Encouraging employees to adopt a greener lifestyle is one thing, but how far can employers go in terms of building their views into policies and contracts? Nickie Pickernell considers the issues.
Earlier this year, a company named Intelligent Hand Dryers attracted headlines after announcing they had banned all single-use plastics in their offices, making it a disciplinary offence for employees to bring such items to work.
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This goes further than many companies with environmental policies, effectively making it a condition of employment.
The owner of IHD explained that there would be a three-strike policy, after which an employee risks dismissal if they do not change their behaviour. But this raises the question, how far should employers impose their views on employees in the workplace from a legal perspective?
Should employers police employee activity?
It is largely accepted that employees have a right to their own personally held views and generally, employers are only able to limit the conduct of employees in relation to their work or the reputation of the company.
A contract of employment exists to set expectations for the behaviour and performance of employees, predominantly within the workplace. The idea of restricting the actions of employees in relation to something completely disconnected to their work goes beyond the norm.
Integrating an environmental policy into the contract of employment requires agreement from employees – this change cannot be invoked unilaterally. Current employees would need to be consulted on any proposed change to their employment contract and new recruits will need to be fully aware of the terms of employment before they enter into a contract with the employer.
Risks and rewards
The younger generation of employees are more likely to pressure employers to embody a value system that they identify with. According to research conducted by LinkedIn, 86% of millennials and 71% of all those polled would consider taking a pay cut to work at a company with values they believed in.
This may mean that having a robust environmental policy, for example, is likely to help recruit and sustain an engaged workforce with possibly increased levels of productivity.
Such policies could also be beneficial to the employer’s reputation and client relationships. Studies have shown that customers are more likely to purchase products and are willing to pay more for those products from a company they perceive to be doing good.
However, both employees and clients are increasingly able to spot “greenwashing” – making misleading claims about environmental practices.
This means that any initiative must have adequate follow-through and not just pay lip service to a company policy. The environmental space has quickly become one in which actions speak louder than words and making what would usually be a policy into a contractual term of employment certainly does that.
That said, implementing such changes is easier said than done. Making these changes will carry a significant financial burden for the employer. However, the benefits will only materialise if the perceived value of an environmentally friendly workplace does not come at a significant cost to the employee. This leaves the employer to pick up any shortfall.
For instance, IHD made significant changes to its benefits, such as providing employees with reusable water bottles and providing sustainably packaged snacks. Such additional financial costs are necessary to meet employees in the middle, rather than simply imposing regulations, which make their lives more difficult but provide little direct benefit.
When introducing the change, IHD only had a small number of employees to persuade of the benefits.
Even so, the company ran a trial period to gauge the level of employee buy-in. This becomes more difficult with a larger workforce.
Employees are often resistant to change, especially where they feel an encroachment on their autonomy. They are far more likely to support a change where there has been a consultation, trial or adjustment period or where changes are suggested rather than unilaterally imposed.
As with anything that increases costs without an easily quantifiable benefit, this may run into opposition from shareholders.
The benefit of corporate social responsibility in general is hard to quantify and so it can create shareholder resistance where there is potential for the scheme to lose the company money. For example, shareholders of McDonald’s rejected a resolution to dispense with plastic straws in their outlets, although they were banned in the UK in 2018.
Ultimately, employers must gauge their audience to determine whether their proposed scheme will have sufficient buy-in from shareholders and employees alike. They must be careful when implementing such measures and be sure to consult existing employees collectively and comply with any other relevant employment law requirements.
Changing an employment contract to add substance to an environmental policy carries the risk of raising the level of staff turnover. However, in instances where the policy is integral to the business’ mission and the change is implemented sensitively there may be considerable benefits to the workplace in the long term.