1.1 Internal and external factors that influence employee relations
Following the numerous studies and researches around the employee relations like the CIPD Change agenda (2005) , there is still no set definition for Employee Relations.
But the majority of views agree that Employee Relations is concerned with “managing the employment contract and relationships; communication with employees; promoting retention, involvement and engagement; collective processes of negotiation and consultation.”(1)
In a nutshell, Employee Relations is focusing in preventing and managing issues that arise in the work place.
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The organisational culture plays an important role on how employees perform their duties, on how they interact with customers, suppliers, and management and team colleagues. Regardless of the type of organisational culture, it is important that employee beliefs and values to be aligned with the business objective in order to avoid arising conflicts and maintain increased productivity.
For example if an employee or more do not believe in the company ethos and they only come to work for financial gaining’s, it is very likely that they will not perform to highest standards, their level of morale will be low and conflicts will arise.
As it is down to the managers to ensure that task are completed effectively, it is very important that the management style it is aligned to the company culture, in order to ensure a positive working environment.
The economy is another factor that has a huge impact on the employee relations. For example if the economic climate is going through a down fall, the unemployment level will rise, which can create fear and anxiety among employees for losing their jobs. The anxiety will lead to lower performance level, therefore decreasing the productivity level.
Or the salary level can freeze or be decreased, for financial reasons, which again will have a direct impact on the employee morale and performance.
For example the majority of Investment Banks , have proceed with a 10% rate cut for all external contractors, in December 2014 , for unlimited period of time, due economic reasons. That led to 10% of the external population resigning and conflicts arising between permanent members of staff and external contractors.
‘”Committed, visible and involved senior leaders who communicate frequently and believably on a range of business and organisational issues”,(2) it is core component in ensuring workforce engagement, as it was shown by a survey run by Tower Perrin.
This emphasizes the huge change that has taken place, in the way communication should be done, in order to get the desired results. If in the past the manager role was to give directive on how and what things needed to be done, nowadays it is imperative to have a two-way process communication. Delivering a message, it has no impact on the audience, if this is not fully understood and agreed. Therefore it is important that managers have a collaborative communication process and empower their employees. If employees feel that they are part of the decision and they agree on the impact of the decision will have on their roles, the chances of them getting fully committed of delivering are very high, as they will feel valued and that will led to increased performance.
Technology is evolving very rapidly and majority of companies, tend to lean more towards adopting new technological systems to reduce cost and increase profits.
The impact of technology on employee relations can be negative at times.
An example is Santander Bank, who announced to close down 139 branches in the next 6 months, replacing the face to face services, with online banking access and telephone banking. This decision not only affected customers, but employees as well, as this will result in over 1000 employees losing their jobs.
Also the implementation of new technological system can create conflicts and demonization among employees, if it is not managed properly and if full support and training is not offered, in order to accommodate the change taking place.
1.2Types of employment status
When it comes to employment status, it is very important to determine the type of employment, in order to identify the employee rights and employer responsibilities, as these vary. The employment contract is it an agreement between employee and employer, that outlines the responsibilities, rights, duties and working conditions.
There are three main employment status types:
1. Employee- is any person that works under a contract of employment, whether it is in writing or not.
2. Workers-even though from a legal point of view the term worker includes employees as well, it used to refer to individuals who offer services or perform work under a contract for a reward (i.e money, benefits) , aren’t doing work as part of their limited company and may have limited rights to send somebody else to do the work. Workers have same rights as employees, excluding the following: minimum notice period, protection against unfair dismissal, right to request flexible working, statutory redundancy pay and time off for emergencies
3. Self-employed – is an individual who run his own business, managing costs, supplying materials and tools for the completion of the job .They responsible for paying their own taxes and National contributions, can decide when and how the work needs to be done and can hire someone else to do the work.
Permanent employees have the responsibility to:
work all hours agreed, unless they are on leave
cannot send somebody else to do their work
must work under management supervision at all times following guidelines on how work should carried out and to set time scales
work at the business’s premises or at an address specified by the business
carry out task with equipment and tools provided by the employer
follow the disciplinary an grievances procedures set by the company
all their income Tax and National Contribution are deducted from their salary ,by the employer
When it comes to rights, employees have the following rights according to law, some being subject to a specific period of continuous employment (3):
Statutory Sick Pay
Entitled to minim National Wage
Are protected against unlawful deduction from their pay
Statutory minimum length of rest breaks
Not work more than 48 hours per week, unless they choose to opt out of this right
Protection against discrimination and for whistleblowing
Maternity, paternity and adoption leave and pay
Minimum notice period , if their contract will be terminated by the employer
Protection against unfair dismissal
The right to request flexible hours
Time off for emergencies
Statutory Redundancy Pay
The right to be TUPED, etc
Temporary term is used for pat-time employees, casual workers, agency staff that do a job for a specific number of days, weeks or months.(4)
.In the case of agency workers they have an employment contract or an agreement with the agency and not the end user (the company they are placed with).
Before 12 weeks of continuous service their rights are quite limited compared with permanent employees, but they are entitled to collective facilities and have access to job vacancies, same as permanent members of staff.
After 12 weeks of service they have the same right as permanent employees, except the right to redundancy or to claim unfair dismissal.
Fixed-term contractors are employed by the company, not through an agency , but their employment contract has got an end date.
In term of their right, they have the same rights as permanent employees, except the right to redundancy pay , before 2 years of continuous service.
If their contract is not renewed, the employer does not need to give any notice and it is considered as a dismissal. But in the case where the employer desires to end the contract before the end, than a notice period should be served and a fair reason why this has happened.
After 4 years of continuous service , the fixed-term contractor will automatically become a permanent employee, unless there is a good business rationale , why this should not happen.(5)
1.3 The importance of employment status
As mentioned above establishing the employment status it is important in order to identify the rights and responsibilities of the employee and to comply with the relevant legislation that regulates that particular employment status.
For example the Agency Workers Regulations 2010, only applies to agency workers that are placed on a temporary basis and to the ones that have an indefinite period of time. An example of the case in Moran and others v Ideal Cleaning Services Ltd.(6)
When it comes to self-employed status, it is very important to establish this status , as they are not cover by the employment law , therefore cannot make claims in an Employment Tribunal. But they are protected against Health and Safety regulations.
2.1The importance of work life balance and legislation that influence it
The work-life balances it important not only to meet the legal requirements, but also it benefits the employers and employees. For example the companies that have well established policies around work-life balance, have a higher productivity, reduced absenteeism, increased flexibility and customer service, due to raised morale, motivation commitment and engagement from their employees.
The working hours, holiday entitlement, rest breaks and night working rights , are regulated by the Working Time Regulation 1998 and Eu Working directive. This regulation was set out to protect employees and employers , by avoiding accidents, unauthorized absenteeism, employees getting exhausted, etc.
According to the Working time Regulation 1998, employees are entitled to:
– work maximum 48 hours per week, unless they opt out.
– minimum of 5.6 weeks paid leave a year , which should not be more that 28 days
When it comes to night workers , the Working Time Regulation, stipulates that they should not “exceed an average of eight hours in each 24 hour period, averaged over 17 weeks”
Opposed to day time workers, the night workers do not have the option to opt out.
Rest Breaks are also regulated by the Working Time Regulation and it states that workers are entitled to a minimum 20 min. Rest break in each shift, lasting more than six hours and11 hours of consecutive rest between shifts each day.(7)
2.2Legal support for employees as a family member
There different legislation acts the protect and offer support to family members such as:
-The Maternity and Parental Leave Regulations 1999(8)
– Employment Rights Act 1996;
– The Maternity and Adoption Leave (Curtailment of Statutory Rights to Leave) Regulations 2014 (9)
-The Equality Act 2010
-The Shared Parental Leave Regulations 2014
According to the Maternity and Parental Leave Regulation, most pregnant women are entitled to statutory maternity leave up to 52 weeks, are entitled to SMP(statutory maternity pay), have the right to return to the same job, on the same terms and conditions. In regards to new fathers, they are entitled to one or two weeks of paternity leave and statutory paternity pay,as long as they have worked for a longer period of time.
In case of adoption , both parents can claim time off, but only one of them can claim Adoption leave and the other one can claim maternity or paternity leave.
The Shared Parental Leave Regulation 2014, will come into force in 2015 and give the option parents to share the parental leaves in three block.(10)
Dependants are classed those who leave in the same household as family member. In case of emergencies, employees have the right to request time off , to care for dependants.
The employer might choose to pay for the time off, but they are not obliged to do so. (11,12)
2.3The importance of equality pay
According to the Equality Act 2010, man and women doing the same work should have equal working terms such as basic pay, overtime rates, performance related benefits, hours of work, access to pension schemes, annual leave entitlement.(13)
Even though the Equality Act 2010 does not cover the discretionary benefits, such as offering child care assistance to women only, these are covered by the Sex discrimination Act 1975.
Offering equal pay and treating fairly all employees, has various benfits such as: helps building stronger relationships between the employer and employees, based on trust; it help avoid rising conflicts between team members, due preferential treatment, etc.
Also following the recommendations in the “Code of Practice” by the Equality Act 2010 and the Human Rights, to employers to conduct an equal pay review, the reduction in tribunal claims has seen a reduction.
2.4Legislation that protects against discrimination
According to the Equality Act 2010, which replaced the Sex Discrimination Act, Race Relations Act and other legislation relating to discrimination, there are nine protected characteristics, on which discrimination can be unlawful and these are:
Religion or belief
Marriage and civil partnership
Pregnancy and maternity
Discrimination can be :
-Direct- when a person is treated differently and worse because of one of the protected characteristics (14)
i.e If a less experienced man is offered a job , over a most experienced women
-Indirect- where there are practices and rules that apply to everyone, but the effect of these can be different for particular employees.(15)
i.e. If there is a clause in the contract stating occasional overtime required, that can be an indirect discrimination towards women who are usually carer for their children.
-Harassment-:”unwanted conduct related to relevant protected characteristics, which has the purpose or effect of violating an individual’s dignity or creating an intimidating , hostile degrading, humiliating or offensive environment for that individual” (16).
i.e Ana is repeatedly not offered the opportunity to get involved in new projects , by her line manager on the basis that she is too young and inexperienced. Ana can claim harassment against her line manager based on age discrimination.
-Victimisation- happens when an employee is badly treated , after making a claim of discrimination or is suspected to do so.
i.e Chris has made a formal complaint against his manager , because he feel he is discriminated against based on race. Although this is complaint in progress, he is constantly picked on by his manager, therefore Chris could claim victimisation.
2.5Good practice around organisational policies and psychological contract
The Psychological contract it is unwritten and it represents the mutual agreement between two parties in managing mutual expectations.
For example in our company even though we are contracted to work until 6p.m on a daily basis , in December our managing Director has offered us the opportunity to leave at 5.30 , as long as the daily tasks are completed . So the our expectation of leaving early was meet and by us ensuring that all tasks were completed , we ensured our Director expectations were meet. Therefore there was a psychological contract between us.
Even though the psychological contract it is unwritten, breaching by not meeting the expectation of one party can have negative effects on employees and employers. Such as employees might have low morale level, diminished loyalty towards the employer, resistance to changes within the company which will all lead to reduced performance.
On the other side it can create a bad reputation for the employer.
3.1The difference between fair and unfair dismissal
Termination of employment contract by an employer is classed as Dismissal.
Whether is fair or unfair, it can be established based on the procedure that was followed and the reasons.
The Fair dismissal happens in the following circumstances:(17)
Fixed-term contract has not been extended passed the end date
The employee do not have the capability to perform the work he was contracted in the first place . i.e a sales assistant has suffered a back injury , which no longer allow him to stand for long periods of time
The employee has had conduct related issues such as bad time keeping, attendance, etc
Legal restrictions .i.e. when a lorry driver has his driving license suspended
“Some other substantial reasons” – this is established by previous law cases.
The unfair dismissal claims might arise when the employee and the employer do not have the same view on the reason of dismissal or the employer has terminated the contract, by breaching it. For example the employer terminates the contract, without giving the contractual notice period.
The unfair dismissal is regulated by the The Unfair Dismissal and Statement of Reasons for Dismissal (Variation of Qualifying Period) Order 2012 (Employment Rights Act 1996); The Employment Equality (Repeal of Retirement Age Provisions) Regulations 2011; The Employment Act 2008
The unfair dismissal cases can have a negative impact on the organisation such as damaged reputation, cost and time wasted with the hearing and compensations, etc
3.2Importance of Exit Interviews
Even though there are different views on the importance of Exit Interviews, these are conducted to obtain feedback from employees.
If the exit interviews are conducted and documented properly, it can give useful information to help companies understand why employees are leaving, if there are any management issues that need to be looked at, about working environment, etc.
In order to obtain the honest answers specialist’s advice for the interview to be conducted anywhere 1 month up to a year after the employee has left. As they might be holding back relevant information, fearing for a bad reference.
With the results obtained from the interview , the managers should identify what needs to change or improve and do everything within their control to ensure changes are taking place in order to improve working condition and for employees and improve retention.(20)
Redundancies happen when there is going to be a :
A cessations of business
A cessation of business at the employee’s site
A reduction or cessation of work.
The legislation acts that regulate redundancies are Employment Rights Act 1996 s139 and TULR Act s195.
When it comes to redundancies there are specific process and rules that need to be followed.
For companies that have between 20 and 100 employees there is the duty to give 30 days notice to the Secretary of State and for more than 100 employees the notice period is 45 days under the TULR Act(18)
Consultations should also take place where the employees or their Union representative can come up with solutions on how avoid redundancies. One of these can be Recruitment freeze, which will force the employer to redeploy employees to other departments, in case the business does not cease completely.
Failure to consult about proposed redundancies, make lead to complaints to an employment tribunal.
When an employer wishes to dismiss employees on the grounds of redundancy they must:
-send a letter to the employee informing them of the situation and inviting them for discussions
-Hold a meeting with the employee regarding the redundancy and allow him to be accompanied, also informing him that he has the right to an appeal.
-hold an appeal meeting.
Selection criteria for redundancies must be fair, objective and consistent, based on skills or experience, attendance or disciplinary record, etc otherwise it can considered unfair dismissal.
Employers should also consider ways of supporting employees with job seeking. Larger companies might consider counselling services for their employees like financial advice, guidance on attending interviews, etc.
In the case of severance pay has been agreed the employer needs to inform the employees on how this is calculated how commission, overtime payments, accrued holiday pay and time off in lieu not taken will be paid. (19)
Redundancies can have a negative impact on employees and employers.
For example for employees can be a very emotional period and a recent survey has found that 65% percent of those going through redundancy has an increased stress level. Also the motivation and morale level can be very low among the remaining employees.
Also the const encountered by the company on the redundancy payments, mangers time dealing with the redundancies etc can have a negative impact on the employer.