British Airways has offered 40,000 staff the option to work for free for up to a month to protect their jobs and help the troubled carrier navigate the global recession. But how do you sell such a potentially explosive idea to your workforce? And what issues do you need to be aware of first? Phil Boucher talked to professionals from each sector of the HR world to find out what pitfalls need to be negotiated.
The employment lawyer
Gagandeep Prasad, solicitor, Charles Russell LLP
“Some employment contracts allow for variations to be made, but an employer cannot do this unilaterally and must get either express or implied consent from the employees first. If they do not voluntarily agree the change in terms, then the employer can seek to dismiss and re-engage them on revised terms.
“The problem is that this will involve formal consultation and will not be a quick fix. It’s also likely to be treated as an actual dismissal, allowing the individuals to claim unfair dismissal. Alternatively, if an employer wishes to avoid dismissal and re-engagement, it can state that the revised terms apply from date ‘x’ and wait and see. If the employees continue on this basis the employer can argue that they have accepted the new terms.”
The HR consultant
Gillian Dowling, employment technical consultant, Croner
“Organisations are often not aware of the risks associated with bringing in a pay cut or even unpaid work, as carrying out a contractual change to more than 20 employees is a lot like carrying out a redundancy exercise. An employer is legally obliged to inform and consult representatives about the change in terms and conditions for 30 days – or 90 days if more than 100 employees are affected.
“This is the same consultation process an organisation has to go through when proposing to dismiss 20 or more employees as redundant. In some cases it may make more sense for an organisation to start a redundancy consultation and consider reduced working hours as an alternative work option within the redundancy procedure.”
Mike Emmott, adviser employee relations, CIPD
“It’s all about crafting the message. This recession has seen many employers introducing measures to keep redundancies at bay and by and large employees will take the opportunity to hold on to their jobs, even where this involves some personal sacrifice. Most will respond to the message that ‘we’re all in this together’, but this may involve management demonstrating an equality of pain.
“Organisations that seek to make deep reductions in pay or conditions will also have to show they are justified by the scale of difficulties facing the organisation. In a recession, there are unlikely to be too many easy options for either employers or employees, so it’s important that employees see the proposed changes as being fair. By doing this it’s possible that what may be deemed unacceptable for the long-term may be achievable as a short-term measure.”
The HR director
Keith Brownlie, group HR director, Informa PLC
“Bluntly, BA hasn’t given its staff a proper choice. Rather than sitting down with a representative group, the management has chosen to offer its own solution and effectively said ‘we know best’. Frankly, it is not the way that any organisation should behave.
“Certainly, sitting down with staff representatives drags things out but this whole thing is about consultation. It is about senior management engaging openly and honestly with the very bottom of the organisation, turning the business pyramid on its head and saying, ‘we have got some real problems, these are the implications if nothing is done do you have any ideas?’ People all have families and commitments and will be far more willing to commit to something like a job share or trading-off holiday if they are involved in the decision-making. Plus, if the staff have come up with the idea it is a damned site easier to sell it to the rest of the organisation.
“By imposing a head office diktat you are closing off and ruling out any of these options, and it totally flies in the face of the concept that ‘we’re all in this together’.
The trade union
Adam Lent, head of economics and social affairs, TUC
“Doing something like this is incredibly delicate. Even the people who like their jobs go to work because they get paid for it. If you start messing around with that fundamental contract you’re stepping into very delicate territory. So doing it in a transparent and methodical way is very important. Firms have to sit down with unions and show quite clearly why this is necessary. People can read balance sheets and projections, so if firms are open and transparent and let union negotiators recognise it is a necessity, that all the other options have been looked at and that if this is not done there will be redundancies, then unions will accept it.
“The first rule of a union is to avoid redundancies at whatever cost. But if there is any sense among employees that this is just a cost-cutting measure and that actually the financial circumstances of the firm don’t genuinely require it, it will be a disaster.”
Simon Draycott, director of business psychologists Mendas
“Moves like this effectively change the psychological contract and raise the stakes a little because the workforce is asked to make a sacrifice and, rightly, expect something in return. So firms need to forcefully make the link by saying, ‘if you do this, it will save x amount of money and avoid x amount of redundancies’. Being quite clear why you are asking for something matters immensely.
“The language you use is also important, and it is odd that BA has ‘invited’ people to take a reduction, as that is only likely to build up resentment. You are aiming to set up a sense that ‘we are all in this together’, yet this has been positioned to give staff a bit of a choice: you can take a week or month off unpaid.
“The danger is that this will set up some resentment as the cat will eventually get out of the bag about what choices people will have made. It is fairly obvious that if you have taken a month off without pay you are not going to be too pleased to find out the person next to you has only taken a week off or nothing at all. By doing this the company has made a rod for its own back and really undermined its own initiative.”