The first post outlined the reasons for proactively establishing an ICF and also described the benefits that can flow from having an ICF in the workplace. The second post discussed how to set up a robust ICF that is fit for purpose.
The ideal would be for ICFs to operate smoothly and effectively – without the workplace becoming adversarial. However, there are potential risks.
One such potential source of contention is if the workplace is unionised – as illustrated by the framing of the legislation giving effect to the EU directive. Though the existence of ICFs flows largely from an EU directive, the different member states of the EU were allowed a degree of autonomy in how ICFs were to be established. In Ireland, this autonomy led to heated disagreements between employers and unions. When the legislation to implement the EU directive was first published in 2005, there were widely differing reactions from trade unions and employer groups. Trade unions had wanted an “opt-out” position – whereby employees would have a guaranteed right to consultation unless the employees declined. The final legislation instead went with an “opt-in” provision – where employees would need to request the establishment of an ICF. This was a serious bone of contention at the time – and this contention is described in some detail in this paper from Eurofound – an EU Agency.
So handling this new framework in a workplace where there is union recognition was contentious from the beginning. This is well illustrated by what happened in the HSE. In 2007 the HSE was implementing a recruitment freeze and other cutbacks. It informed the unions of this. The unions however claimed that they were entitled to more than simply being informed. They claimed that they were entitled to be consulted with.
The HSE did not dispute that they had not entered into consultation. But they claimed that they were not obliged to (enter into consultation).
The parties were unable to resolve the dispute locally. Neither did it prove possible to reach agreement at the Labour Relations Commission. Correspondingly, the dispute was referred to the Labour Court which issued its ruling in early 2008.
The Court concluded that, because of the “significant effect on staff“, the HSE should have consulted with the unions. The Court concluded that “the unions’ complaint is well-founded and that the HSE contravened the Agreement by its failure to inform and consult with the Unions in advance on its breakeven initiative”. With this ruling the HSE became the first Irish employer to fall foul of the 2006 legislation (revised in 2013).
The Court did accept though that “the obligation to consult does not provide the parties to be consulted with a right of veto. Nor should it be seen as inhibiting the right or duty of management to take appropriate action to deal with changing circumstances”. In addition, the actual sanction perhaps a relatively mild rebuke. The Court issued just one recommendation – that the HSE should “assure the Unions that should the need for a similar initiative arise in the future full and adequate consultation will take place”.
This ruling presents both good and challenging news for employers. It is good that the Labour Court accepted that employees cannot veto initiatives. It is also good that the Court recognised the right of employers to manage. However, the ruling is also challenging as employers may well find it difficult to determine what proposed initiatives oblige them to consult with employee representatives. There is a balance to be struck – employers would be paralysed by consulting on all initiatives. But they would also be risking sanction by failing to consult sufficiently. It is a grey area.
Another case worth looking at involved Nortel and its ICF. At issue was the ICF’s claim that the company had failed to adequately fund the ICF – failing to provide it with the “financial resources that are both necessary and reasonable to enable it to perform its duties in an appropriate manner as is provide [sic] for under the legislation”.
At first glance it could look like the employer was badly at fault. However, there was a unique set of circumstances. The ICF had been set up in 2008. Nortel then sold part of its business to another company. Then Nortel became insolvent. And some Nortel employees had been transferred to that other company.
The ICF referred its case to the Labour Court in 2009. (The legislation allows for cases to be referred to the Labour Court in the case of certain disputes.) The case was heard in 2010. The ICF was looking for funding “to meet certain costs incurred in obtaining legal advice on employment related issues. The Employer refused to provide such funding”. Nortel accepted that it was obliged to fund the ICF “to enable them to perform their duties in an appropriate manner”. However Nortel disputed that this obligation extended to covering legal costs.
The ICF, though claiming that the case was “not simply for the reimbursement of legal costs”, failed in the Court’s view to mention any other reasons. The Court also said that the legal costs could have been avoided because “the information which they required could have readily been obtained elsewhere, including from State Agencies”.
Correspondingly, the Court recommended that Nortel was not obliged to fund the ICF’s legal costs. Note though that it remains unknown what the Court’s ruling would have been if it had concluded that the information being sought by the ICF had not been readily available without the need to incur legal costs! Effectively, the case, like the HSE case, again leaves a grey area.
It should be pointed out though that the HSE and Nortel cases are noteworthy for another reason. They are isolated! Most ICFs do run smoothly and effectively in many workplaces. And a significant reason why is because of what employers do fund. The Court may have ruled that Nortel was not required to fund legal costs. But employers are still required to fund the basic operations of ICFs. For many employers this includes financing the cost of having their employee representatives trained in such areas as employment legislation, engaging positively and proactively with management, and effectively marketing the ICF to their colleagues.
The need for such training and the grey areas remaining after the HSE and Nortel cases illustrate that this is a complex area and it is important to get skilled advice if considering the setting up of an ICF – be that as a result of an employer initiative or in reaction to a request from employees.
To get expert guidance in the area, call Mary Cullen, Patrick Foley or Liam Barton on 056 770 1060 or email firstname.lastname@example.org.