Monthly Archives: October 2012

Rain Soaked Britain – Is Your Business Surviving?

rain soaked britain

Source: Evgeni Dinev/Free Digital Images

The climate is changing the weather has started to have a huge impact.  Extremes of weather seems to be the norm.  This winter has been the wettest on record for one hundred years and there seems to be no end to it.

It makes sense therefore that if a business wishes to survive it needs to be prepared and plan ahead for possible eventualities so that the business can return to “business as usual” as quickly as possible after a major disaster.  It is estimated that half of businesses have no effective plan in place, yet no business is free of risk of storms, fire, floods or a terrorist bomb.

Business continuity planning or disaster recovery should have five basic steps – analyse the business, assess the risks, plan and prepare, communicate the plan, test the plan.  There should be written procedures that will allow a business to get back on its feet quickly.   Having a checklist in place provides a structure for planning. Plans should detail immediate to long term responses.

An immediate response should give guidance on ensuring staff are safe eg evacuating the building, taking shelter, shutting down equipment, using fire extinguishers, administering basic first aid, calling 999.

Once staff are initially safe the short term response should include details on protecting the business eg contacting the insurance company, securing the building and valuable equipment and informing customers. As time goes by staff need to be kept informed of developments for business re-opening.

It may take some time for a business to get back to normal after a major disaster.  Businesses may need to consider long term support requirements eg providing traumatised staff with psychological support.

After an emergency the business continuity plan needs to be reviewed for successes and failures making amendments and improvements as appropriate.  Whilst disasters cannot be avoided, with careful planning the impact can be minimised.


My Train Has Been Cancelled Again! What the Train Companies Can Learn from Workforce Planning

A recent announcement by London Midland trains related to a substantial cancellation of train services on the Northampton to Birmingham line.  This is due to a lack of qualified drivers caused by several factors.  It takes on average twelve months to train a driver but driver retention is poor due to crippling shifts.  Despite the attractive salary, high train driver attrition demonstrates that money is not always a motivator.

The planned need to look at staff rotas may help the problem in the short term, however, a longer term solution needs to be found in order to ensure the problem does not occur in the future.

The strategic initiative of workforce planning would allow the train company to plan well into the future, five years  ahead at least.  Future demand and supply of staff is key.  Planning will help to identify any shortfalls so that staffing gaps can be plugged, therefore, workforce planning provides the right people at the right time with the right skills.  Workforce planning can include the implementation of succession planning, flexible working, skills audits, talent management, multi-skilling and role design to name a few processes.  Ideally it should run alongside development of the long term business plan, which most forward-thinking companies undertake.  

Within the plan, data needs to be organised for recruitment (numbers and levels), training, learning and development, organisation structure and deployment.

Organisational strategy can be an internal driver.  However external drivers can be customer and stakeholder expectations and changes in market forces to name but two.  In the long term the government has plans to develop the rail service to meet increasing customer demands, so train companies need to rise to the challenge with their workforce planning.

The implementation of workforce planning need consensus from all key stakeholders with key responsibilities outlined.  Managers need to be actively supported as they contribute to the process.  Regular reviews and amendments are required.  The process should be a continuous cycle to ensure future people needs are met.

London Midland Train Cancellations
Further Train Cancellations

Why Bother About Equal Pay?

The recent high profile case where 170 women have been given the right to take an equal pay case against Birmingham City Council brings equal pay firmly in the spotlight.  The workers, mainly women who worked in traditionally-female roles, such as cooks, cleaners and care staff won the right to seek compensation in the civil courts for missed  bonuses.  The women were among workers who had been denied bonuses which had been given to staff in traditionally male-dominated jobs such as refuse collectors, street cleaners, road workers and grave diggers. For example, the annual salary of a female manual grade 2 worker was £11,127, while the equivalent male salary was £30,599. The men received a bonus of up to £15,000 per year. 

Usually such claims have to be made within six months leaving a job in an employment tribunal, but the Supreme court has over ruled that principle in this case.  These employees now have six years to raise a claim with the potential for a £2 million payout. They are likely to win and cost Birmingham City Council many millions of pounds.  This “landmark” judgement could have huge implications for potentially thousands of other workers including in the private sector.

This case is remarkable given the existence of over 40 years of equal pay legislation.  In 1970 the Equal Pay Act was brought in following a fight by women sewing machinists employed by Ford to stitch the car seating who were paid much less than their male equivalents who assembled the cars.  Whilst the men and women did different jobs, the value of their jobs was deemed to have the same demands in terms of effort, skill and decision-making ie work of equal value.  This and equal work underpins equal pay legislation.  Equal work can be the same or broadly similar (known as like work) or different but equivalent (known as work rated as equivalent).  However men on average are paid more than 10% more than women. 

Organisations that want to pre-empt claims being laid at their door need to start thinking how to head off such claims.  One way would be to undertake an equal pay audit.  The EHRC provides a toolkit which is a guide for employers carrying out an equal pay audit.  It is designed for businesses with over 50 employees. It helps carry out an equal pay audit related to gender, race, disability or working patterns.  Equal pay audits are recommended in the Code of Practice on Equal Pay.

Another alternative would be to undertake a job evaluation process across an organisation to identify areas of weakness to review and correct.  Job evaluation is the systematic evaluation of the worth of jobs in relation to other jobs in an organisation.  An analytical job evaluation scheme provides a good defence in an equal pay claim whereas a non-analytical scheme such as job ranking or job comparison would not provide the same defence as it is based on subjective opinion.  Therefore a factor comparison scheme such as NJC job evaluation or Hay would provide robust defence. 

What Type of Contract does an Apprentice Need?

Modern apprenticeships involve the worker; the employer; and a training provider.   An apprentice is an employee and benefits from all related rights, such as the right to claim unfair dismissal and protection against discrimination.  Apprentices are entitled to full employment rights including holidays, rest periods and sick pay. An apprentice will be entitled to basic particulars of employment just like all other employees.  The parties should agree the key terms, such as the duration, pay, training aspects and any other general policies that are applicable.  Basic rates of pay are set by the government on an annual basis, however, employers can pay more.  Apprentices can only be made redundant in cases where the workplace completely closes.  Apprenticeships will typically be for a fixed duration. This can range from a number of months to several years, depending on the time reasonably needed to acquire the skills or qualification in question.  

Before April 2012 the written agreement between an employer and an apprentice was known as a contract of apprenticeship.  A contract of apprenticeship is governed by common law and the primary focus is on the apprentice’s training rather than the job. It involves greater responsibilities and liabilities for employers than ordinary contracts of employment. Apprenticeships are generally for a fixed term and apprentices are protected against premature termination of the contract of apprenticeship. Termination before the apprentice is qualified can result in enhanced awards for unfair dismissal which may include compensation for loss of wages, loss of training/ trade and loss of status.

In April 2012 the implementation of the Apprenticeships, Skills, Children and Learning Act 2009 brought in the requirement for a prescribed form of contract. The relationship is now one of a contract of services rather than a contract of apprenticeship.  The Act also introduces minimum hours of work and learning for apprenticeships. The apprenticeship agreement can be in the form of a written statement of particulars under the Employment Rights Act 1996; or a document in writing in the form of a contract of employment or a letter of engagement.
Existing and new contracts of employment between the apprentice and the employer must include a statement setting out the skill, trade or occupation for which the apprentice is being trained under the apprenticeship framework.   Without an agreement in place the apprentice cannot be issued with an apprenticeship certificate.
Whereas previously it was very difficult to dismiss an apprentice early, under the new legislation and with a contract of employment in place, provided the employer follows a fair procedure giving appropriate notice, this will not amount to unfair dismissal and breach of contract.
It is important to get the wording of these apprentice contracts correct, if the new provisions are to apply and to avoid potential costly employment tribunal claims. 

Seven Top Tips for Managing Redundancy

1. Ensure the redundancy is genuine

An Employment Tribunal can investigate whether the redundancy is genuine, ie the real reason for dismissal so do not be tempted to dress up a performance or capability dismissal as a redundancy. This could result in a finding of unfair dismissal.  Assess if you could avoid making redundancies by considering whether cutting overheads or restructuring via salary cuts, shorter working weeks, job shares or unpaid sabbaticals could save jobs.  You could also consider whether this is a situation where you can offer voluntary redundancies.

2. Ensure you follow your own redundancy procedures

If you have a company redundancy procedure, make sure you follow it.

3. Ensure you have you worked out your pools for selection

Ensure the proposed restructure is set out so it is clear from which departments or groups of employees redundancies are being made.  Consider which jobs are at risk and identify the groups of employees where the redundancies will be made (the pool).  Where there are a number of redundancies, you may need to make redundancies from several pools.

4. Ensure selection criteria for redundancy is fair and objective

The selection criteria must be capable of measurement and must be non-discriminatory. Reflect the needs of the business when selecting who is to be made redundant.


5. Ensure you consult correctly

Consultation should be meaningful and proper. Once you have identified which employees are at risk of redundancy, they should be advised of this and told the length of the consultation period; this will vary depending on the proposed number of employees possibly being made redundant.  It is important to include employees on long-term sick leave or maternity leave in all consultation discussions.  

Consultation is a two-way process and this is also an opportunity to explore alternatives to redundancy and discuss possible suitable alternative employment.  Hold face to face meetings giving the right to be accompanied.   


6. Ensure you correctly calculate redundancy payments

Don’t forget to work out the cost of contractual notice or payment in lieu of notice and redundancy payments. Statutory redundancy payments are based on length of service, age and salary, subject to a current statutory cap of £430 a week. If the employee earns less than this then you calculate the figure based on gross actual pay.  Check employees’ contractual, policy and custom and practice rights to redundancy payments as there may be a right to enhanced redundancy payments.  Untaken holiday also need to be calculated and paid.

7. Set up a Dismissal Meeting

If compulsory redundancy can not be avoided organise a dismissal meeting and confirm in writing giving the right to be accompanied.  Confirm the decision to terminate employment during the meeting giving the right to appeal with clear instructions for doing so in accordance with your procedure.   Confirm in writing. 

The Rise of Home Working

Over the last few years there has been a huge growth in the numbers of people working from home or remotely.  This has been caused by the increased use of high speed broadband, Skype, laptops, tablet computers and hand held devices facilitating the ability to work wherever we like.  One in twelve people now work at home on either a full time or part time basis.  The top 25 home office hot spots are all in the South East.  The Office of National Statistics Labour Force Survey shows that 2/3 of home workers are men.  
A challenging economy has also forced employers to cut back on costs, such as office expenses, and let people work remotely. There’s also evidence that others, who haven’t been able to find jobs, are earning a living by starting a home-based business.  Furthermore home working contributes to the “green” economy and the carbon footprint with less polluting cars on the road. 

There are many advantages to this type of working, which we can all recognise; the work-life balance is much improved without the stress of struggling to work every day on the congested road and increasingly disorganised rail systems.  So much time is saved by not having to get up at the crack of dawn to get to the office on time and exhaustion is a distant memory as we leisurely wake up, eat a decent breakfast in the comfort of your kitchen then get the kids to school before sitting down to the computer to start the working day either in a spare bedroom or bespoke office in the house or garden. 

As long as we meet our targets and maintain our usual output, the hours we work need not be fixed if our work (and where relevant our manager) dictates, so that by working flexibly we have the time to do that bit of shopping or attend that dentist appointment during the day.

Having set up and completed a risk assessment on the work area to comply with health and safety what could be easier than working from home?

The reality is, however, that it doesn’t suit everyone.  Working from home can be very isolating.  How many of us actually see our neighbours and friends during the day now – they are all out at work!  Being alone day after day with no social interaction can be very lonely without that “over the photocopier” chat, gossip with the tea-lady or the office Friday pub lunch where we can look forward to the weekend. 

For those individuals prone to depression working from home can become a nightmare with the distinction between work and home becoming a blur. 

The saying “out of sight out of mind” might apply with a perception of being ignored by the company, if we are an employee, can set in, only getting the odd phone call to check that performance targets have been reached and to find out when the monthly figures will be sent in.  In such circumstances a feeling of de-motivation and being under-valued can occur and lead to a drop in performance.

Working from home is ideal for self-starters who can discipline themselves to work set hours so that there is a clear distinction between work and home.  Line managers of such individuals have to have the experience and skill to be able to manage at a distance and understand the issues that arise.

First and foremost, the type of work needs to be adaptable to home-working such as administration, freelance interviewing and sales.

The company needs to ensure there is a home working policy in place that covers issues such as health and safety, equipment safety, data protection, communication and performance management. There should be consideration to having a home working checklist.  These documents should be communicated well to the workforce with clear procedures in place.

The line manager needs to be able to encourage team interaction by organising team meetings at a single location on a regular basis to provide valuable information on what is happening within the business, eg and training & promotional opportunities.  Perhaps video conferencing could replace physical group meetings when these are not possible.  Such get-togethers should be supplemented by phone calls and emails to keep in touch. 

The line manager needs to be able to communicate clear goals and the standards expected within the home-based role and be equipped with the tools for measurement and assessment of work quality to ensure that everything is satisfactory.  Training for line managers in managing home-workers should be considered.

Security of information and data protection should be a high priority.  A decision should be taken whether to give remote workers full or controlled access to network links using an IT security risk assessment.  The issue of company laptops with encryption software, for example, would reduce the possibility of disaster with important corporate documents getting mixed up with the children’s homework or theft from the boot of a car.

Also the installation of virus protection and guidelines on authorised use of additional software and prohibition of USB sticks and floppy discs to transport data should be essential.

Information on using secure servers and taking daily back ups should be incorporated into an IT security policy both for remote (and office) workers giving details on not sharing passwords, not opening suspicious email attachments and visiting work-related websites only.  Clear instructions for not modifying any company spreadsheets and macros without authorisation can also help to provide guidelines on what is acceptable IT use. 

Companies considering implementing home or remote working should think about running a pilot scheme to see if it is feasible and practical for business and individual needs before making a commitment.    

Employee-Owner Employment Contracts

The Chancellor,George Osborne MP, announced on 8 October 2012 plans for a new kind of employment contract called an employee-owner.

New employee-owners will exchange some of their UK employment rights for rights of ownership in the form of shares in the business they work for, any gains on which will be exempt from capital gains tax.
Companies of any size will be able to use this new kind of contract, but it is principally intended for fast growing small and medium sized companies that want to create a flexible workforce.
Under the new type of contract, employees will be given between £2,000 and £50,000 of shares that are exempt from capital gains tax. In exchange, they will give up their UK rights on unfair dismissal, redundancy, and the right to request flexible working and time off for training, and will be required provide 16 weeks’ notice of a firm date of return from maternity leave, instead of the usual eight.
Employee-owner status will be optional for existing employees, but both established companies and new start-ups can choose to offer only this new type of contract for new hires. Companies recruiting employee-owners will continue to have the option of inserting more generous employment conditions into the employment contract if they want to.
Legislation to bring in the new employee-owner contract will come later this year so that companies can use the new type of contract from April 2013. The Government will consult on some details of the contract.
Legislation will bring in this new type of contract later this year so that it will be implemented during April 2013.