hrNETWORK Conference 2015Employment Law & Risk Management: You get the Employee Relations Culture you “Deserve”

David Morgan, Morag Hutchison & Jennifer Skeoch

14 May 2015

AberdeenEdinburghGlasgow

Employment Law & Culture

• Rights-based culture

• Employment law regulation

• High profile – employment law in the news

• No longer an ‘unmet legal need’

• YET, Employment tribunal claims have fallen dramatically

• Are employers ‘getting away’ with more than before?

• Flip-side is an increase in internal grievances...and a move to mediation

You get the employee relations cultureyou “deserve”

• Difficult decisions are more achievable in difficult times

• BUT, how you treat your people in the hard times sets the tone of your culture when the economy improves

• Attrition, grievances, trade union intervention, etc.

• To what extent is organisational culture and risk management linked to employment law?

Organisational Culture & “Values”

Organisational Culture & Risk

• “Employee relations” cases are increasingly about managing risk

• Employment law (regulation) underpins it, but the employer’s approach (culture) to risk sets the tone for the way forward

• The role of HR – moral compass?!

• It’s about more than just Policies and Procedures

Risk Management

Risk Factors

Culture & The Employee Side

• Put yourself in the other side’s shoes

• The psychology of the situation

• The employee’s perception, aversion to risk (culture) and approach to litigation will (also) inform the outcome

• Which option you follow will depend on how the employee might react and why...

Employee’s Hierarchy of Needs

Case Study 1 - Holiday Pay Dilemma

You are a newly appointed HR Director for a construction business. The company has just started to break even again after the downturn. On your first day you’re told the outgoing HRD conducted a risk assessment as a result of the new case law on holiday pay, which indicated a potential liability of £1,000,000 for back pay claims. This would, in financial terms, be fatal for the business. No grievances or claims have been raised, and the union (which has 60% membership for all non-management staff) don’t seem to have picked up on this yet. Your MD asks for your recommendation:1. Do you change the calculation method in the hope of time-barring the

historic claims?2. If so, do you tell the workforce and/or union?3. If so, what risks do you flag to the MD in terms of this approach?

Case Study 2 – A Question of “Establishment”

A high street retailer faces commercial pressure with the advent of competition from on-line retailers and changes in buyer habits. The company has 600 stores UK-wide and needs to close around 300 stores. Each is chosen either due to particular under-performance or the lease cycle shortly due to expire. The average shop employs just around 6 staff FTE. The total headcount ‘at risk’ of redundancy is around 1,000. The restructuring must be implemented ASAP as the company risks breaching banking covenants. The company recognises Unite, but the membership density is low in the shops. As HR Business Partner, you are asked to advise:-1. How long do you need to consult and with whom?

2. When can you start store closures and exiting staff?

3. How much is this all going to cost the company?

Case Study 3 – the underperforming employeeSimon is your IT Director and has been with you for 11 years. He is 53. His role was at risk of redundancy as part of a restructure occurring eight months previously. The IT Director’s role was not one of those selected to be made redundant but several of Simon’s team were made redundant. Simon earns £120,000 pa.Following the restructure, the demands on the IT department have increased and a lack of responsiveness from the IT team is having an impact on the organisation. A critical IT project designed to increase income is running 6 months behind schedule but Simon appears disinterested. When asked about the performance of the team, he blames the present situation on the restructure which he did not support. In the last six months Simon has been absent on seven occasions, for one day only. He has reported these absences as resulting from severe stress and anxiety. The CEO is extremely concerned about the situation and has suggested to you that the IT Manager, Judith, would be better placed to lead the team. You have told the CEO there are four options:(i)Do nothing and hope Simon resigns(ii)Have an “informal” discussion with Simon and if things don’t improve dismiss him(iii)Commence a performance management process with Simon and if things don’t improve dismiss him(iv)Have a “protected conversation” with Simon and enter into a Settlement Agreement

1.Which option are you going to go for and why?2.What do you estimate the cost of that option to be?

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