The Information and Consultation of Employees Regulations are designed to ensure employees in larger firms have the right to be informed and consulted about the business they work for.
It means businesses making major changes to their company car policies – for example, launching an employee ownership or cash for car scheme –would have to consult employees before making a decision.
Fleet management company Interleasing says the new regulations could lengthen the amount of time it takes to implement such changes.
Managing director Garry Hobson said: ‘The company car is an emotive issue where many people have opinions on everything from colour and individual specification to broader issues of risk management.
‘Policies could therefore be held up while managers sift the tactical from the strategic opinions before making their decisions.
‘However, fleet decision-makers should not be scared by this new piece of legislation but see it as an opportunity to review the way they communicate with employees.’
The regulations currently cover companies with more than 150 employees. From April 2007, it will cover companies with 100 or more employees and, from April 2008, those with 50 or more staff.
Martin Warren, employment partner at law firm Eversheds, said companies should not underestimate the importance of the new regulations.
He added: ‘Without doubt, many large organisations will already have sophisticated consultation procedures in place which are supported by the workforce.
‘However, these companies should not fall into the trap of believing that the new regulations will therefore have no effect – they will.
‘Employers who adopt a complacent attitude to the regulations could find themselves in the position of being caught out if something major happens to trigger a petition from 10% of the workforce, for example, if there was a significant restructure of a company car scheme.’
He suggests such a situation could lead to employees demanding more formal methods of consultation.