvantages of overtime
Advantages and disadvantages of using overtime such as a more flexible workforce.
Advantages of overtime
The potential advantages of using overtime working include:
- a more flexible workforce
- the ability to deal with bottlenecks, busy periods, cover of absences and staff shortages without the need to recruit extra staff
- increased earning for employees and mutual employer benefit
- avoidance of disruption to jobs where the workload is more difficult to share, eg transport and driving
- the ability to carry out repair and maintenance which has to be done outside normal working hours
Disadvantages of overtime
However, disadvantages of using overtime may include:
- the expense of premium overtime rates
- inefficiency if employee's pace of work, through poor management, is slack and it becomes necessary to compensate by providing overtime
- regular long working hours, which can adversely affect employees' work, health and home lives - read how to promote healthy work-life balance in your business
- fatigue, which may increase absence levels and lead to unsafe working practices
- employee expectations of overtime, leading to resentment and inflexibility if you try to withdraw it
Developed withActionsAlso on this siteContent category
Source URL
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Overtime and part-time employees
Overview of how using part-time employees could reduce your dependency on overtime.
Use of part-time staff or other forms of flexible working could reduce your dependency on overtime.
Employers are free to make their own arrangements concerning overtime rates for part-time staff. You can insist that part-time workers work the normal full-time hours in your organisation at basic rates before being entitled to an overtime premium. Otherwise, they could earn more than their full-time counterparts. Full-time hours can vary in organisations eg the full-time hours in one organisation could be 37.5 hours and in another it could be 40 hours.
However, once a part-time worker has worked more than the normal full-time hours, you must pay them the same hourly rate of overtime as a comparable full-time worker. Employing part-time workers.
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Overtime and health and safety issues
Health and safety issues when managing overtime.
When allocating overtime, you need to be aware of health and safety considerations.
Health and safety considerations for overtime
Fatigue
Excessive overtime may make workers tired. They may then pose a risk to themselves or others, particularly if they are driving a vehicle or using dangerous or heavy machinery. Carry out risk assessments to ensure any dangers are identified and effectively managed.
Compliance with legal requirements
For example, maximum working week and night working limits are provided for by the Working Time Regulations (Northern Ireland) 2016.
Avoid allocating excessive overtime to shift workers
Particularly those working at night. Any health problems that may result from disturbance of the body's normal rhythms, for example, diabetes, will be made worse by fatigue. Read how you can promote healthy work-life balance in your business.
Avoid situations where employees work alone
This is particularly important in potentially hazardous environments such as factories or where employees are otherwise vulnerable. If working alone is the only solution, check that employees do not have any medical condition making it unsuitable for them to work alone, for example, epilepsy. You have a responsibility to provide a safe and healthy workplace. See how to ensure lone workers' safety.
You may also want to consider additional security for staff working late at night, eg improved car park lighting or safe transport home.
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Overtime and flexible working
How flexible working could provide a more cost-effective alternative to overtime.
Flexible working practices often provide cost-effective alternatives to overtime. These include shift work, annual hours, flexitime, seasonal and term-time working, and job sharing. Read more on flexible working: the law and best practice.
Recruitment options
Staff recruitment options include recruiting agency workers or recruiting seasonal staff. You may also want to contract work out by using contractors and subcontractors.
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Overtime and time off in lieu
Time off in lieu of overtime and how to avoid owing too much time at the end of the year.
An alternative to paying for overtime is to offer time off in lieu (TOIL). The practice is particularly common among higher-paid staff who work overtime.
Workers must agree to TOIL. They must also arrange to take it at a time that is convenient for the employer.
As with all forms of reward for overtime, TOIL needs careful management, and the ground rules should be set out clearly. One of the main problems with TOIL arrangements is the accumulation of owed time, which can amount to several weeks by the end of a year.
TOIL and employment contracts
This can be overcome with wording in the employment contract such as:
"No more than seven hours may be accumulated in any one month, and the time off must be taken in the following month. No entitlement can be carried forward without prior agreement. Any entitlement not taken will be lost."
In some businesses, time off is given in addition to overtime payment, especially for work on statutory holidays. You may also want to set out the minimum amount of time that can be recorded, eg 15 minutes. Again, the written terms and conditions or a company handbook should spell out what employees can expect.
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Using overtime successfully
Regulations on overtime and avoiding excessive overtime.
For many businesses, overtime is a useful way of dealing with fluctuations in demand or coping with production bottlenecks. However, where it is used excessively it can be an expensive and inefficient way of organising work.
Where needed, ensure there are managers or supervisors in place, for example, to make sure that health and safety regulations are being followed. See overtime and health and safety issues.
Working time regulations
- Limit maximum weekly working hours and set minimum daily and weekly rest periods. See hours, rest breaks, and the working week. If necessary, you can ask employees, but not young workers, to sign individual agreements opting out of some of the regulations. Do not pressure them to do so - they must willingly agree. Note that employees who opt-out will also have the right to opt back into the regulations after giving the notice contained in the individual agreement.
- Restrict night-work shifts to an average of eight hours daily, including overtime, and offer health assessments to night workers. See Sunday working and night working. You should note that where a night worker's shift involves special hazards or heavy physical or mental strain, there is an absolute limit of 8 hours on the worker's working time each day - this is not an average.
- Set minimum paid annual holidays - see know how much holiday to give to your staff.
Guarding against excessive overtime
To help guard against any excessive overtime, many employers:
- Monitor overtime levels to identify areas where it could be reduced.
- Watch out for instances where overtime working becomes regular and unvarying.
- Limit the overtime employees may work over a given period.
- Reduce basic working hours, eg from 40 to 38, and ensure that employees work the first two hours of overtime at a flat rate. Note that reducing hours may constitute a variation of a contractual term and would therefore require agreement.
- Enhance employees' annual earnings or basic hourly rate, or pay them a lump sum, to compensate for the loss of overtime.
If you're planning on reducing basic working hours, note that this may potentially constitute a variation of contractual hours and must be agreed upon with the employee.
The Labour Relations Agency (LRA) can advise on agreeing and changing contracts of employment.
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Overtime and holiday pay
How employers should treat overtime, commission, and bonus payments for holiday pay.
If your workers get overtime, commission, or bonuses you must include these payments in at least four weeks of their paid holiday.
The Working Time (Amendment) Regulations (Northern Ireland) 2023, which came into effect in January 2024, have brought significant changes regarding how overtime affects paid annual leave entitlement.
Under these amendments, all types of overtime - both compulsory and voluntary - must be included in the calculation of paid annual leave entitlement.
Key points of these amendments include:
- The inclusion of regular overtime when calculating an employee’s paid holiday entitlement. Therefore, if an employee regularly works overtime, their holiday pay should reflect their normal earnings, including the overtime pay.
- Holiday pay should be based on the employee’s "normal remuneration," which includes regular overtime, rather than just their basic salary. The reference period for calculating holiday pay is typically the 12 weeks leading up to the leave, although there may be variations depending on specific employment contracts or agreements.
- Employers need to adjust their payroll systems to ensure that holiday pay calculations include all regular overtime. Therefore, in order to comply with these regulations accurate records of overtime worked need to be maintained.
These changes apply to the four weeks of annual leave that are derived from the EU Working Time Directive. They do not necessarily apply to the additional 1.6 weeks of leave (statutory annual leave) provided by Northern Ireland law, although many employers apply a uniform approach to avoid administrative complexities.
In summary, under the new regulations, overtime, commission, and bonus payments must be factored into employees in Northern Ireland’s holiday pay calculations, ensuring that holiday pay reflects their normal earnings, including regular overtime payments. For further advice, you can contact the Labour Relations Agency (LRA) Workplace Information Service on Tel 03300 555 300.
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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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