Tag Archives: Employment Law

Human Resource Management & Covid-19: Some Uncomfortable Truths

Written by Mark Butterick

The statement ‘people are our greatest asset’ is widely used by many employers. For some this represents a genuine belief from the top of the organisation. For many others, however, this kind of rhetoric can feel like pseudo-socialist guff that actually has limited -if any- meaning.

The recent and ongoing Covid-19 crisis has inadvertently provided a unique opportunity to consider leadership behaviours and the effectiveness or otherwise of contemporary Human Resource Management (HRM) practices. Covid-19 has shined a bright light upon many organisations, their approaches to HRM best practice and whether employees really are treated by their employers as ‘the greatest asset’ that they are said to be.

Presenteeism & Succession Planning

london-downing-street-1452604-639x852-1

Let’s start at the top. As the UK Prime Minister stood applauding the NHS on the steps of 11 Downing Street on Thursday 2nd April he was clearly unwell. He had tested positive for Covid-19 on Friday 27th March but stubbornly continued to work rather than rest. By Sunday 5th April Mr Johnson had been admitted into hospital. By Monday 6th April he was in intensive care and clearly very ill. Throughout this period the Prime Minister was unwilling to relinquish power even when he should have been resting. For a time he even tried to conduct business as usual from his hospital bed. Was this exceptional “Churchillian” leadership deserving of admiration. Or did Mr Johnson provide a personal endorsement of the ‘working lots of hours shows greater commitment’ culture that plagues so many workplaces?

In addition there was no obvious deputy to assume Mr Johnson’s duties when he was no longer able to hold virtual court from his hospital bed. The UK was therefore left, for a while at least, in a highly precarious situation. The country faced the very real prospect of losing its Prime Minister during the most serious national crisis in 75 years. A situation that was greatly aggravated by the lack of a clearly defined number two to take over the reigns of power. The seriousness of all this was clear to many. Why was Mr Johnson unable to take a step back when he became so obviously unwell? And why did he not confirm who his second in command would be sooner?

Good leadership necessitates an understanding of a leader’s limitations. It also requires the leader to fully understand and accept these limitations. Good succession planning requires strength, depth and resilience at all levels of an organisational structure. In terms of these two key areas of HRM practice the UK government exposed itself and the country to a potentially catastrophic and entirely avoidable level of risk. The underlying reasons for this will no doubt be debated in the future. But a combination of bad decision making, poor HRM practice and ego clearly played their parts.

The Value of Work

In the social media age that we all now live, the value that society places upon work has become increasingly distorted. Covid-19 brought this distortion sharply into focus. The England footballer Harry Kane reportedly earns £200,000 a week. A Band 5 Staff Nurse on the other hand can currently earn £24,214 to £30,112 a year. At the higher end of this a Band 5 Staff Nurse therefore earns in a full year what Harry Kane earns in a day. By any reasonable measure this is absurd.

Some will rightly say that this is not an appropriate direct comparator and perhaps it isn’t. But the kudos rightly given to healthcare professionals during the Covid-19 crisis has challenged the value society places upon the work that people do. Not only in relation to healthcare workers either. The same also applies to those who empty our bins, postal workers and the often zero hour workers who deliver our parcels, groceries and takeaways amongst many others. It now seems clear -maybe even obvious- that the relentless race to the bottom in relation to labour costs and the widespread lack of value placed upon so many employees now requires urgent reconsideration. A recalibration exercise is long overdue. But whether this will deliver tangible holistic changes in the longer term remains to be seen.

Homeworking is not a Silver Bullet

Picture the scene. It’s Monday morning and you are sitting in your car on the motorway. Every other car has one other person in it and the traffic is barely moving. You know all the pinch points along your commute and the timing cycle of every set of traffic lights that slow your journey. Your heart rate increases continually as the time you start working approaches. You pray that a broken down car or an accident won’t block a carriageway and make you late. Then came Covid-19. The 09:00 meeting that the technology-averse (often older and male) senior managers in your organisation insist on having in person is now taking place online. Not by choice, but because it’s the only option now available. The meeting takes place. The same or similar outcomes are achieved.

night-traffic-1475539-639x425-1

Given this triumph of technology (all of which has been around for many years) will we now see significant amounts of work activity moving online? I doubt it. Whilst there is definitely a place, and indeed need, for more online working its limitations have been highlighted during the lockdown. Human beings are social creatures. We need to have human interaction. Softer interactions can be just as important -and sometimes more important- than hard outputs.

This said, with a fair wind, we now have an obvious opportunity to end the nine to five working day culture and foolish, counterproductive and polluting rush hour chaos this brings. All this can be achieved simply by using tried and tested technology more effectively. It has to happen. But the notion of the majority of workers simply getting up, working from home and then going back to bed before doing it all again is totally unrealistic. Many workers have always gone and always will have to go to “a place or places” to do “a thing or things”. No amount of technology will alter this significantly.

In addition, the goodwill currently being shown by many workers toward their employers has obvious limits. A limit that is fast approaching for some. Many workers are currently using their own equipment (PCs, internet connections, facilities etc). Employers will encounter significant challenges if they choose to migrate to a more home based operating model. Work/life balance considerations, training and development needs, setup costs, health and safety and data integrity are just a few HRM issues that require careful consideration. But there is clearly now an opportunity for more home working and there will be obvious productivity and environmental benefits that could and should flow from this.

Trust and Confidence

doughnut-1321120-639x612-1

In many organisations a doughnut model is operated by employers. A relatively small core of permanent employees at the centre of the doughnut is supplemented by an ever growing outer ring of contingent employees. An outer ring populated by temporary, contractor, freelancer and zero hour workers. After decades of outsourcing, subcontracting and the widespread peripheralisation of employment activity the so-called “gig economy” in the UK had grown to over 5 million by the time the Covid-19 pandemic began.

Anyone who works in the gig economy develops an inherent ability to pivot and change. They have to be resilient in what can be a Darwinian professional existence. Gig economy workers hope for the best but often expect the worst. This precarious world of insecure employment just got unimaginably worse due to Covid-19. With the likelihood of even peak and trough employment (often with many troughs and relatively few peaks) now snuffed out for many. When combined with other extraneous variables Covid-19 has effectively created a perfect storm for those working in the gig economy.

But what of the favoured few at the center of the organisational doughnut? Some of whom have often fought tooth and nail for permanent contracts of employment. Including the face fits yes men and women who don’t rock the boat and always claim to love their employers come-what-may. Has Covid-19 resulted in their employers repaying this loyalty and obedience? Apparently not.

A staggering 25% of employers plan to make permanent redundancies as a direct result of Covid-19. In addition almost half of companies plan to place employees in the “furlough” scheme. Many of these employees probably won’t return when the dust settles and normality eventually returns. Somewhat bizarrely the question of whether a company can use the furlough scheme to pay their employees isn’t means tested for employers. Unlike state benefits such as Universal Credit, which many employees -particularly those in the gig economy- are now finding at best unfathomable and, for many, inaccessible. For many employees falling out of what, until a few weeks ago, many may have considered to be “safe employment” the pace of recent events will come as a major shock. Attempts to access the benefits system will invariably prove to be emotionally damaging and exasperating. Many will question whether the system into which they have paid national insurance for many years is fit for purpose.

At the heart of a contract of employment is an implied obligation of mutual trust and confidence. As many of the projected 3.5 million employees currently heading toward Universal Credit are now finding out, however, millions of employers had neither the resilience nor a reciprocal commitment to them when the going got tough. For many employees the elastic band of trust and confidence was broken by their employers almost immediately when Covid-19 took hold.

Many employers have had no choice about this. But there will inevitably be employers who make tactical redundancies and adopt unethical HRM practices to deal with perceived problems and legacy issues. For some rogue employers the dark clouds of Covid-19 will have a silver lining. The impact of some employers adopting such approaches will be that the centre of some organisational doughnuts will become even smaller. The gig economy will get even bigger and levels of trust and confidence will inevitably deteriorate further. The low trust, low productivity puzzle that nobody seems willing or able to tackle will appear to be even more of an enigma.

Yesterday’s Greatest Asset?

OLYMPUS DIGITAL CAMERA

Dr. APJ Abdul Karam famously stated ‘love your job but not your company, because you may not know when your company stops loving you’. None of us could have accurately predicted the devastating impact of Covid-19. Or the speed at which this catastrophe has unfolded. But many thousands of employees are now indeed realising that the love of their employers suddenly ran out. The greatest asset, it transpires for many, is no longer in fact the greatest asset. Many workers will understandably -albeit belatedly- be asking if they ever were truly valued as their employers had previously claimed.

Major change is the only certainty that most workers now face. The ability or otherwise to adapt to the huge changes and disruption that lie ahead will have profound consequences for all. Two key choices now present themselves. An acceleration of the race to the bottom HRM practices of the past. Or a root and branch appraisal of and change to how we value and treat people. Nothing can ever be the same again though and those of us in the worldwide HR community will all hope that this proves to be for the right reasons.

Brexit and worker’s rights: should workers and trade unions be concerned?

DSC_4741

Dr Liz Oliver

Brexit creates uncertainty for important employment rights. Very many of the employment rights that have come to be expected as part of an employment relationship in the UK derive from EU law. Should the UK no longer be obliged to maintain these as part of its obligations under whatever relationship it has to the EU, then their future becomes much less certain. Could, on the other hand, Brexit create an opportunity for employment rights? An opportunity to re-think the way that employment law and other forms of regulation (such as collective bargaining) work together in a way that suits the economy in UK and responds to the national and global challenges that workers face? The answer to that question very much depends on the opportunity for an open and informed democratic debate. Whilst the Government is making assurances about protecting the workers’ rights, the mechanism by which it is doing this – ‘a Great Repeal Bill’ – potentially contains a back door through which such provisions could be readily amended or repealed without the full scrutiny of Parliament. Unfortunately therefore both workers and trade unions are right to be concerned.

What is at stake?

The impact of EU law on employment in the UK reaches far and wide, encompassing equality legislation; pregnancy; maternity and parental leave; paid holiday; employee rights in the context of insolvency; collective consultation in the context of redundancy to name but a few areas. Others have mapped this in great detail.

The impact of Brexit on this body of workers’ rights depends on two main contingencies;

  • the nature of the future relationship with the EU and
  • the political climate with regard to employment regulation at national level

It seems unlikely that the UK’s future relationship with the EU will entail obligations in the area of employment and other social law but much remains to be seen. As details of the Prime Minister’s negotiating strategy emerge in particular the intention to leave the single market and customs union and not to contemplate existing models such as ‘the Norway option’ which would entail continued membership of the European Economic Area. It becomes clearer that the overriding goal is for the UK’s future relationship with the EU to entail minimal to non-existent obligations. Nevertheless much remains to be seen. The Prime Minister’s speech and the subsequent white paper set out her unilateral intentions ahead of the negotiation with the other Member States of the EU. As such, it is aspirational and projects an intention for Theresa May to have her cake and eat it too. Any concessions around key objectives such as the “greatest possible access” to the single market and “tariff-free trade with Europe and cross-border trade there to be as frictionless as possible” will come with considerable strings attached.

In terms of the political climate with regard to employment regulation, the picture here is mixed. The current Government has not taken the overtly deregulatory stance of the Coalition Government or previous Conservative Government and the Prime Minister and her government have made assurances about protecting workers rights. Nevertheless concrete legal steps to ensure that current standards are maintained are lacking. Of particular significance is the distribution of power between the Executive (Government) and Parliament in decision making in the area of employment law. This important matter will shape extent to which matters of employment law will be opened up to democratic debate.

To what extent will worker’s rights be protected and maintained through the Brexit process and beyond?

The EU law that is relevant to employment takes different forms and takes effect at national level in different ways. Whilst some employment law derived from the EU can be found in Acts of Parliament (primary law) other provisions have been transposed using secondary legislation based on the European Communities Act 1972 and others still take effect automatically because they are directly applicable (The European Communities Act 1972 allows such provisions to have effect without further enactment).

Brexit poses two types of issues 1) technical issues about the form and function of different provisions and 2) issues of substance about what role employment law should take within the UK.  As the discussion below will show. The two issues interrelate.

Following the referendum result some called for a repeal of the European Communities Act 1972 (in order to ‘undo’ EU law), but it was clear that that position would be unworkable. The Prime Minister has instead announced a bridging mechanism in the form of a ‘Great Repeal Bill’ which will repeal the European Communities Act 1972 and transpose existing EU law into national law. The Government’s white paper on the UK’s exit from the EU contains assurances about worker’s rights:

“The Great Repeal Bill will maintain the protections and standards that benefit workers. Moreover, this Government has committed not only to safeguard the rights of workers set out in European legislation, but to enhance them”

On the one hand this looks like a sensible idea. It maintains legal certainly and potentially opens up a space to review what provisions to keep and whether or how to change or remove them. But an important question is who gets to make these decisions. Will it be Parliament or will it be the Government?

Constitutional lawyers have identified the proposed use of enabling provisions within Great Repeal Bill as a stumbling block to achieving enhanced Parliamentary sovereignty. The Department for Exiting the European Union’s announcement states “The Repeal Bill will include powers for ministers to make some changes by secondary legislation, giving the Government the flexibility to take account of the negotiations with the EU as they proceed.” Such enabling provisions may give ministers the power to amend or repeal former EU law based on the Great Repeal Act using ‘light touch’ secondary legislation. Of particular concern are so called ‘Henry VIII’ clauses which would allow for the repeal of primary law without further Parliamentary scrutiny, these could open up employment law that is already enacted by Acts of Parliament to amendment or repeal. It raises concerns that the ‘back door’ is left open for the Government to make significant changes to employment law without full debate or scrutiny. The scope and exercise of such powers will delineate the potential for Parliamentary (democratic) debate about what employment standards are expected by workers and employers within the UK.

The size and shape of the ‘back door’ is yet to be seen but talking about assurances that the Government has given on worker’s rights one legal expert notes

“There’s a definite “fox in charge of the henhouse” vibe here – quite literally so, if we remind ourselves of cabinet minister Liam Fox’s attitude to EU employment regulation”.

Workers and trade unions are right to be concerned and to seek legal mechanisms to guarantee employment rights.

Attempts to assure worker’s rights

Labour MP Melanie Onn introduced a private members Bill ‘The Workers’ Rights (Maintenance of EU Standards) Bill’ as an attempt to ensure that the current legal regime remains in place, however this was ‘talked out’ of Parliament on Friday (13th January).

Several amendments to the ‘Article 50 Bill’ (European Union (Notification of Withdrawal) Bill 2016-17) seeking to protect employment law were tabled. These took different forms, some sought to ensure  that the Prime Minister have regard to the public interest in existing social rights and others sought to ensure that current provisions are maintained and that Parliament has full scrutiny of any proposed changes to primary and secondary law. None of these amendments have held.

My view

Whilst some have argued that the removal of key employment protections that derive from EU law would be ‘politically unthinkable’ others argue that it would be ‘naïve’ to assume that any of the rights derived from EU law would be immune from repeal. It is my view is that a government with a deregulatory agenda can make important changes to employment law that are far reaching yet subtle, even where whole-sale deregulation would be politically unworkable (see previous blog post). The use of Henry VIII clauses within the proposed ‘Great Repeal Act’ could facilitate far-reaching changes without commensurate democratic debate. Employment law is complicated stuff, nothing short of a full and open democratic debate can support its appropriate reform. The Brexit domain is a million miles from this.