Challenging times

In October, a number of changes to employment law go into force. UK HR leaders discuss which changes will pose the greatest challenges to their organisation. Compiled by Michael millar

Angie Risley, group HR director, Whitbread Group plc

The biggest challenge for us will be the regular increases in the National Minimum Wage.

The rapid (and quite substantial) increases are a real challenge. Passing the costs on to customers in an industry as competitive as ours is not a very realistic option and you can only look to productivity increases so many times before it becomes a matter of reviewing the number of people you’ve got or potentially reducing the benefits (and therefore overall packages) of these employees.

It has got to the stage where it is becoming increasingly difficult for employers to avoid using an age policy. This could mean employing increasingly younger people – both under 22 or even 16/17 year olds. We’re not at that point yet, but it is something that is a broader, industry wide issue.

At Whitbread, we are doing a considerable amount of work on employee types to understand what each group wants. We hope that by doing this we’ll be able to find a way to really crack the pay conundrum and find the right balance of pay, benefits and flexibility that will meet each of our employees needs.

Other changes to employment legislation will not pose any major challenges for Whitbread.

We have always adopted similar best-practice procedures to those proposed on discipline and grievance and are focusing on improving the skills of line managers so we can reduce (avoid) the need for discipline and grievance.

With dispute resolution, we have adopted the recommended approach for a number of years. We have been training up in-house experts in employer law and getting them involved in employment tribunals/cases with a view to identifying ways of avoiding situations being escalated to a tribunal.

Paul Stephenson, director of HR services, Severn Trent Water

This year’s legislative changes, although many, are perhaps not as significant or challenging as 2003. In 2003 we had extensive new diversity and work life balance legislation – Flexible Working, Religion and Sexual Orientation Regulations brought new statutory provisions into previously unlegislated areas and new employee relations challenges for business – flexibility vs. business continuity and cost.

The 2004 timetable is, in the main, one of improvement, evolution or clarity around existing legislative provisions.

If I were to choose the biggest challenge this may be the new Statutory Disputes Resolution (SDR) procedures (Dispute Resolution Regulations 2004) which comes into effect from 1 October. The key parts of this legislation are to introduce statutory dismissal, disciplinary and grievance procedures which must be “completed” before tribunal will take the case with a new remit for tribunals to increase awards by between 10% to 50% in defined circumstances for breach of procedure.

The real purpose of the legislation is to reduce the case load into tribunals and promote local resolution. This gives challenges for business around efficiency and cost of resolution, with the onus being on the employer to ensure that statutory procedures are fully followed and “properly” conducted – the risk is that completion of procedures becomes yet another ground for legal argument.

Overall, I’m concerned that the new procedures add more “rules”. We have reviewed all procedures which may result in dismissal and have checked that they align with the statutory guidance.

STW re-vamped our policies about 18 months ago and is already developing additional guidance for line managers and our HR team in light of the proposals.

Simon Bamsey, reward and employee relations manager, City of Westminster

Westminster City Council has for some time now been reviewing policy and practice to prepare for the dispute resolution provisions of the Employment Act (2002) (sections 29-34) due to be implemented on 1 October 2004.

The council has thoroughly reviewed existing grievance policy and disciplinary code in line with Acas and DTI guidance.

The following principles have been used to refine and develop a new grievance policy:

  • Clear and easy to understand and use
  • Swift to operate with clear and fair timescales
  • More emphasis on informal and local resolution
  • Provision for the confidentiality of all such proceedings
  • Ensuring that every employee has the right to be accompanied at each stage of the formal procedure
  • Individuals involved to fully understand their rights and obligations
  • A clear three stage procedure with accountability ultimately resting with the chief officer
  • Specific procedures for dealing with sensitive issues

The creation of a new policy on discrimination, bullying, victimisation and harassment emphasises the commitment of the City of Westminster Council to deal with such sensitive issues with the utmost seriousness, and to raise awareness of these issues across the council.

Both policies were developed through work with a focus group of managers and HR professionals and the trade unions. The new policies have been widely communicated through a bulletin to all managers and have been published on the council’s intranet site. Appropriate training will be made available to managers.

The council’s disciplinary code is also being reviewed and revised in conjunction with the trade unions.

Faran Johnson, head of global talent, AXA Group

This round of UK employment law is ‘tweaking’ legal rights and I’m confident in the company’s robust HR practices.

It is European Commission plans that worry me. Forthcoming EC law will eliminate ‘direct and indirect discrimination’ on grounds of gender in the supply of services as well as goods across Europe. This means men and women will have to be insured at the same premiums in the same circumstances.

This will push HR into a firmly strategic role in the insurance industry as they work to ensure staff compliance and to evaluate how changes will alter the employee value proposition as companies may have to adjust finances to cater for changes in risk.

As HR knows, the first thing to go when there are financial cuts is training and development. However, the company has to make sure it takes the time and the effort to communicate changes to staff and then evaluate their understanding of it.

Paper and intranet are not enough to succeed and is planning training and development, induction courses, and other measures to make these new gender equality measures part of the company’s core values.

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