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Helen Giles a HR specialist with particular focus on the charity sector, has raised some provocative issues regarding the employment tribunal process in a Times Opinion piece 4th January and again when interviewed on the Radio 4 Today programme 5th January. She writes:
“A major concern that perhaps hasn’t come out strongly enough is that the government is embarking on some major initiatives in an endeavour to stimulate the economy, reform the welfare benefits system and get long-term unemployed people back into work, and to achieve social improvement by involving community groups and charities in setting up and running social enterprises, locally run/free schools and so on. But the degree of employment regulation/employment law that has been introduced and the way that this law is administered by the Employment Tribunals system as it stands poses a major obstacle to achievement of these aims because of the costs and risks involved for employers in employing people generally, and particularly if they make the mistake of employing the wrong people, which is a very hard mistake to avoid all of the time.
In a nutshell, the issues are:
- The Employment Tribunals framework was set up in the 1960s as a simple and cheap means of jurisdiction in employment disputes. It has evolved into a complex system of legalised extortion, extremely costly to both employer and state (another unnecessarily heavy drain on public funds at a time when savings have to be found).
- The Coalition Government clearly has some inkling that there is a problem whereas the previous administration refused point blank to accept any need for a review, claiming that any reform of the system would lead to workers oppressed by hard-hearted employers being deterred from seeking remedy. Noises have been made about increasing the qualifying period necessary to claim unfair dismissal from one to two years’ continuous service. But this misses the point that many of the most vexatious, costly and troublesome cases are taken under one or other of the heads of discrimination, for which no length of service is needed – age, sexual orientation and religious and philosophical belief were added to sex, race and disability. 38,310 discrimination claims were lodged last year. It’s free to lodge the claims but employers have to pay legal fees from the moment they receive notification of the claim.
- The elaborate pantomimes that the law forces employers to play out when trying to deal with an employee’s poor performance or conduct for fear of a claim being made is severely restricting efficiency both in public and private services.
- Every year the volume of ET cases filed goes up exponentially – over a quarter of a million cases accepted in 2009-10, an increase of 56% over the previous year - so that the system itself can’t cope and in busier parts of the country it took 18 months for cases to be heard. Only 13% of these were successful in court. Two thirds of claims are settled out of court, sometimes because the employer has done something wrong or procedurally unwise but more often because the costs of fighting, irrespective of the weakness of the employee’s case, are prohibitive. The HR Director of a Housing Association recently told me that for the cost of fighting a case, which they won, they could have built three new family homes.
- No-win no-fee lawyers are shamelessly inciting people to submit claims on flimsy grounds because they know they can bully a settlement out of the employer on the eve of a case being heard, however weak the employee’s case. They know employers and their insurers (if insured) would rather pay out £25,000 for the employee to go away rather than £50,000 or more to fight the case in court, even if they are almost certain to win the case.
- I recently ran a Business Link seminar for small business people on how best to protect themselves against the perils involved in employing people. One participant told me that many of his small business-owning friends employ illegal immigrants cash in hand because although the penalty if caught is an unlimited fine and two years in jail, they see this as less risky than having workers on the payroll who are likely to exploit their limitless rights.
- It is going to be tremendously difficult for the Government to achieve some of its key policy objectives unless it undertakes a wholesale reform. The long-term unemployed about to be reintroduced to work constitute a massive risk for employers liable to have claims made against them when they try and part company with those who don’t work out. And the Government wants charities to play a large part in bringing about the ‘Big Society’, but charities always have to have some paid staff and the smaller ones are groaning under the burden, expense and risk involved in complying with an employment law system that has become so far skewed in favour of the employee, largely because there is absolutely no financial disincentive to pursue weak and opportunistic claims. Moreover, it is just very difficult to run an efficient workplace when employment law encourages people to present themselves as victims of bullying and discrimination whenever the employer justifiably tries to tackle their poor performance or behaviour.
- I have practical ideas of how reform can take place, for example every claim should be subject to a desktop assessment in precisely the same way as insurance lawyers have to certify the employer’s case as having more than 50 per cent prospect of success before they will underwrite it. Where the employee’s case is deemed as having less than 50 per cent prospect of success they should be advised that they will have to pay the employer’s costs if they insist on pursuing it. There are many others, including lawyers, who have all manner of practical suggestions. The general principle is that claimants must be made to bear costs if they lose cases.
- I have many true life astounding tales of the nonsense that gets entertained by the ET system, and the real costs to the organisations involved.
- Employment regulation more broadly is set up to undermine organisational efficiency. For example the TUPE (Transfer of Undertakings Protection of Employment) Regulations means that a service (say a social care service) often fails because the staff are so bad, yet when the service is re-tendered all the bad staff have to go with it, and the rest of employment law makes it really difficult to get rid of them. Or the regulation which states that when redundancies are being made, a woman on maternity leave has the automatic first right to any job that remains. This means s a poorer performing employee has to be kept in preference to a high performer just because the former has had a child. Or the ridiculous procedural lengths that have to be gone to before dismissing an underperforming employee – typically it takes a year or more to go through all the hoops before dismissing someone, so that employers often pay poor performers massive sums to go away – sometimes 100% of salary whereas in a typical performance related pay scheme the most someone can hope to earn as a bonus for exceptionally good performance is 10% of salary.”
Helen continues
“Statistical evidence, such as it is, can be found in the most recent Employment Tribunal Stats. There is no measurement in these or any other stats that I know about of the amount of time that is wasted by employers on dealing with workplace grievances leading up to claims, nor of the amount and sums of settlement paid to stop people lodging a claim in the first place. This information would need to be collected through interviews of a cross section of size and types of organisations in all sectors. Bigger businesses fare best because they can afford to pay people to go away rather than entering into the months’ of effort and toil involved in ‘fairly’ dealing with an underperformer, non attendee or bad behaviour. And see, for example, the Telegraph article from 3rd January about the £600,000 that the BBC forked out in the last year to settle claims, having had 33 of them.”
Finally, a resounding endorsement of her opinions comes in the form of a letter in today’s (5th January)Times from an ET judge of 22 years’ standing, who gives yet another level of analysis on how the system is not working as it is intended.
“What started as system of quick informal justice for workers at a time when there was no real protection from arbitrary dismissal has mushroomed into a bureaucratic and hideously complex quagmire of procedural and legalistic niceties, based partly on an enormous increase in statute law”
Helen Giles is Managing Director of Real People part of the Charity, Broadway Homelessness and Support. Real People’s award winning HR team delivers a comprehensive HR consultancy service.
www.broadwaysrealpeople.com
A newly published research report from PricewaterhouseCoopers (PwC)
states that the cost of replacing a competent employee equates to around a year of that individual’s yearly salary. They say that this is an estimation of the costs associated with lost productivity, lost skill and the cost of replacing and training new staff.
The report predicts that UK businesses are losing around £42 billion each year due to lost talent and that the UK trails other economies in terms of staff retention levels (UK 10.4%, US 7%, Germany and France 5%)
Richard Phelps, Human Resources Services Partner PwC comments: “With many companies eager to maintain or grow staff levels as the economy starts to recover, it is crucial they consider the full costs of losing staff through resignation. The need is particularly pressing given that many employees who sat tight during the downturn may now be looking for new opportunities elsewhere”
Investment now on positive employee engagement and promoting your employer brand will clearly have an impact on your longer term retention levels with the potential to achieve significant savings. Here at 360 Degrees Advertising we are working with a number of clients on developing their Employer Brand and Employee Engagement strategies.
Last week, David Cameron revealed the government’s decision to cut public sector jobs in an attempt to bring the country out of its current £952 million debt. By 2014, this debt has been calculated to rise to a whooping £1.4 trillion, a serious problem that is going to reap serious consequences.
The solution is to be a raise in tax and a cutting of government spending, including the axing of up to 350,000 public sector jobs. These jobs have always been renowned for their security and for many working in the public sector; the full impact of the recession will not have been felt until now. Is any job ever safe and what should be our concerns when looking for a suitable career?
This axing of jobs has been met with surprise and outrage by many but why? Looking back throughout history it is evident that social change has often affected jobs; creating them, dissolving them and changing them. In trying to solve this country’s debt problem, changes are again going to have to be made.
Due to social change the textiles industry, for example, lost its importance within British industry and had dissolved within two decades. In 1850, this industry had made up 60% of Britain’s exports. In 1959, The Cotton industry Act was introduced in an attempt to help modernize and amalgamate the industry. In fact, it resulted in thousands of job losses and by the 1980’s had signified the extinction of the textile industry in the North West.
 Miners Strike, London 1984 Under Margaret Thatcher, both the Mining and the Steel industry suffered many job losses. After 1984, British mines were gradually closed and British steel merged with Dutch steel in 1988. Thatcher believed, ‘no government can do anything except through people, and people must look to themselves first’. Privatising industries in the eighties meant that many people became unemployed and although some of these industries have since been nationalised, it is fair to say that in a life time, most will experience the effects of a recession.
History then leads us to question whether we should be training ourselves for just one career or whether we should be trying to obtain many qualifications, to secure ourselves against redundancy. With the Internet becoming more prevalent in society today, it is quite plausible that many more jobs will be lost as society adapts to social change and to technology’s more efficient and speedy service.
Graduates today are having a real problem. Many employers expect evidence of an individual’s commitment to working for a certain industry and work experience is often vital. For example, students that obtain a law degree, studying for a vocational course for a minimum of three years can leave university and have no guarantee of employment, even with respective work experience. In such a competitive society, it is not effective to be suitable for different industries; it is imperative to be focused and trained for one career path. However, from studying history we can see that this is becoming increasingly dangerous in an atmosphere where even the public sector is experiencing a cut in jobs.
Tanya
Towards the end of 2008, we were asked to design and develop an employer brand for RCT Homes. The brief was challenging, budgets tight and timescales set in stone. We couldn’t wait.
Now, 18 months on, I thought it would be interesting to take a look back at what we achieved and to give people the opportunity to see what can be accomplished through clear communication between a client and an agency, to reach and better still, go beyond expectations.
At 360º, our philosophy is get to know our client and their needs from day one. We give them a complete brand health check, prodding and poking every part of the business. Sometimes it tickles and sometimes it hurts but by the end of the examination, we know how it ticks and what needs to be delivered.
In RCT Homes’ case, we spent precious time with key stakeholders – everyone from directors to tenants – to highlight the good, the bad and the indifferent about the existing brand. We were introduced to a new set of values and the vision RCT had created, and it’s worth noting that RCT had already been working hard to promote change. So, with hours of video interviews, pages of notes and every piece of existing collateral under our arms, we were in a position to develop the messages needed to build a confident, trusting and focused brand.
 Spidergrams were used to work towards a clear proposition. Thorough and honest investigation is the best way to achieve a clear and strong proposition. We use a proposition to hang every piece of communication on so that everything is consistent and supports the values at every opportunity. We eventually settled on Built on Trust. Now, this proposition isn’t a headline or indeed a line that would appear on any work. It’s role is to act as a barometer for the creative team who use it to give them guidance as they explore avenues to best promote the values of RCT Homes and build the brand.
In terms of straplines, the strongest line of all was We’re better together. This underpinned the objectives of the values as well as being a positive, and inspirational mantra.
We used existing print material to create new designs and developed templates and brand guidelines to show how the look and feel reflected the brand. At this stage, the team had to think clearly about the needs of RCT Homes; how the materials would be used and what the tone of the communication should be. Designing a brand for a diverse workforce needs clarity and a quality that everyone feels comfortable with, notwithstanding the fact that it must all be trusted and embraced as a long-term plan and not a flash-in-the-pan initiative.
We developed a graphic device to represent the coming together of the company. This device would link sets of words as well as being a symbol of positivity, something that was at the heart of the objectives.
 Linking words with the graphic 'plus sign' So, how does it all come together? Below, you’ll see the manifestation of our work for RCT Homes, from the guidelines through to print and internal design communications.
 A few pages from the Brand Guidelines  Vision and Values pack
 Vision and Values Booklet with each value explained.
 Wallet sized Vision and Values fold-out
 Launch event
With the launch completed, our next task was to start producing internal literature and looking at how we create an office environment that mirrored the brand.
 Print material, New Starter Pack  Print material Internally, we have designed branding for the offices that encapsulates one of the RCT Homes values, namely Bold by using key words to use as decals on the office windows. This acts as an impactful reminder to staff of messages that will inspire and galvanise them.
 Office Decals  Office Decals  Reception Decals Unlike many projects we work on, a branding project like this can only be successful if it is maintained. If you like, it’s a living thing and it needs to be fed and cared for in order for it to thrive. We have a responsibility to support RCT Homes to ensure the brand remains in the detail. So everything from HTML emails, internal posters and any employee scheme needs to look and taste like the brand. The brand needs to adapt to change, change that might come through initiatives or necessity. The proof that a brand is working, is when you only notice it when it’s not there.
Most of us are shareholders if we have a pension plan. Vast sums of money are invested on our behalf without a lot of input from the individual.
Money has been lost because share prices have gone down and some of these funds have suffered but in the economic climate we find ourselves could an alternative be found.
If the race for profit were not so fierce and the acceptance that profit can not rise every year, a company may be able to keep staff that would go in the endeavour to increase share price. A modest profit by a well run company should not have to mean a takeover threat and more job losses. By keeping staff everyone gains as tax receipts rise, there are more buyers for good and services and employees are not looking over their shoulders to see who will go next. The workforce would be more committed and companies would benefit.
By accepting that dividends can not be ever rising instability would be taken out of the market. There would not be the highs but there would also not be as many lows.
Badly run companies would still not survive and there would not be huge gains for speculators. A company such as John Lewis that actively engages its shareholders has a good employer brand and rising sales in a difficult market.
I accept that a company with many shareholders can not be run by them, but has anyone thought it worth consulting with shareholders to get acceptance of staff retention against dividends in this current market.
Maureen
I was at an appointment for some medical treatment and was asked if I minded a 6th former sitting in as she was on work experience. Being interested in Education, the employment market and young people’s view of the current situation I asked her what she wanted to do next. She said she wanted to train in medicine and that she had been lucky to get this placement as her mother was a nurse and put a word in for her.
She had seen the recent Panorama about the explosion of population (is Britain full?) and was concerned as to her future employment prospects.
There was no meaningful contact with Businesses; Career advice was not helpful so there was no goal to aim for. Choosing a University course (if places were available) was made difficult because of this lack of knowledge of what is needed in the workforce of the future.
Some employers do have contact with local schools, colleges and universities but this does not seem the case in a large number of schools.
We should not have to look abroad for our stars of the future, there are plenty of bright, willing young people that just need directing. As employers we must do something about this waste of potential talent. Some schools and businesses are waking up to the fact that joint ventures can be a benefit to both but there needs to be more momentum. With the internet there is a vast amount of information available but this does not seem to help in the choice of career direction. Career exhibitions do have some impact ( although a lot don’t go) but it is imperative that young people have some idea of what may be available and expected of them after education, especially if University places are not available.
If we as employers do not engage more with our future workforce then who do we have to blame if there are shortages in the skills we need?
Maureen
As you have probably noticed the Argos brand has undergone a refresh in recent weeks. 360 got the go ahead to revamp Argoscareers.com just before Christmas and the new look careers website launched on time on Friday 22 January – the day before the new Argos catalogue launch featuring the new Argos branding for the first time.
We are currently working with the HR team at Argos on a complete overhaul of Argoscareers.com which will rolled out in the next few months.
David
Tweet. Twitter. Social networking. Mini-blogging. Updates. Even if you haven’t logged into the Twitter revolution yet, you’re bound to have heard people talking about it. And talking (in text of 140 characters or less) is what Twitter is all about. Communicating with a circle of friends (known as Followers) that you can manage – for example, you can follow someone, and they can follow you. If you are following them, you’ll see their Tweets, which are their short messages, which you can access online or have sent to your mobile, if they are following you they will see your updates, which you can write on the twitter site or via your phone/Blackberry. It’s a great way of communicating quickly and concisely to the people who matter. And, with TwitterJobSearch.com now up and running, it’s increasingly being used for recruitment communication purposes.
Join the conversation today. Follow us at twitter.com/360advertising.
Kirsty
Well, yes actually. Watch this space.
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