Supporting Good Practice in Managing Employee Relations - UK-Based System - Essay Example

Supporting Good Practice in Managing Employee Relations Contents Supporting Good Practice in Managing Employee Relations Contents The Impact of Employment Law at the Start of the Employment Relationship 2 Internal and External Factors That Affect the Relationship 2 Determining Employment Status 3 The Impact of Employment Law During the Employment Relationship 4 The Importance of Work–Life Balance 4 Legal Support for Family Support 5 Treating Employees Fairly in Relation to Pay 5 Equalities Legislation 6 Implementing the Psychological Contract 7 The Impact of Employment Law at the Termination of the Employment Relationship 8 Fair and Unfair Dismissal 8 The Importance of Exit Interviews 9 Managing Redundancies and Their Impact 10 References 11 The Impact of Employment Law at the Start of the Employment Relationship Internal and External Factors That Affect the Relationship Organisational culture and policies are two internal factors that impact the employment relationship (Gennard and Judge, 2005). Organizational culture is shaped by the assumptions organizational members have about the relationship between employers and employees, and is reflected in the way people communicate with one another and work together. The organizational culture is also shaped by the expectations, customs, and practices of the organization and is generally difficult to change. Organizational policies reflect the sanctioned norms and standards of organizational life (Gennard and Judge, 2005). It is important that the organizational policies relating to aspects such as recruitment, selection, training, advancement, and disciplinary action, be in line with the relevant legislation such as the Equality Act 2010, the Employment Rights Act 1996, the Disability Discrimination Act 1995, and the Health and Safety at Work Act 1974. Economic factors such as inflation, unemployment, economic growth and taxation affect employment relationship (Aswathappa, 2005). When the economy experiences growth, there are better prospects for business and employment. As a result, employers are eager to attract qualified and skilled employees by offering them attractive remuneration and benefits (Aswathappa, 2005). On the other hand, during a recession, organizations consider redundancies and layoffs more frequently in order to reduce their costs and remain competitive. This may also result in downward revision of employees’ pay packages. Social factors such as unemployment, immigration and changing societal trends also affect the employment relationship (CIPD, 2013). High levels of unemployment result in low wages offered and few benefits, if any, as the unemployed have no other alternative. Rising immigration levels result in low-skilled jobs being taken by foreign workers, who can be paid lower wages than British workers. Trends such as dual-income households and even single-parent households mean that employers have to accommodate concern for the personal obligations of employees in the workplace. Determining Employment Status Worker, employee, and self-employed are three different types of employment status in the UK. According to the legal definition, an employee is an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment. A worker is defined as “an individual who works under (a) a contract of employment or (b) any other contract whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client of customer of any profession or business undertaking carried on by the individual” (Gov.UK, 2014). On the other hand, self-employed workers are characterized by being able to substitute other workers for their own services. Furthermore, self-employed workers are required to bring in their own equipment to complete their tasks and are usually paid on a contract rate pay. They are not entitled to any sick pay or holiday pay either. It is important to determine the employment status because it affects the rights and duties of the employer and employee (Bradfield Group, 2013). The status of an employee confers the greatest rights to the employee compared to a worker or a self-employed person. Employees enjoy rights such as protection in case of unfair dismissal. If an employee is made redundant by an organization, he or she is entitled to receive a redundancy payment, which is not awarded to workers or self-employed persons (Outset UK, 2008). Furthermore, in case the business is sold, the employees have the right to be transferred without losing their jobs. Workers are protected by different rights such as the right to receive holiday pay as well as the national minimum wage. They are also entitled to legal action in case of discrimination and in case of detrimental action for whistleblowing (Outset UK, 2008). While self-employed people are not entitled to such protection, they can institute claims for beach of any terms of the contract (Outset UK, 2008). The Impact of Employment Law During the Employment Relationship The Importance of Work–Life Balance Work–life balance is gaining wide popularity and legal support as organizations realize that employees have a life beyond the workplace and they cannot perform productively if their personal commitments are not fulfilled. Work–life balance is based on the recognition that employees are faced with competing personal and professional demands for their limited time and energy resources (Smith, Farm and Yellowley, 2013). Work–life balance is becoming an integral feature of organizational life because it helps both employers and employees strike a mutually beneficial balance. Employees can become more productive if they are able to devote time equally between their work and family (Smith, Farm and Yellowley, 2013). Greater flexibility in the workplace means that employees can choose to work when their productivity levels are at their highest. As a result of flexible working arrangements, there is reduced absenteeism and employee turnover in the workplace and the organization can control turnover costs more effectively (Bradfield Group, 2013). Legislation that supports work–life balance includes the Work and Families Act 2006, which prescribes an ordinary maternity leave of 26 weeks and an additional maternity leave of 26 weeks. The employee is also entitled to a statutory maternity pay for 39 weeks (Lane, 2007). The Employment Rights Act 1996 entitles shop workers in England and Wales to choose not to work on Sundays. Annual leaves and time off from work are also provided by legislation (Legislation UK, 2013a) According to the working time directive, workers do not have to work for more than 48 hours without their consent (Gov.UK, 2014). Legal Support for Family Support Under the Additional Paternity Leave Regulations, employees who are biological fathers or fathers of adopted children are entitled to take a maximum of 26 weeks of paternity leave during the first year of the child’s life (Legislation UK, 2013b). Furthermore, the legislation provides for the father to share maternity leave with the mother. The arrangement under the Work & Families Act 2006 has been made in such a way that the mother stays with the child for a maximum period of six months before returning to work, while the father can take care of the child for the remaining period of the maternity leave (Legislation UK, 2013b). In addition to maternity and paternity leave, the employees are legally entitled to receive statutory sick pay for 39 weeks (Lane, 2007). The law also allows employees to take time off from work to discharge their public duties. The Equality Act protects the employee against any harassment or victimization by the employer because of trade union membership. Employees are also entitled to receive dependants leave. The Employment Rights Act 1996 protects employees from any detrimental action against them, which relates to leaves taken for the reasons mentioned above. Section 76 of the Act entitles employees to receive parental leave of a minimum period of three months to care for a child without any detrimental consequences. Employees aged 16 or 17 and not receiving full-time secondary or higher education are entitled to time-off during working hours to undertake study (Legislation UK, 2013a). Furthermore, Section 80F of the Employment Rights Act 1996 entitles the employee to a change in the contracted hours and times of work to care for a person who meets the prescribed description for such care. Treating Employees Fairly in Relation to Pay The first reason for treating employees fairly in relation to pay is concerned with productivity. Equity theory explains that employees compare the ratio of effort and reward for themselves with others at similar levels in the organization (French et al., 2011, p. 172). Employees compare how the effort they put into their work with how much they are rewarded for it. If employees feel that they receive less in proportion to what others doing the same type of work receive, it is likely to create a sense of disequilibrium or inequity. Employees try to restore the balance or equity by reducing their level of input to justify the pay they receive. In some cases, they may even quit the organization to find a better or more equitable ratio (French et al., 2011, p. 172). Therefore, employees should be treated fairly in terms of procedural justice and distributive justice to avoid creating perceptions of inequity (French et al., 2011, p. 173). The second reason for paying employees fairly is to avoid legal consequences. If an employee believes that he or she is not receiving a fair pay and does not receive a favorable response from the employer, the employee is entitled to approach the employment tribunal by the Equality Act 2010 (Legislation UK, 2013c). This complaint can be lodged even after the employee has left the job, provided the complaint is made within six months of resignation (Legislation UK, 2013c). Equalities Legislation A number of legislative acts influence the employment relationship, and the organization needs to pay attention to ensuring that the rights granted to employees in these laws are protected in the employment contract. The Equality Act 2010 is the foremost equalities legislation which requires employers to treat all employees fairly regardless of age, disability, gender, marriage, race, religion, sex or sexual orientation (Legislation UK, 2013c). Direct discrimination under Section 13 of the Equality Act 2010 is defined as the less favorable treatment of an employee by an employer because of a protected characteristic such as age, race, disability, sex, etc. (Legislation UK, 2013c). On the other hand, indirect discrimination is described under Section 19 of the Equality Act 2010 as the application of a provision, criterion or practice which is discriminatory in relation to a relevant protected characteristic of the employee (Legislation UK, 2013c). Under Section 26 of the Equality Act 2010, harassment is described as engaging in unwanted conducted relating to a relevant protected characteristic to the effect of violating the dignity of the employee or creating an environment that is intimidating, hostile, degrading, humiliating or offensive for the employee (Legislation UK, 2013c). Particular attention is paid to specifying unwanted conduct of a sexual nature or creating a hostile environment for the employee. If the employee rejects the offer of sexual conduct and is then penalized by less favorable treatment in comparison to other employees, then the employer can be charged with harassment (Legislation UK, 2013c). Victimization is another important element of equalities legislation. Section 27 of the Equality Act 2010 describes victimization as the behavior by which an individual subjects another to a detriment because he or she commits a protected act or is believed to have done such an act (Legislation UK, 2013c). Hence, the employee may make an application to the Employment Tribunal within 3 months if he or she has been harassed, victimized or discriminated against by the employer (Compact Law, 2014 a). Implementing the Psychological Contract The psychological contract can be described as “the perceptions of the two parties, employer and employee, of what their mutual obligations are towards each other” (CIPD, 2013). The psychological contract is important because it determines the behavior of employees and managers with each other more than any legal employment contract. The concept of psychological contract reinforces that both parties have to perform their share of responsibilities to build a successful relationship. The concept of psychological contract can be implemented by putting in place supportive policies and procedures. The policies and procedures perform an important function in lending support to the organizational goals and objectives because they provide guidelines that can be followed by employees. Policies on performance evaluation and appraisal can be cited as an example of such policies. These policies should include unambiguous criteria for evaluating the performance of the employee. Such policies help to build trust, security and a sense of fairness in the relationship. Policies for promotion and advancement should also be clearly communicated through policies. According to the Guest model (Guest and Conway, 2004), the inputs to the psychological contract such as employee characteristics, organization characteristics and HR practices should be such that their content inspires trust and fairness in the workplace. This results in the outputs of the process which include productive employee behaviour and high levels of performance. The Impact of Employment Law at the Termination of the Employment Relationship Fair and Unfair Dismissal According to the CIPD, all employees are entitled to fair dismissal. There are five criteria for determining whether dismissal is fair (Gov.UK, 2013b). These are: 1. Capability: The dismissal is fair to the extent that it was made on the grounds that the employee does not possess the capability or necessary qualifications to perform the job. 2. Conduct: The dismissal is fair if it has been brought about by poor conduct by the employee, such as not following the rules or exposing the organization to risk. 3. Redundancy: The dismissal is fair if the redundancy has been brought about by the organization no longer being engaged in the work for which the employee had been hired. 4. Statutory reason: Fair dismissals are those that are carried out because it becomes legally wrong for the employee to continue the work he or she has been hired for. 5. Any other reason considered substantial enough may be deemed a fair dismissal. In addition to meeting the five criteria, fair dismissal should also be carried out in a reasonable manner. The standard procedures for disciplinary action and dismissal should be followed and the employee should be given a chance to appeal the dismissal. Unfair dismissal can be charged where the employee does not believe that he or she was given adequate warning or that the reason for dismissal was fair (Gov.UK, 2013b). In certain cases, even valid or reasonable dismissal can be termed as unfair dismissal, such as dismissal on the grounds of pregnancy, paternal leave, trade union activity, discrimination or whistleblowing (Gov.UK, 2013b). Constructive dismissal occurs when the employee is forced to leave the job against his or her will because of the conduct of the employer such as unexplained demotion or pay reductions, or unexplainable changes in working conditions (Gov.UK, 2013c). Wrongful dismissal occurs when the employer commits a breach of contract in dismissing the employee such as not giving adequate notice and the employee suffers a loss because of this (Compact Law, 2014 b). The Importance of Exit Interviews Exit interviews are conducted when an employee has resigned. Generally, only employees who have resigned voluntarily are invited for an exit interview while employees who have been dismissed are not required to provide one. The purpose of the exit interview is to determine the reasons for the employee’s resignation (Daft and Marcic, 2009). Through an exit interview, employers can identify whether the employee is resigning because of a more attractive opportunity or because of problems in the current job. In either case, the employer is able to adapt appropriate measures to remedy the situation, such as by offering more attractive jobs in order to retain current employees or take steps to improve the working environment or quality of management (Bradfield Group, 2013). As a result of these strategies, the organization can bring down the rate of attrition and the costs associated with it. The workforce can increase its job satisfaction and better relationships between the employer and employee can be created as employees feel free to provide feedback to higher management (Daft and Marcic, 2009). Employers are able to identify potential weaknesses in the work environment and take steps to make the organization more attractive to employees. Employees also benefit from exit interviews. The exit interview offers an opportunity to identify the main reasons for poor performance or other aspects that prevent a conducive work environment from shaping (Daft and Marcic, 2009). Employers should encourage employees to share information so that corrective measures can be taken for the future. Managing Redundancies and Their Impact The best way to manage redundancies in the organization is to follow a fair redundancy process which ensures that the rights and interests of all the parties involved are considered fairly before making any decision. The first stage is the determination of the reasons for the redundancy as well as identifying any steps that could have been taken to avoid redundancies in the first place. The management should ensure that the reasons for redundancies are valid and compelling. The organization should also draft a containment strategy in consultation with all the departmental managers being affected. The managers of the relevant departments should be briefed to prevent unwanted rumours and anxiety to spread (Bradfield Group, 2013). Another key stage in the process is the consultation meeting with the workforce (Bradfield Group, 2013). During this meeting, the management should notify the workforce of redundancies. It is, however, considered fair and appropriate to indicate how many employees are going to be made redundant (Bradfield Group, 2013). This stage is followed by individual meetings with the employees being made redundant. During this meeting, the emphasis should be on the situation and facts. The meeting should be followed by a written confirmation letter clearly indicating the facts of the case and stating all the termination rights of the employee (Bradfield Group, 2013). It is important to allow the employee an opportunity to appeal the decision (Bradfield Group, 2013). Redundancy affects not only the outgoing employees but also those who remain. This is described as the survivor syndrome where the remaining employees become demoralized and anxious about their job security. The organization should work at strengthening trust with the employees, and display enthusiasm and optimism for the future. This can be done by instituting career and skill development programs because the surviving employees may need to step into the shoes of those who have been dismissed. Career development programs can create trust by increasing their level of competency and showing that the organization is investing in them for the long term. Having discussions with the surviving employees can also help managers to assure them that they are valued and appreciated in the organization. References Aswathappa, K., 2005. Human resource and personnel management. 4th ed. Tata-McGraw Hill. Bradfield Group, 2013. Supporting good practice in managing employee relations. CIPD, 2013. Employment law at work. [online]. Available at: http://www.cipd.co.uk/. [Accessed 25 January 2014]. Compact Law, 2014 a. Remedies and Compensation for Discrimination. [online]. Available at: http://www.compactlaw.co.uk/free-legal-information/employment-law/remedies-and-compensation.html. [Accessed 25 January 2014]. 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Available at: https://www.gov.uk/dismissal/unfair-and-constructive-dismissal [Accessed on 20 January 2014]. Guest, D., and Conway, N., 2004. Employee well-being and the psychological contract: A report for the CIPD. London: Chartered Institute of Personnel and Development. Lane, M., 2007. Work and Families Act 2006. CIPD [online]. Available at: http://www.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2013/01/29/quickguideworkandfamiliesact2006-2007-04.aspx [Accessed on 20 January 2014]. Legislation.gov.uk, 2013a. Employment Rights Act 1996 [online]. Available at: http://www.legislation.gov.uk/ukpga/1996/18/contents [Accessed on 20 January 2014]. Legislation.gov.uk, 2013b. The Additional Paternity Leave Regulations 2010 [online]. Available at: http://www.legislation.gov.uk/uksi/2010/1055/contents/made [Accessed on 20 January 2014]. Legislation.gov.uk, 2013c. Equality Act 2010 [online]. Available at: http://www.legislation.gov.uk/ukpga/2010/15/contents [Accessed on 20 January 2014]. 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