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)

Virgin on the Ridiculous

This tweet – and the responses to it – has been bouncing around my Twitter timeline over the last day or so. 

It’s been used as an example of the incompetence of management of railways in the UK; as a case for the renationalisation of the rail industry where profit isn’t the motive; and as a warning against privatisation in the NHS (where apparently Virgin are keen to become involved). Even a national newspaper weighed in

Sadly however, the real reasons why this problem occurred is more complex and mundane, and comes back to the Cinderella of HR, Employee Relations.

There are three factors at work here: Firstly, being a train driver is not an unskilled task that anyone off the street can do. So Virgin can’t just simply recruit to fill its staffing gaps without planning for the extensive training period required (nor, as a passenger, would I want any old individual sitting in the cab of a 140mph Pendolino as it hurtles along busy train routes). Nor are there vast numbers of qualified drivers sitting around twiddling their thumbs in the hope that someone from Virgin Trains will give them a call.

Secondly, train drivers hours are – again as a passenger, quite rightly – restricted, originally by the wonderfully named Hidden Regulations, with maximum length of shift and minimum rest periods, and now by agreement between management and unions in accordance with the Working Time Regulations.  So even if someone wanted to work overtime they might not be allowed to.

And finally, it’s because management and unions have – for many years, certainly back to the days of nationalised British Rail – have had agreements in place to allow drivers to supplement their income by working overtime on their rest days. Staffing rosters have been designed so that there is always overtime available. (I believe it dates back to the 1970s where people got around the Government-imposed pay restraint policies during a time of high inflation by ensuring that overtime would make up the difference – but if you know differently please let me know).

And most of the time, the system works well. Drivers are generally willing and able to work overtime and the train operators are happy to maintain good employee relations by ensuring it is available. Occasionally, as happened at the weekend, the system fails, but the industrial strife that would be caused by trying to ensure it never happened would be far more disruptive.

Frames of Reference (Part 2)

About 10 days ago, I posted a blog post which consisted of a series of images and the simple question: What do you see?

The reactions it gained, both in the comments and on social media, were interesting and varied – as I’d suspected, everyone saw the images in a slightly different way – some saw them individually, some saw them thematically, and the same picture could elicit different reactions.

The differences occur because we all perceive things based on our own knowledge, experiences and values – everyone has a different frame of reference. And these frames of reference transfer into the workplace as much as any other aspect of life.

Sociologist Alan Fox broke these workplace frames of reference down into 3 broad categories:

·         Unitarist – everyone in the organisation shares similar values and culture and they are all working to the same end

·         Pluralist    people have different aims and objectives, which may depend on where they are in the organisation and as a result organisations become a coalition of interests –  and these interests can and do sometimes conflict

·         Radical (or Marxist) – the groups in a workforce (which can crudely be split into ‘managers’ and ‘workers’) are inherently in conflict – if one gains the other loses.

For the last 30 years, the dominant viewpoint in HR and business has been the Unitarist one – whether it’s Tom Peters and his “excellent” companies, or HR concepts like ‘best practice’ and ‘employee engagement’. But is it time to reconsider the idea that “we’re all in it together”? The increasing numbers of industrial disputes – which I highlighted here – suggest that increasingly groups of employees are considering that their interests are better served by opposing the wishes of their managers. While the so-called Uber model of employment distances people from their organisation even further.

After all if we interpret 5 photographs differently, why on earth should we all interpret something as complex as a business in a unified and agreed way?

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!