A year of European intervention, tribunal legislation, job loss consultation, sex and race discrimination and outsourcing consternation

pay for both sexes, greater consultation over redundancies, tribunal reforms
and outsourcing HR were among the major issues the profession faced in 2001.
Then there were the unforeseen events, such as the Foot and Mouth crisis and
fall-out of September 11É


9 January
Equality law failing to close equal gender salary gap

Research by the Equal Opportunities Commission, exclusively released to
Personnel Today, revealed that while 68 per cent of organisations have an equal
pay policy it is having little effect on the 18 per cent gender pay gap.

While HR professionals were responsible for equal pay, the research revealed
they were not given enough power to drive through effective policies.

Only 18 per cent of 300 HR managers surveyed had responsibility for
supervising equal pay policy.

Equal pay was to become one of the hot topics of 2001, culminating in the
introduction of diversity reporting and equal pay questionnaires through the
Employment Bill in November.

9 January
Profession feels the strain as workplace disputes soar

Personnel Today research revealed that HR professionals were struggling
under the strain of spiralling employment disputes.

A total of 60 per cent of respondents reported a rise in tribunal cases
since the compensation limit was increased, and nearly half stated an increased
willingness to settle out of court.

16 January
Data rules could curb staff absence records

Questions were raised over the Data Protection Committee’s code, which
instructed employers not to hold records about an employee’s sickness or union
membership without their permission.

Often this information is vital to employment tribunals deciding cases of
unfair dismissal due to sickness absence.

HR professionals and employers lobbied data protection commissioner
Elizabeth France to try and get the policy changed. As we go into 2002 this
issue has yet to be resolved.


6 February
Corus debacle renews consultation demands

The announcement of 6,050 redundancies by steel giant Corus put the
Government under pressure to improve employee consultation rights and raised
doubts over the UK’s voluntary partnership approach to industrial relations.

Staff were informed of restructuring on the day the cuts were made public.
Both Government and unions reacted angrily to the lack of communication, and it
intensified calls for the Government to drop its opposition to a European
directive that would ensure consultation prior to redundancy.

13 February
HR chief defends talk over Corusjob losses

Allan Johnson, personnel director of Corus, explained to Personnel Today how
the steel giant had dealt with redundancy issues of more than 6,000 employees.

He claimed that staff were "generally happy" with the information
they had been given about company restructuring.

Most staff heard the news from the management, despite intense pressure from
the media and politicians for prior disclosure of the plans, Johnson claimed.

Corus blamed the redundancies on lowered domestic demand, high
transportation costs and the strength of the pound.


6 March
Compulsory equal pay audits split profession

The HR profession was split over the findings of the Equal Pay Task Force,
which recommended that the Government make annual pay audits mandatory.

"Voluntarism isn’t going to work. Unless companies gather pay data they
will not be able to address the issue of equal pay," said Bob Mason,
chairman of the task force and then-HR director of BT Wireless.

The key proposal was rejected by the Government which favours a voluntary

27 March
HR team rallies behind the scenes in farming crisis

With Foot and Mouth gripping the countryside, Teresa Newell, head of
personnel at the Ministry of Agriculture, Fisheries and Food, told Personnel
Today about the difficulties of managing an army of vets during the crisis.

To meet demands the 170-strong Maff personnel department worked overtime to
recruit foreign vets and temporary veterinary investigators, and to get them up
to speed.

This raised questions about pay, motivation, relocation and overwork that
had to be tackled under enormous pressure.


3 April
Doubts over success of new Acas scheme

Employment experts warned that the Acas arbitration scheme would do little
to cut the number of unfair dismissal cases going to tribunal.

Acas, which drew up the scheme on behalf of the Government, anticipated that
it would handle 1,000 unfair dismissal cases in the first year. HR
professionals were concerned that this was just a drop in the ocean – there
were nearly 54,000 complaints of unfair dismissal against employers in 1999 to
2000. The fears were proved correct earlier this month.

10 April
Calls grow for clearer staff monitoring rules

HR experts demanded the clarification of rules relating to employee records
and the monitoring of staff communications.

The CIPD claimed there was widespread confusion in HR and there was a need
for the Data Protection Code to be published in a single document to make it
accessible to companies and staff.

It had been planned to release the code in five parts with the final,
crucial guidelines on employee monitoring being published early next year.


1 May
HR chiefs offered key role in skills shake-up

The chief executive of the National Training Organisation’s national council
called on HR directors to drive forward the restructuring of the UK’s
fragmented national training strategy.

Andy Powell’s comments followed the Government’s commitment to replacing NTOs
with a smaller network of larger and more powerful Skills Councils.

Powell said, "If we involve HR people, we shall be able to hear the
kind of skills people need in their particular industries.

"There is a productivity gap between this country and its competitors
and we believe learning and training will help our companies develop a
competitive edge."

15 May
Nokia rings the changes in HR with mobile phones

Nokia introduced a self-service HR system for 7,500 managers through its mobile
phones and company intranet.

Lynn Rutter, Nokia’s global HR director, explained that the system enabled
HR to streamline the level of administration it had to perform and avoid
unnecessary duplication.

Globalisation was also an issue, Rutter explained, "The system allows a
fast response regardless of time zones, which is important in this new global
way of working."


12 June
Nortel outsources HR in pan-European deal

Nortel Networks launched a landmark outsourcing deal with PricewaterhouseCoopers.

The deal provided HR services to 20,000 European staff in 22 countries from
a single point of delivery.

PwC opened a bespoke HR service centre in Potters Bar, Hertfordshire, as
part of the £50m contract, and agreed to provide compensation and benefits,
resourcing, training, and payroll services for the telecoms giant. It also
employed over 100 of Nortel’s HR staff.

It was another important step in the growth towards outsourced HR and formed
part of a $600m global contract to provide supply management, procurement,
financial, learning and resource services.

19 June
Corporate killing law will spark a major review of safety policies

Home Office minister Keith Bradley pledged to introduce a new law of
corporate killing in the next Parliament, meaning that employers would have to
overhaul their approach to safety.

He also suggested that companies could face unlimited fines and directors
could be sentenced to life imprisonment for deaths caused by collective
management failure.

26 June
Cullen report orders a rail-training shake-up

The report on the Paddington rail disaster ordered the railway industry to
make major improvements to staff training.

Lord Cullen made nine recommendations on driver management and training in
his report on the public inquiry following harsh criticism of Thames Trains.

He claimed more should have been done to organise management and training in
a systematic manner, as managers responsible for driver training often taught
classes in their own way, training material was not validated and there were
gaps in the training.

HR experts throughout the rail industry took the recommendations on board.


3 July
E-mail monitoring rules will stay

Employers expressed disappointment at a special conference on data
protection that the draft code would not be changed to address its bias against

Information commissioner Elizabeth France promised that the code would be
simplified to help business understand the recommendations. But employers would
still have to prove a strong business case for the monitoring of an employee’s
e-mail or Internet use.

HR professionals were told that they have chief responsibility for
implementing the code.

24 July
Tribunal shake-up is hailed as watershed

Employers back new DTI proposals to reform the employment tribunal system.

The plans to help cut the spiralling number of tribunal applications
includes penalties for both employers and employees for failing to use internal
grievance procedures.

Furthermore, claims for unlawful pay deductions and breach of contract are
to be fast-tracked through the employment tribunal process.

Controversially the consultation paper called for employees to have to pay
to make a tribunal claim, but the Government failed to take that further.

31 July
HR shake-up as legal service is found racist

The Crown Prosecution Service radically overhauled its HR operations after
an 18-month inquiry revealed it was institutionally racist.

The report, commissioned by the CPS, claimed that there were barriers to ethnic
minority recruitment and promotion due to poor management training. It called
for the service to take equal opportunities more seriously.

It proposed that each of the organisation’s 10 divisions have their own
full-time equal opportunities officer, and ambitious diversity targets were
drawn up.


7 August
Firms ready to expand drink and drugs tests

A Personnel Today survey revealed that four out of 10 of HR professionals
claim they had either started or were considering introducing alcohol and drug
testing on staff.

Many of the 306 HR professionals polled wanted to undertake it in a bid to
reduce accidents, absenteeism and poor performance that were widespread and on
the increase.

The research showed that three-quarters of employers had suffered from staff
absenteeism due to alcohol abuse and three out of 10 firms had experienced
problems as a result of employees using drugs.

The research received extensive media coverage including Sky News, Channel 5
News, ITV’s News at Ten, national newspapers and regional radio.

31 August
Board-level HR key to closing gender pay in companies

HR must have a place at the boardroom table if employers are to tackle the
18 per cent gender pay gap.

Denise Kingsmill, deputy chairperson of the Competition Commission was
appointed by the Government to review ways of combating the sex pay gap. She
said that HR had a fundamental role to play if the Equal Pay Task Force’s
target of reducing the pay gap by half by 2005 is to be achievable.

She said, "Only 30 per cent of the companies I have spoken to have HR
on the board – this is not enough."


11 September
HR play role in Ulster police overhaul

The first civilian head of HR at the Royal Ulster Constabulary started work
in September, with his new role being seen as central to the controversial
reform of the police force in Northern Ireland.

Joe Stewart joined the RUC as the new senior director of HR with the aim of
spearheading changes in recruitment, training and work culture in the police
force that are critical to the success of the peace process.

The HR team started by recruiting 200 officers with an equal split between
Catholics and Protestants – as Catholics only made up 8.5 per cent of the
force. It also had to phase out 2,000 full-time reservists and develop plans to
recruit large numbers of part-time officers.

18 September
HR acts to lessen toll of despair

HR professionals across the world tried to trace missing staff and support
bereaved colleagues following the terrorist attacks on the World Trade Center
in New York that saw thousands killed.

As the human tragedy un-folded, HR teams were immediately faced with the
task of tracking down staff, updating their loved ones on the latest
information and providing support to distressed colleagues.

It took investment bank Morgan Stanley, – the largest tenants at the WTC –
several agonising days to track down its 3,700 staff.


9 October
Council is first to farm out entire HR function

Blackburn and Darwen Council became the first local authority to outsource
its HR director and strategic HR team.

The groundbreaking initiative will see a total of 89 HR staff transferred to
outsourcing company Capita by April 2002.

The council’s team, now based at Capita’s new business centre, is one of
seven functions being transferred in a deal worth £327m over 15 years.

John Connolly, the council’s HR director, who is now employed by Capita,
believes he has more control over delivering HR strategy because the move
centralised the HR function, which was previously spread over different

23 October
Board-level HR fuels a doubling in profits

Companies that had an HR director on the board had doubled their profits
compared to other FTSE 100 companies, exclusive research to Personnel Today

The groundbreaking study by Andersen Human Capital UK showed that the
average increase per share of FTSE 100 companies with HR on the board was 88 per
cent between 1996 and 2000. This is twice the 44 per cent increase for all FTSE
100 companies during those four years.

The findings are based on company performance figures to 31 August 2001.

Only a quarter of the 60 companies that had been in the FTSE 100 since 1996
had had HR represented on the exclusive board – where the most important
strategic-level decisions were taken.

30 October
Sept 11 sparks culture change

HR professionals were told at the CIPD national conference that they had to
respond to fundamental changes in staff attitudes towards work in the aftermath
of September 11.

Delegates heard that the terrorist attacks on the World Trade Center meant
that organisations had to redress the way they motivate and retain employees.

Lynne Fisher, director of diversity at Citigroup – who had to relocate
16,000 employees because of the attack – said that the company was looking into
a concierge service and sabbaticals as staff focused on a work-life balance

The investment bank also extended a home working scheme to retain its top


6 November
HR must take the lead to cut productivity gap

HR has to play a central role if plans to improve the UK’s productivity are
to be a success.

Research, by the TUC and CBI, concludes that sweeping changes are needed to
help improve the UK’s productivity, which has fallen further behind its main

The report called for improved learning and skills, the use of best practice
guidelines and better research and development.

The CIPD stressed the importance of developing people and taking a long-term
approach to productivity.

27 November
Work flexibility is made law

Employers are set to receive half a million extra requests a year for
flexible work from parents following new government plans.

The rules, based on recommendations by the Government’s Work and Parents
taskforce, mean that employers would have a legal obligation to consider
requests by parents for more flexible working.

Employers welcomed the measures but were concerned about possible extra red

The taskforce estimates that 80 per cent of requests will be solved during
discussions between employer and employee and claims that only 1 per cent will
be decided by tribunal.

30 November
90 per cent of employers are willing to employ refugees or
asylum-seekers to fill skills shortages… so why is it so hard for them to
find work?

Personnel Today research shows that more than 90 per cent of
employers want to take on refugees and asylum-seekers to met skill shortages,
but barriers get in the way.

Six out of 10 employers were having difficulties filling job
vacancies. But many of the 255 HR professionals that were polled had tried to
employ asylum-seekers or refugees claimed they faced confusing Home Office
paperwork and verification problems with applicants’ qualifications and work
experience. It meant that seven out of 10 employers were scared of breaking the


11 December
Will equal pay plans deliver?

The Government unveiled its weapons to cut the 18 per cent equal pay gap.

The proposals included the right for women to know what male colleagues at
the same level are earning and the requirement for firms to include HR
diversity information in annual reports.

Denise Kingsmill, who performed the review of equal pay which led to the
Government’s proposals, along with the CIPD warned employers that if voluntary
equal pay audits are not successful then the Government could legislate.

Legislative milestones in 2001

April 2

The Race Relations (Amendment) Act prohibits race
discrimination in all public authority functions not already covered by the
1976 Act. It also places a general duty on specific public authorities to
promote race equality. Specific duties to be introduced, which the Government
has consulted on, will support the general duty.

21 May

The Government introduced an Acas arbitration scheme as an
alternative to unfair dismissal cases at tribunal. It is a voluntary process
and both parties must agree to proceed to arbitration. It is designed to be
largely free of legalism with the arbitrator ruling on his own jurisdiction, on
procedural and evidential matters. It is hoped the new system will cut down on
the cost and volume of tribunals.

16 July

Amendments to the tribunal system meant employers and staff
must use grievance procedures. Unlawful pay deductions and breach of contract
were fast tracked and the time limit for lodging claims was extended.

1 October 2001

The National Minimum Wage rate was increased. The adult hourly
rate rose from £3.70 to £4.10 in October. The youth hourly rate is set to rise
from £3.50 to £3.60. These increases are subject to the continuation of
favourable economic conditions.

8 October

All employers whose workforce satisfies the statutory
requirements were required to grant access to a designated Stakeholder pension
scheme. They also had the option of amending the existing scheme to ensure

12 October

Regulations implementing the Burden of Proof directive clarify
burden of proof and redefining the meaning of indirect discrimination came into
force. The burden of proof shifted from the applicant to employer in
discrimination cases.

25 October

All staff now have the right to paid annual leave from their
first day of employment. The new regulations allow employers to introduce a
system for the taking of leave so that it accrues during the first year of
employment, at the rate of one-twelfth of the annual entitlement per month

Quotes of the year

30 May "It is ‘a
one-size-fits-all’ approach based on the European social model which will be
force-fed to UK employers"

Bruce Warman, HR director for Vauxhall on the projected
European vote forcing UK employers to consult in detail over redundancies and

7 August "We are considering
testing – not because we have a problem, but because there is increasing
legislation… and we don’t want someone to be injured through substance abuse"

Laura Halliday, HR executive at Ethicon, regarding the debate
on drink and drug tests, August

21 August "HR is fundamental
to reduction of the gender pay gap and must be firmly placed at board level,
Only by realising this can companies attract, retain and develop women"

Denise Kingsmill, equal pay tsar

18 September "The number one
issue was tracking people…the whole place became bedlam as we tried to track
all of them"

Global head of HR at PricewaterhouseCoopers after the terrorist

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