No Deal – no pay?

The Government’s recent decision to publish a series of papers outlining what organisations should do in the event of a “no deal” Brexit has attracted a good deal of publicity and comment. But one that didn’t get much media attention was on “Workplace rights”.

The reason it didn’t is that there will be almost no change to employment law as a result of the UK leaving the European Union. Existing EU laws and regulations are now all incorporated into UK law (if they weren’t already) as a result of the EU Withdrawal Act 2018.

The only two slight changes – which will only affect a very small number of employers and employees – are that if there is no deal, UK based workers will no longer have the right to request that their employer sets up a European Works Council (something which only applies if the employer operates in two or more EU countries); and that UK employees who work in an EU country will no longer be protected by the EU’s Insolvency Directive if their employer becomes insolvent.

However, one area of employment law that may become important in the event of “No Deal” – particularly if there are problems in certain sectors – is the right to lay off staff temporarily. As an employer, you can request staff not to attend work at any point, but you can only do so without paying them* if you have an explicit clause in your employment contract.

Only a minority of companies include such a clause these days, since they are rarely if ever needed, and also because those that do have fluctuating demands tend to use “zero hour” contracts or other types of contingent arrangement.

But consider this scenario. Your company makes machines. Currently, you use widgets manufactured in Germany and imported by truck. In the event of a No Deal Brexit, widget imports are delayed, perhaps for a matter of weeks, while new customs arrangements are resolved. You’ve got nothing for your workforce to do but without a lay off clause you’ll need to continue paying them. Could your business survive?

So, you may want to change your employment contracts to incorporate an appropriately worded clause – contact us if you wish to do this.

But before you do, think about these three points

  • Changing contracts – even by agreement – is a time-consuming process.
  • If some or all of your staff won’t accept the change, do you really want to go through the whole process of dismissing them and re-engaging them for something that might not happen?
  • Even if staff do accept the change, it’s likely to affect their morale and commitment. Do the benefits of a lay-off clause outweigh the possible loss of productivity, increased absence or higher turnover?

The right to impose an unpaid lay-off may be a necessary step for your business – but think about it holistically, not simply financially.

(*you may have to pay a small “guarantee payment” for the first 5 days of any lay-off period)

Strikes, Strictly and Brexit

I heard an interesting theory put forward recently (by comedian Frank Skinner) that Strictly Come Dancing led to Brexit. In the 2008 series, journalist John Sergeant was possibly the most hopeless contestant to ever appear on the programme. However despite the  frequent condemnation of the dance judges, the public voted week after week to keep him in the show. Skinner suggested that it was perhaps the moment that people realised they could ignore “experts” and get the result they wanted through voting in sufficient numbers.

In common with every other area of business, HR professionals are currently grappling with the implications of Brexit. Much of the debate surrounds employment law (will it change or not, and if so how?), recruitment (what will be the rules on recruiting EU nationals, will they be required to have work permits), and skill shortages (will we still be able to employ existing EU staff, and if not how will we fill the skills gap?).

However, one overlooked area is that of Employee Relations. We’re currently seeing a wave of industrial disputes – railways, airline staff, Post Office workers, airport baggage handlers, Weetabix factory workers. While some suggest this is some wave of 1970s style union militancy, the fact is that the majority of these disputes are over ‘old-fashioned’ pay and conditions matters, and they are overwhelming supported by affected staff in secret ballots. Perhaps the Brexit vote has convinced ‘ordinary workers’ that they can change things by voting?

What it has also revealed is the poor approach of management in most of these situations. It may be arrogance – a belief that management proposals can always be implemented because the employer wants to, irrespective of the views of employees. Or it could be a refusal to believe that people will do something so ‘stupid’  – they won’t vote to strike and lose pay before Christmas (just like they won’t vote to leave the EU or for a dancer as poor as John Sergeant). Mostly however I suspect it’s a lack of competence – managers, including many in HR, just don’t know how to negotiate on a collective basis. It’s interesting that several of the disputes have been quickly solved when expert negotiators from ACAS have become involved.

So perhaps that’s another Brexit issue for HR people – the need to brush up on, or even gain in the first place, the knowledge and skills to manage employee relations. As someone who cut their HR teeth in this area, I’m looking forward to some full and frank discussions with trade union colleagues in the coming months and years!

Anger, Brexit and Moving Forward

I was reluctant to write a post about last week’s EU referendum. Enough keyboard warriors have already given their reactions, opinions and solutions. But a couple of recent posts and comments from HR people have changed my mind.

First, let me state that, as a Remain voter, I’ve been through anger, disbelief, shock and all the other emotions that many others (like this, this and this) have also experienced.  It’s small consolation to live in a city which voted overwhelmingly to remain and where I’ve yet to meet anyone who’s anything other than horrified by the result and its implications for them and their children.

But what I will not do is get involved in a blame game. People who voted Leave did so for a variety of individual reasons – some will have had well thought out principled arguments, some were out and out racists, some had a rose-tinted and nostalgic view of England in the 1950s and some were just conned by the duplicitous snake-oil salesmen leading the Leave campaign.  To start trying to demonise the old, or working class people from the de-industrialised north, or those who live in rural areas, or those without a degree, for the way they voted is neither constructive not helpful. Indeed, the demonising of certain groups, particularly by politicians (and I don’t just mean UKIP) is the sort of tactic that has led us to the present situation.

We talk in HR a lot about “engagement” – an ill-defined concept which provokes a range of reactions from evangelism to cynicism. But I remember in one discussion a colleague saying “I can’t really describe what an engaged employee looks like – but I certainly know what a disengaged one is”. What we saw last week was the result of a disengaged population who wanted to kick back against something. As an old boss of mine used to say when discussing union negotiations, “when you’re in a lose/lose situation, do what you want to do”. And that’s what they appear to have done.

The UK seems to be in a collective Kubler-Ross curve at the moment. But the only way we will move forward to is get past the denial and anger stages and start to make the best of our new circumstances.  And maybe that means applying some of the ideas we use to try to improve employee engagement on a wider basis.