First EAT award for a failure to establish information and consultation arrangements

The Information and Consultation of Employees Regulations were introduced in 2005 and require employers of 100 or more employees (and will apply to undertakings of 50 or more employees from April 2008) to put in place arrangements to ensure that employees are informed and consulted on economic and employment related issues. The Central Arbitration Committee has the power to make a declaration that an employer has breached the Regulations. Following a CAC declaration the EAT can impose a financial penalty. For the first time since the introduction of the Regulations the EAT has exercised this power in imposing a £55,000 penalty on Macmillan Publishers for "a very grave breach affecting many employees".


In terms of the Regulations if a valid request is made by at least 10% of employees, an employer is obliged to initiate a negotiating process to establish information and consultation arrangements (such as works councils). If agreement is not reached within a prescribed period, the standard information and consultation provisions apply.

If there is a pre-existing (i.e. pre April 2005) consultation agreement covering the entire workforce and the request has been made by fewer than 40% of employees in the undertaking, the employer may hold a ballot. Unless the ballot shows that the majority of those voting and 40% of the employees in the undertaking endorse the employee request, the employer may continue to operate the pre-existing agreement.

The Macmillan case Macmillan Publishers failed to arrange a ballot to elect employee representatives following a valid employee request. Macmillan maintained that it had consultative committees of elected representatives in place. However, the CAC found that these did not constitute pre-existing arrangements. This was the third occasion on which Macmillan had been in breach of the Regulations.
The CAC made a declaration that Macmillan had failed to comply with the Regulations and ordered Macmillan to hold a ballot. Amicus then applied to the EAT requesting that a penalty award be issued. The EAT found that although it was not the most serious breach of the Regulations which might be envisaged it was "nonetheless a very grave breach affecting many employees". A penalty of £55,000 was awarded. The EAT considered the following in assessing the penalty:

  • it was a significant failure because it must have been plain to the employer that the relevant provisions were being ignored at almost every stage
  • the employer provided a "fudged" response to the CAC when it asked for detailed information
  • the breach was compounded by the fact that there had been earlier occasions when the employer had been in breach of the Regulations by failing to provide information: it was, therefore, not a technical or inadvertent breach (particularly as legal advice had been sought)
  • the CAC's declaration was made on 16 February and all the employer had done since then was to hold a meeting with the union on 5 May and indicate that it wished a further meeting in August: this delay was an "aggravation of the breach"
  • no adequate reasons had been given by the employer for failing to comply with its obligations
  • the consultation arrangements would cover over 1350 employees
  • it was felt to be appropriate when fixing the penalty to stipulate a sum which would deter other employers from adopting a "wholly cavalier attitude to their obligations"

Amicus v Macmillan Publishers Ltd UKEAT/0185/07/RN