consultation

consultation

the process in which managers inform and seek the views of others before finally deciding what course of action to take. It may take place with interested parties outside the organization, for example local authorities, or with those inside. In INDUSTRIAL RELATIONS, joint consultation is where managers consult with employee representatives. It differs from COLLECTIVE BARGAINING in that managers do not usually seek formal agreement and in theory NEGOTIATION does not occur. Instead, representatives are there to listen to management plans and to express their views on them. However, since these views may be forcefully expressed and may be backed up by substantial power resources, managers may have to modify or even abandon their plans as a result. Thus the difference between consultation and collective bargaining may therefore be more apparent than real, and may hinge on the procedural distinction that disagreements during consultation cannot normally be carried forward to the next stage of a GRIEVANCE PROCEDURE.

Consultation may occur in a variety of bodies – joint consultative committee, works committee, etc. – and may involve workplace trade union representatives (SHOP STEWARDS) or representatives elected by all employees separately from union channels of representation. In the latter case, the consultative body is often known as the Works Council, after the German name for such institutions (see CO-DETERMINATION).

Traditionally, consultation has been viewed as dealing with minor welfare issues (‘tea ‘n toilets’) though major rationalizations can be the subject of consultation. However, it is a common complaint that employees are either not consulted at all over such important issues or else consultation is left to such a late stage that it is impossible to modify managerial plans. In recent years some companies, e.g. some of the Japanese firms in the UK, have extended consultation to cover issues relating to company strategy whilst legislation has stipulated that information should be disclosed to unions and their representatives relating to REDUNDANCY. Equally, there has been a shift in some organizations from formal joint consultation with employee representatives to direct COMMUNICATION with individual employees. Currently the EUROPEAN WORKS COUNCIL directive of the European Union is requiring that large European firms with plants in more than one member state establish works councils composed of employee representatives from all parts of the company for the purpose of consultation on key issues of company strategy. See DISCLOSURE OF INFORMATION, EMPLOYEE INVOLVEMENT, EMPLOYEE PARTICIPATION.

Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson