BBC plans £140m in savings by restructuring HR divisionOn 27 Feb 2001 in Personnel Today The BBC estimates that the creation of a single HR divisionwill help the corporation save £60m within three years.Speaking at an internal briefing to staff earlier thismonth, director-general Greg Dyke claimed that these changes coupled withreducing support functions in marketing and comm- unications will contribute 41per cent of the corporation’s target of £146m in savings. The individual HR teams associated with each BBC directoratehave merged into one HR division, as reported in Personnel Today last month.Within this division, there will be 35 HR managers overseeing all the BBC’sdepartments in the UK.Russell Grossman, the BBC’s internal communications manager,said, “This is a sensible level of HR for the BBC. We now have an appropriateHR and internal communications division to support a more creative BBC. This isnot about costs.”Russell also explained that the internal communicationscampaign to convey Dyke’s organisational changes has been succ- essful.Although he added, “There is more that needs to be done. We need moreface-to-face communication between senior managers and their teams.”The BBC plans to cut a total of 1,000 jobs, with 268 lost so far this year. Of those, 80 percent have been voluntary redundancies, and will result in savings of £21m bynext year. Previous Article Next Article Comments are closed. Related posts:No related photos.
Previous Article Next Article Comments are closed. HR vital to Camelot staff moraleOn 6 Mar 2001 in Personnel Today Camelot’sHR team played a critical role in the company’s successful bid to continueoperating the National Lottery. SteveThompson, Camelot’s HR director, said one of the greatest challenges wasmaintaining staff morale during the period of uncertainty from August – whenthe People’s Lottery was the favoured bid – until last December.Thompsonsaid, “It’s been a roller-coaster ride for the staff in the period leading upto the Lottery Commission’s decision to grant us the licence in December.“At least800 employees were facing redundancies, but we maintained morale by developingthe loyalty of the workforce.”Camelot’sHR strategy was to retain its staff until the end of the licence period inSeptember 2001. A loyalty scheme promised to double notice payments to staff,in the event of it losing the licence. A win bonus was also offered. Informationon redundancy packages was filtered through the company using verbal cascades,with nominated managers having face-to-face briefings with staff. The HR teamalso used focus groups within the company to communicate new developments. He said,“We had lots of briefing sessions before we won the bid at Christmas. It wasvital that our workforce heard about their situation before it was broken inthe media.” DianneThompson, Camelot’s chief executive, paid tribute to the HR team. She said,“Our HR department played a critical role in developing and implementing acomprehensive internal communication strategy to ensure that all staff knewwhat was happening.”DianneThompson will be speaking at Richmond Events’ HR Forum on the cruise shipOriana, 3-6 May Related posts:No related photos.
Previous Article Next Article HR acts to lessen toll of despairOn 18 Sep 2001 in Personnel Today Related posts:No related photos. HR professionals across the world are picking up the pieces following theterrorist attack on the World Trade Center in New York which saw thousands ofstaff killed. As the human tragedy unfolded, HR teams were immediately faced with theenormous task of tracking down staff, updating staff and loved ones on thelatest information and providing support to distressed colleagues. John Reid-Dodick, global director of HR at Reuters, told Personnel Today itstarted tracking its 18,000 staff in 190 countries almost immediately to workout which of them were in New York. He said, “We contacted all HR directors in Europe, Japan and AsiaPacific and coordinated with senior teams to track people who weretravelling.” Of its 300 staff at the WTC, six remain missing. It took investment bank Morgan Stanley, the largest tenant at the WTC,several agonising days to track down its 3,700 staff. Staff at its DiscoverCredit Card call centre fielded 50,000 calls around the clock from peoplegiving or seeking information on loved ones. Communication with staff, family and friends has also been key. Global headof HR at Pricewaterhouse Coopers, Clive Newton, explained that the company hasset up websites and call lines for people to find out if their friends andcolleagues are safe. PWC has employed grief counsellors and set up a helplinefor staff and their families. Lance Richards, an international HR consultant based in the US, said,”It changes everything – how people travel, how they work and whether theywill want to work outside the US.” By Lisa Bratby SHRM responds to human tragedyAmerican HR representative body the SHRM has reacted swiftly to the tragicevents in New York and Washington by releasing guidelines for HR professionals.It has removed the password protection from its website so concerned people canaccess its “HR responds to terrorism” web pages.In addition to offering extensive practical advice and information, SHRMalso has several experts on hand to discuss the employer’s role in helpingemployees come to terms with the atrocity.The site includes an article by Dr John Sullivan advising how HR shouldreact in the aftermath of a terrorist attack and provides information on crisiscommunication letters.www.shrm.org Comments are closed.
Previous Article Next Article Inthe third and final article in his innovation masterclass series, ProfessorAmin Rajan focuses on ‘eureka’ creativity – highlighting HR’s role in measuringand rewarding its positive impact on business The first article in this series identified four kinds of creativity –structured, non-linear, provoked and eureka. It argued that creativity canresult in product, process and organisation innovations, as new ideas getconverted into profits. The type that is easiest to “measure” is eureka. It impacts onproducts and services and produces breakthroughs that mark a radical departurefrom the norm. It’s possible to assess its business worth through a number of standardisedratios that are widely used in benchmarking exercises across industry. To startwith, when assessing the market value of any organisation, many investmentanalysts use the simple formula shown below. Book value relates to the physical and financial assets that can bequantified. Intangibles, on the other hand, are more observable than measurable.They are also among the areas that are most affected by process andorganisational innovations. Respondents to Create’s survey across all regions identified a number ofproxy indicators of assets where they expect the impact of creativity to show,directly or indirectly. Direct measures Those used in the UK include: – The proportion of income from new product introductions – Number of new product innovations – Average length of time for product design and development In other regions, the same direct measures are used. But some go further – In Latin America the number of multifunctional teams is used as a measure – In the Middle East and Africa they look at the five-year trend of productlifecycle. Indirect measures Direct measures have one major limitation – they focus on productinnovations and ignore the benefits of process and organisational innovations.As a result, a number of indirect measures are also used in ways that havemajor implications for the HR function. They focus on four distinct classes of intangible assets that are commonlylinked with the creativity process (see box below). All the regions show a close similarity in the nature of measures used undereach asset class. Overall, in the UK and the rest of Western Europe, overtmeasures like patents and proprietary know-how are used more widely. Elsewhere,the intangibles such as trade secrets are more prevalent. The fact that most the asset classes are not easily measurable does notdetract from their importance. Today, for example, 92 per cent of the marketvalue of Microsoft and 85 per cent of Coca-Cola is accounted for byintangibles. Nearer home, in 1975, the intangibles comprised 4 per cent of themarket value of FTSE 100 companies. Today, that proportion has leapt to 44 percent, according to Create’s research. Reputable companies that are as diverseas BP, Barclays, GSK, Lloyds TSB, WPP and Vodafone have over 50 per cent oftheir value locked into intangible assets. Of course, given the way the formula on market value is structured, the bulkof the day-to-day gyrations in the market value are reflected in theintangibles. This is because the book value of a company does not fluctuatenoticeably from one year to another. But that does not detract from the fact thatthe underlying trend in the worth of intangibles has been upward over the last25 years. The implication is clear. Creativity pays – it increases the marketvalue as well as the bottom line. HR’s crucial role Against this backdrop, what is the role of HR in promoting creativity? Itcan and must do three things. 1. It needs to audit the existing culture of its organisation. Create’sstudy has identified over 50 tools that can be used to influence businesspractices that collectively constitute corporate culture. More than half ofthese practices come directly under the influence of HR. 2. HR needs to understand how the market value of its company is determined.In particular, it needs to see itself as a value creator because all the HReffort goes towards creating one or more of the four asset classes. In ourresearch, we were surprised that even corporate accountants played a moreprominent role than HR professionals. Specifically: – So few HR professionals were involved in the overt creativity process oftheir organisations, and – Even fewer recognised their role as asset creators 3. HR needs to challenge the existing reward systems. The research showsthat the best way to reward creativity is by offering three sets of incentivesthat enable employees to cope with an environment beset by rules and procedures(see below): – An employer brand that makes people feel they are part of a winning team – Autonomy and space within a stretching job – Hard and soft rewards – money and non-money Fresh challenges Not surprisingly, the study concludes that the current wave of globalisationcan be a golden age for HR. As the City accepts the importance of intangiblesin measuring the market value of a company, all manner of fresh opportunitiesbeckon HR. Asset classes resulting from creativityMarket assets – Repeat business – Customer loyalty – New products – New services – Company name Aim: to raise the bottom line Intellectual property assets – Proprietary know-how – Patents – Trademarks – Design rights – Proprietary software Aim: to sustain a high performance Cultural assets – A can-do culture – Employee competency – Visionary leadership – Employer-employee relations – Alliances and collaborations Aim: to create a climate for breakthroughs Physical assets – IT systems – Management processes – Financial systems Aim: to improve the delivery platform Rewarding creativityIn particular, personal recognition, financial reward and psychic benefitsare – or are becoming – important motivators in all the regions, irrespectiveof national cultures. After all, globalisation has ensured that, like all else,motivation carries its own price tag. Notably, fun at work does not featurehigh on the agenda, except in Latin America, reflecting the ever rising workpressures elsewhereAmin Rajan is chief executive of Create. Contact: 01892 526757Harnessing Creativity to Improve the Bottom Line is available from TheChartered Institute of Management Accountants. Contact Chantal Masters 020 7969 3407 The eureka effectOn 18 Dec 2001 in Personnel Today Comments are closed. Related posts:No related photos.
Comments are closed. Previous Article Next Article One size does not fit allOn 1 Mar 2002 in Personnel Today TheCentral Arbitration Committee now has more than 50 union recognition disputesunder its belt. David Morgan looks at the trends emerging from its decisions,and an important new ruling on its discretionThe statutory regime for compulsory trade union recognition has been runningfor nearly two years and the Central Arbitration Committee that adjudicates inrecognition disputes has issued more than 50 decisions. The majority have dealtwith preliminary issues concerned with admissibility of the union’sapplication. To have an application accepted, the union must establish that atleast 10 per cent of workers in the proposed bargaining unit are members andthat the majority of workers in that bargaining unit would be likely to favourcollective bargaining. After allowing the application, the CAC has to assist the union and employerto reach agreement on the appropriate bargaining unit within 20 working days.If agreement cannot be reached, the CAC has a statutory duty to decide thematter. Deciding on the appropriate bargaining unit comprises the most criticalfunction of the statutory regime. A union’s application may stand or fall onthe scope of the unit. With larger bargaining units, it becomes less likelythat the union will enjoy a majority support for recognition, or even meet the10 per cent threshold test. Experience has shown that, more often than not, aunion will withdraw its application if the proposed bargaining unit is held notto be appropriate. What is appropriate? The CAC’s overriding consideration is that the unit should be compatiblewith effective management. It will also take into account other, possiblyconflicting, factors. While CAC decisions do not have binding effect as legal precedents onsubsequent cases, recent decisions reveal certain trends in its approach tothese tests. Clearly the CAC will treat compatibility with effective managementas of paramount importance. Further, it is generally reluctant to interferewith an employer’s existing bargaining arrangements and attaches a great dealof importance to them. An employer’s preference tends to be for a larger bargaining unit, oftenencompassing the entire workforce, for two reasons. First, it dilutes unionmembership and, second, decisions on pay, hours and holidays and other termsand conditions are taken at board or national level in most companies. However, very few CAC decisions have favoured this “whole company”approach. In Benteler Automotive UK and the ISTC (TUR 1/4/2000), one of thefirst significant cases to come before the CAC, the union proposed a bargainingunit comprising weekly-paid shop floor employees, excluding monthly-paidtechnical, supervisory and administrative staff. The company argued that the proposed bargaining unit would split theworkforce and impede effective management, hampering the company’s teamworkingphilosophy and vision. It also argued for a whole-company approach to thebargaining unit as it already had a works council operating across the companyfor communication and consultation purposes. In the event, the CAC based its decision on the reality of existingmanagement organisation in the company and ruled in favour of the bargainingunit proposed by the union. The CAC considered that the whole-companyphilosophy suggested by the company was, as yet, an aspiration. The bargainingunit proposed by the union more accurately reflected the characteristics of theworkers involved. Multi-site organisations Significantly, the Benteler decision involved a company operating at onlyone establishment. In subsequent cases, the CAC has had to determine the appropriatebargaining unit in businesses operating on several sites. In one of the fewdecisions favouring the employer’s whole-company approach to the bargainingunit, the CAC considered the multi-site operation in the application of TGWUand Gala Casinos Ltd t/a Maxim’s Casino Club (TUR1/119/2001). In that case, the union sought recognition for all gaming employees at oneof the company’s London casinos. Supporting its application, the union arguedthat the particular casino had a distinct profile within the group company.There were different rates of pay at the location, and distinctions in thenature of the work compared with other parts of the business, particularly thebingo division. The employer argued primarily that as all decisions on pay, hours andholidays were taken at board level within the group company, the appropriatebargaining unit should comprise all employees, or at least all those in itscasino division. The CAC had little hesitation in concluding that the bargaining unitproposed by the union would not be compatible with effective management. Giventhat the company operated 26 casino premises and another 170 bingo clubsthroughout the UK, fragmentation was a decisive factor in the CAC’s reasoning.It took into account the existence of common terms and conditions of employmentand pay scales throughout the casino division. It held that separate bargainingunits at local level would be fragmentary and could invite numerous otherbargaining units composed of employees subject to the same terms and conditionsof employment. In TGWU and Kwikfit (TUR1/126/2001), the union sought recognition for aproposed bargaining unit comprising the two London divisions (made up of 110centres) of a company with 646 centres in the UK. The company argued that allemployees shared a common employee handbook, training, career ladder, hours ofwork and holiday entitlement. It also emphasised the integrated and centralisednature of its operations, arguing that a fragmentation of bargaining units inLondon would inhibit the flexible movement of labour. On the other hand, theunion made reference to the London weighting allowance and a trend ofdecentralisation of collective bargaining in the industry. In this case, the CAC did not consider a bargaining unit covering the wholeof London to be fragmented given 20 per cent of the company’s employees werebased there. While the CAC accepted the company operated centrally and applieduniform policies and procedures across all sites, it considered that otheraspects of the business, such as the relative autonomy of divisional directorsmeant that dealing with other matters (including collective bargaining) at theLondon division level would not be incompatible with effective management. Freedom for discretion However, last month, the High Court of England overturned this decision onjudicial review and remitted the case back to a freshly constituted CAC forre-hearing. While the full case report has yet to be published, we understandthe court held that a proposed bargaining unit could not trump other moreappropriate bargaining units and that the CAC had erred in its approach to itsdiscretion in this regard. Despite the fact that the employer and the union arecalled on to propose an appropriate bargaining unit, the CAC should be free tohold that a different unit is more appropriate. That discretion must beexercised reasonably. With no formal right of appeal from a CAC decision and the reluctance ofcourts to interfere with the CAC’s discretion, employers must get their viewsacross forcefully and correctly at the CAC. For unions, too, the choice is crucial. If an approach fails, the union isbarred from bringing another application for the same bargaining unit for threeyears. David Morgan is a solicitor in the employment law unit of McGrigorDonald. He successfully represented Gala Casinos before the CAC in London Compatible with effective management?The CAC will take into account thefollowing:– The views of the employer and of the union.– Existing national and local bargaining arrangements.– Avoiding small fragmented bargaining units within anundertaking.– The characteristics of workers falling within the proposedbargaining unit and any other employees of the employer whom the CAC considersrelevant.– The location of workers.– Section 19(4) of Schedule A1 of TULR(C)A 1992.Dealing with recognition applications– Make sure the union has correctlydesignated the employer. The rules provide that an application must be levelledat the company employing the workers, not, for example, a trading name.– Do not forget Acas. There is a technicality in the rulesstating that, if the employer proposes Acas assistance or involvement duringthe first 10 days of the 20 day negotiation period and the union declines theoffer, the union will be barred from proceeding with the matter at the CAC.– Unions will often petition the workers in their proposedbargaining unit to ascertain their likely support for recognition. Employersshould seek an independent confidential audit of membership under the auspicesof the CAC or Acas. – Choose the bargaining unit carefully. Remember that while awider unit may dilute union membership, if unsuccessful, you may end up withrecognition in a larger group than originally proposed. – Empower your staff consultative forum and ensure decisionsare taken at the appropriate level, preferably across the company.– In a multi-site business, retain contractual mobility andflexibility provisions in the contract of employment. A flexible workforce willadd weight to an argument that localised bargaining units will lead tofragmentation.– As the CAC need not follow the bargaining units proposed byeither party, employers should consider putting forward more than one alternativebargaining unit. Related posts:No related photos.
Taxing questionsOn 2 Apr 2002 in Personnel Today Comments are closed. Asnew tax regulations on company cars come into force, Simon Kent urges firms totake stock of their fleets and ensure they are being used in a cost-effectivewayWith new company car tax regulations being introduced on 6 April, there hasnever been a greater need for organisations to get to grips with their fleet.In the new tax year, organisations need to consider the CO2 emissions producedby their fleet to determine whether drivers are using suitable vehicles and,indeed, whether those vehicles are supplied in the most cost-effective way. Currently, the benefit in kind value of a company car on which an employeepays tax depends on the number of business miles travelled. Drivers clocking-upover 18,000 miles a year pay tax on 15 per cent of the vehicle list price,while those driving under 2,500 miles pay 35 per cent. The system equates longdistance with use of car as a business tool and therefore penalises longdistance drivers less. The new regime, revenue neutral for Inland Revenue andenvironmentally driven, will link the benefit in kind value to the vehicle’sCO2 emissions. Cars emitting levels of CO2 at 165g/km will be taxed on 15 percent of list price, rising by 1 per cent for every additional 5g/km ofemissions to a maximum of 35 per cent. Changes to the rules Toyota’s Jon Pollock explains that under the existing rules, a Lexus IS200E, with a list price of £20,050 and travelling under 2,500 miles a year, isliable to a 35 per cent benefit in kind charge, which for an employee payingtax at 40 per cent would mean an annual bill of £2,807. In the next tax year,the same car will result in a bill of £2,165, since CO2 emissions of 229g/kmattracts a lower charge of 27 per cent. Take the same car with higher mileage and you have a different story.Currently the 40 per cent tax payer is taxed only £1,203 for the car – 15 percent of list price. The new £2,165 tax bill therefore represents an increase of80 per cent. Moreover, with CO2 linked percentages due to rise by 2 per centper year, the high-mileage driver’s tax bill will have doubled on last year’scost by 2004-05. In general, the new tax scheme means drivers completing under 2,500 businessmiles per year will be better off, while those over 18,000 will be worse off.Drivers in between these distances will win or lose according to car driven,income tax paid and miles completed. One way to tackle the tax increase is to avoid it completely. Under a ‘cashfor cars’ scheme, the employer adds the financial value of running the companycar to the employee’s salary and leaves them to sort out transportarrangements. Unfortunately, this may not always result in a saving. According to HSBC,the total annual cost after tax for a company to provide a Ford Mondeo 1.8 LX,driving 3,000 business miles per year, will be £3,238 in the next tax year.Delivering the same car through a cash scheme would cost the company anadditional £358 to compensate for employee’s taxes and the higher cost of aPersonal Contract Purchase (PCP) scheme compared to company contract hirepresuming no additional cost by the employee. In spite of this, some leasing companies – such as Lex Vehicle Leasing –promise to convert company car fleet contracts into PCP schemes while maintainingthe same cost and service levels. The individual employee becomes responsiblefor the car, but a full maintenance and service plan is provided. In this waythe employee avoids paying tax while the organisation is still guaranteed afully functional fleet. Any cash for cars plan needs careful consideration as to how employees willreceive their cash – one lump sum for the year or broken into monthlyinstalments. It must be remembered that the employee now has continuedresponsibility for the car for the duration of the purchase or hire plan takenout: “If the employee is made redundant the car becomes theirproblem,” says Graham Biggs of BMW. Philip Jerome, sales and marketing manager at Zenith, notes there can beserious legal problems with any scheme which places the vehicle into employeerather than company ownership. “If the employee has an accident while onbusiness, that is not their problem, it is the organisation’s,” he says.”Any benefit you make through cash for cars would be quickly outweighed bya serious lawsuit if the appropriate insurance is not in place.” Move to diesel Another option already having an impact in the market is to move to diesel.Generally delivering a lower CO2 emission level, such vehicles attract a 3 percent surcharge due to other engine emissions (particulates, nitrogen andsulphur dioxide). This surcharge falls as CO2 levels rise. Therefore, a lowemission diesel (165g/km) attracts 15 per cent tax plus 3 per cent surchargewhile at 255g/km the tax reaches 33 per cent and the surcharge falls to 2 percent. At 35 per cent emission tax there is no surcharge. “Over the past 12 months we have seen the switch to diesel,” saysTim Holmes of HSBC Vehicle Finances. “In 2000, 20 per cent of the vehicleswe delivered were diesel. Last year, it was about 50 per cent.” The diesel option has become popular thanks to improvements in diesel enginetechnology. At the same time, fuel economies delivered by these vehicles meanthat, after a certain level of personal mileage, the additional cost paid bythe employee in tax will be outweighed by gains achieved through increasedmiles. Ultimately it is likely that rather than delivering a single policy for all users,organisations will have to create a range of options to match the range ofcars. However, if the company car pool is to be maintained over a number of years,it will be in the company’s interest to invest in lower emission vehicles nowwhich do not mean compromising on model or performance. “From the companyperspective, if employees drive cars with lower emissions, the tax bills willbe lower and the company’s travel bill will come down as well,” saysPhilip Jerome. The new car tax regime– Employees will be taxed accordingto income bracket (22 per cent or 40 per cent) on a percentage of list price(P11D value) according to the vehicle’s CO2 emissions. Tax starts at 15 percent for cars emitting CO2 levels of 165 g/km and rises by 1 per cent for everyadditional 5g/km of emissions to a maximum of 35 per cent.– Diesel cars attract a 3 per cent surcharge due to otherengine emissions (particulates, nitrogen and sulphur dioxide). Surcharge fallsas CO2 levels rise – therefore, a low-emission diesel (165g/km) attracts 15 percent tax plus 3 per cent surcharge. At 255g/km the emission tax reaches 33 percent and the surcharge falls to 2 per cent. At 35 per cent emission tax thereis no diesel surcharge.– Authorised Mileage Rates (how much an employee can bereimbursed tax-free for using a personal car for business purposes) arestandardised, regardless of engine size. The first 10,000 miles is reimbursedat 40p per mile, subsequent miles at 25p.– The percentage of list price to be taxed is set to increaseover the next two years. Organisations should be aware that the effect oftaxing CO2 emissions will grow in the future and not stay constant.– Tax calculators and comparisons between company cars and cashfor cars can be made through www.cartax.co.uk (Deloitte & Touche) or www.lvl.co.uk (Lex Vehicle Leasing).– CO2 emission figures for vehicles can be found at www.vcacarfueldata.org.uk– The Rough Guide to Company Cars – published this year by Rough Guides inpartnership with the BBC’s Top Gear Magazine and sponsored by Lex VehicleLeasing – contains everything you have ever wanted to know about company cars. Previous Article Next Article Related posts:No related photos.
Comments are closed. Previous Article Next Article EOC issues five-step guide to pay equalityOn 16 Jul 2002 in Personnel Today The Equal Opportunities Commission (EOC) has published a guide givingdetails of the five steps employers need to take to ensure they are notshort-changing women. The EOC’s Equal Pay kit – a step-by-step guide for employers on how toreview their pay systems – was officially launched last week by women’sminister Barbara Roche. Speaking at the launch, Roche said: “This kit is an essential tool foremployers who take equality seriously. I hope that carrying out an equal payreview will soon be seen as good business practice for every employer. “The sooner that happens the sooner women will be able to feelconfident their contribution at work is valued.” Julie Mellor, EOC chairwoman, said progress towards closing the equal paygap is extremely slow. She challenged employers to lead the way on equal pay bymaking a commitment to holding equal pay reviews. “We know the majority of employers don’t deliberately discriminateagainst women. EOC research found that 93 per cent of employers were confidentthey paid fairly, but few had checked their pay system for bias,” shesaid. “Pay systems are complex and it is too easy for discrimination to creepin, as recent EOC cases demonstrate. This kit will make it easier for employersto carry out a pay review. This is the only way they can be sure their paysystem is fair.” The five steps are: – Deciding the scope of the review and identifying information required – Determining where men and women are doing equal work – Collecting pay data to identify equal pay gaps – Establishing the causes of any significant pay gaps and assessing thereasons for these – Developing an equal pay plan www.eoc.org.uk Related posts:No related photos.
Global newsroundOn 1 Oct 2002 in Personnel Today Related posts:No related photos. Comments are closed. MikeBroad reports on what’s happening in HR around the worldUKstaff are less loyal to employersEmployeesin the UK are significantly less committed to their employers than in othercountries, claims research.Astudy by International Survey Research shows that fewer than six out of 10employ-ees want to stay with their current employer. Theresearch called UK plc: leader or follower? surveyed 360,000 staff in the 10largest economies and shows that Brazil has the highest levels of employeecommitment. In Brazil, 79 per cent of employees are committed to theiremployer. Other countries with high levels include Spain, Germany and Canada.The UK was ranked in the bottom three countries, with China and Japan. Only 50per cent of staff are committed to their employers in Japan.RogerMaitland, deputy chairman of ISR, said: “Too often in the UK, the peopleat the bottom of the organisation are alienated from those at the top.Employees see their leaders as lacking both the intellectual capital to craftaspirational goals and the emotional intelligence to achieve them.”www.isrsurveys.co.ukFrenchfirms call on government to overhaul the 35-hour weekFrenchemployers are pushing the new centre-right government to adopt a more radicalapproach to overhauling the 35-hour week.Medef,the employers’ federation, wants the government selected by President Chirac totake comprehensive action to reverse aspects of the shortened working week.Ernest-AntoineSeilliere, head of Medef, has had “worrying” meetings with labourminister, Francois Fillon, over the watering down of the government’s reformpledges, as the economy weakens and the unions flex their muscles. The mainconcession sought is raising the ceiling on overtime. Medef wants this raisedfrom 130 hours per year to at least 180 hours. Employers also want a lesspunishing system of overtime payments, both in terms of social securitycontributions and wage scales.Medefwas created in 1998 by employers determined to fight the 35-hour week im-posedon them by the socialist government.www.ft.comUNto assist firms in tackling HIV crisisTheUnited Nations will help fund businesses wanting to tackle the HIV crisis inthe developing world.The$2bn (£1.2bn) UN Global Fund for the treatment of Aids, tuberculosis andmalaria, will consider supporting corporate programmes that offeranti-retroviral drugs to employees, their dependants and their communities.Itshows the UN believes governments and NGOs are failing to address the crisisand that corporates have the resources to develop health solutions.Lastmonth, mining groups Anglo American and De Beers said they would pay foranti-retroviral drug treatments to prolong the lives of their workers andfamilies. It will cost Anglo American $5m (£3.1m) in its first year.www.un.org/newsTempsdirective may harm job prospectsTheEuropean Commission’s draft Agency Workers Directive will misfire and damagethe employment prospects of the temporary workers it is designed to help,claims research.Thedirective would give temps the same pay and conditions as permanent workers,once they have worked for an employer for more than six weeks.Thesurvey of 4,000 temps by the Recruitment and Employment Confederation showsthat 70 per cent of agency workers believe temping improves their ability toget a job.TimNicholson, chief executive of the REC, said: “The directive is supposed tomake temping more attractive to workers and employers, but instead jobs will belost because of inflexibility and extra costs.”www.rec.uk.com Previous Article Next Article
Related posts:No related photos. Previous Article Next Article Fixed term employees (prevention of less favourable treatment) regulations2002Justin Beevor highlights the key issues employers must consider nowregulations have come into force to protect fixed-term workersThe Fixed-Term Employees (Prevention of Less Favourable Treatment)Regulations 2002, which were due to be in force on 10 July 2002, finally cameinto force on 1 October 2002 and implement the EU Directive on Fixed Term Work.The regulations aim to prevent pay and pensions discrimination against fixed-termemployees. They apply the principle of non-discrimination to those infixed-term employment and prevent abuse arising from the use of successivefixed term employment contracts or relationships. This article highlights thekey issues. Who is covered by the regulations? The regulations define a ‘fixed-term employee’ as a person with a contractof employment due to end when a specified date is reached, a specified eventdoes or does not happen or a specified task has been completed. The protection set out in the regulations is limited to ’employees’ and doesnot extend to the wider class of ‘workers’. This restrictive approach is partlyexplained by the Government’s announcement that the whole issue of employmentstatus will be addressed in the forthcoming employment status review which itis committed to carrying out over the next few days. How does the equal treatment principle work? A fixed-term employee has the right not be treated less favourably (whetherin regards to the terms of his contract, or by being subjected to any otherdetriment, and in particular including in relation to length-of-servicequalifications for any benefit, training opportunities, and opportunities forpermanent employment in the establishment) than a comparable permanent employeeon the ground that he is a fixed-term employee, unless the different treatmentcan be objectively justified. The regulations define a ‘permanent employee’ as an employee who is not on afixed-term contract, and ‘comparable’ is defined as working for the sameemployer in the same establishment, doing the same or broadly similar work,taking into account relevant skills and qualifications. If no comparablepermanent employee works in the same establishment, a fixed-term employee canuse a comparator in another of the employer’s establishments, but cannotcompare himself to any associated employer’s staff. The terms ‘less favourable treatment’ and ‘detriment’ are not separately definedin the regulations, and are therefore to be interpreted according to the sameprinciples that have been developed in relation to general discrimination law. When applying the equal treatment requirement to terms and conditions ofemployment, employers can approach ‘objective justification’ for lessfavourable treatment in one of two different ways: The ‘term-by-term’ approach requires that every individual term or conditionof a fixed-term employee’s employment package should be completely the same, orif appropriate, the same on a pro-rata basis, as the equivalent term of thecomparable permanent employee, unless a difference in the term is objectivelyjustified. This is the same approach as for general discrimination law, and theterm ‘objective justification’ should be interpreted according to the sameprinciples. In short, a measure will be objectively justified if it can bedemonstrated to: – Achieve a genuine business objective – To be necessary to achieve that objective – To be an appropriate way to achieve that objective Alternatively, the ‘package’ approach provides that less favourabletreatment in relation to particular contractual terms is taken to beobjectively justified where the fixed-term employee’s overall package of termsand conditions, taken as a whole, is no less favourable than the comparator’soverall package. Unless it is inappropriate, employers may compare terms and conditions ofemployment according to the pro-rata principle. This means that where thepermanent comparator is entitled to pay or any other benefit, a fixed-termemployee must be entitled to such proportion of that pay or other benefit as isreasonable in the circumstances bearing in mind the length of his contract ofemployment and the basis on which the pay or other benefit is offered. Written statements Fixed-term employees have the right to ask their employer in writing for awritten statement giving the reason for any less favourable treatment, whichthe employer must produce within 21 days of the request. The statement may beused in evidence at an employment tribunal hearing concerning a complaint underthe regulations. It should set out the reasons for the different treatment or,if less favourable treatment is not occurring, that this is the case; if apackage approach is used to justify the treatment, the statement should saythat this is why different treatment is occurring in respect of one or morebenefits. Non-renewal of fixed-term contracts Under the new regulations the end of a task contract that expires when aspecific task has been completed or a specific event does or does not happenwill be a dismissal in law. The non-renewal of a fixed-term contract concludedfor a specified period of time is already a dismissal in law. Employees on thesetask contracts of one year or more will have a right to a written statement ofreasons for this dismissal and the right not to be unfairly dismissed. If thecontract lasts two years or more and the contract is not renewed by reason ofredundancy, the employee will have a right to a statutory redundancy payment. Redundancy rights The regulations repeal the provisions enabling fixed-term employees to waivetheir right to a redundancy payment. The effect is that any such waiversinserted into contracts agreed, renewed or extended after 1 October 2002 willbe void and fixed-term employees will have a right to statutory redundancypayments if they have been continuously employed for two years or more.However, they may be excluded from contractual redundancy schemes if this isobjectively justified, perhaps because the purpose of such schemes is tocompensate for unexpected job loss, whereas fixed-term employees may have noreasonable expectation of renewal. Fixed-term employees should not be selected for redundancy purely becausethey are on fixed-term contracts, unless this is objectively justified.However, where fixed-term employees have been brought in specifically tocomplete particular tasks or to cover for a peak in demand, it is likely anemployer could objectively justify selecting them for redundancy at the end oftheir contracts. The reason for the non-renewal of a fixed-term contract upon its expiry willnot always be redundancy. It will depend on the circumstances of the case, suchas whether the employer is dismissing other employees doing the same work asthe fixed-term employee, or whether there is some other reason for not renewingthe contract, for example that the fixed-term employee was covering for anabsent member of permanent staff who has duly returned. The definition of ‘fixed-term’ in the regulations by reference to thecompletion of a ‘particular task’ or the occurrence or non-occurrence of a‘specific event’ would seem to suggest that it is best practice for theemployer to record the purpose of the employment on the face of the fixed-termemployee’s contract,to avoid subsequent unfair redundancy claims. Limiting the use of successive fixed-term contracts If fixed-term employees have their contracts renewed, or are re-engaged on anew fixed-term contract, when they already have a period of four or more yearsof continuous employment (excluding any service prior to 10 July 2002) therenewal or new contract takes place as a permanent contract unless employmenton a fixed-term contract was objectively justified or the period of four yearshas been lengthened under a workforce agreement. There is no limit on theduration on a first fixed-term contract, but if the first contract lasts forfour years or more and is renewed, the second contract will be regarded aspermanent unless a further fixed-term contract can be justified objectively. Employers and employees may enter into workforce or collective agreementswhich provide an alternative scheme for preventing abuses of fixed-term contracts.The regulations allow such an agreement to vary the limit on the duration ofsuccessive contracts upwards or downwards or to limit the use of successivefixed-term contracts by applying one or more of the following: – A limit on the total duration of successive fixed-term contracts – A limit on the number of successive fixed-term contracts; or – A list of permissible objective reasons justifying renewals of fixed-termcontracts. Once the contract has become permanent as set out above, the fixed-termemployee may ask his employer in writing for a written statement confirmingthat the contract is to be regarded as a permanent contract. The employer mustproduce the statement within 21 days of the request and if the employermaintains that the employee is still fixed-term, the reasons for this must beexplained. The statement can be used as evidence at an employment tribunalhearing concerning a complaint under the regulations. Once the employee’s contract becomes permanent, it lasts for an indefinite duration,subject to the usual statutory minimum notice periods or any longer contractualperiods. An individual’s fixed-term contract can become a contract of indefinite termby virtue of the notice provisions in the Employment Rights Act 1996 Section86(4) which states that where an individual is employed for a ‘term certain’ ofone month or less and has been employed for three months or more, his contractis to have effect as if it was for an indefinite period. This provision doesnot seem to apply to contracts which terminate automatically on the completionof a particular task or upon the occurrence or non-occurrence of a specificevent (‘task contracts’). Remedies If fixed-term employees believe they are being less favourably treated thana comparable employee because they are fixed-term, or that the employer hasotherwise infringed their rights under the regulations, then they may presenttheir complaint to an employment tribunal. Fixed-term employees are alsoprotected from victimisation arising from their having made such complaints. Noqualifying period of continuous employment is necessary for a complaint underthe regulations. Fixed-term employees: compliance checklist – Identify whether you have any employees who have been engaged for a specifiedperiod, or until a specified date is reached, a specified event does or doesnot happen or a specified task has been completed. Examples include employees: i) doing so-called ‘seasonal’ or ‘casual’ work who have contracts for ashort period or task that ends when the period expires or the task iscompleted, such as employees at children’s summer camps, agricultural workers,shop assistants engaged specifically for Christmas or other busy periods ii) on fixed-term contracts engaged specifically to cover for parental orsick leave iii) engaged to cover for peaks in demand and whose contracts expire whendemand returns to normal levels iv) whose contracts will expire when a specific task is completed, such assetting up a new database, painting a house, or running an educational ortraining course – Do the employment contracts issued to those employees specify the relevantdate, event or task? – Are any such employees, whose contracts were stated to last for one monthor less, still employed after three months or longer? – Do you have any comparable permanent employees to those fixed-termemployees, taking into account relevant skills and qualifications, working atthe same establishment? If not, are there any at any other establishment ofyours? – When reorganising workloads, do you treat fixed-term employees asfavourably as any comparable permanent employees? – Is current or previous fixed-term status ignored when deciding on theissue of promotion to a post (whether the post is fixed-term or permanent)? – Do fixed-term employees receive the same hourly rate of pay (includingovertime) as comparable permanent employees? – Are fixed-term employees allowed to participate in the same bonus, profitsharing or share option (or any other incentive) schemes which are available tocomparable permanent employees? – Are fixed-term employees treated no less favourably than comparablepermanent employees for the purpose of calculating sick pay or maternity pay,the length of service required to qualify for payment or the length of time thepayment is received? – Are fixed-term employees afforded the same access to occupational pensionschemes as comparable permanent employees? If not, can the employer makecompensatory contributions at a reasonable level into a stakeholder or privatepension scheme? – Are fixed-term employees afforded the same access as comparable permanentemployees to training (and is training scheduled to allow fixed-term employeesto attend)? – In relation to health insurance benefits, which cannot be applied prorata, have any arrangements been made to offer this benefit to fixed-termemployees (for example offering them full cover but requiring them tocontribute 50 per cent of the cost)? – Is the holiday entitlement of fixed-term employees pro rata the same ascomparable permanent employees? – Is the contractual maternity leave and parental leave available tofixed-term employees as well as to comparable permanent employees? – Is there an objectively justifiable reason for not offering to fixed-termemployees any benefit (including all of those mentioned above) available tocomparable permanent employees, on a case-by-case basis? – Where a benefit received by comparable permanent employees is not given toa fixed-term employee, is there any objectively justifiable reason why thefixed-term employee should not be compensated by another equivalent benefit(for example a lump sum payment) such that the fixed-term employee’s overallpackage of terms and conditions is no less favourable than the comparablepermanent employee? – When a fixed-term contract is not renewed at its end, what is the reasonfor the non-renewal? – Do the criteria which are used to select jobs for redundancy treatfixed-term employees no less favourably than comparable permanent employees? – Are fixed-term employees entitled to the same enhanced redundancy paymentsas comparable permanent employees? – Are fixed-term employees informed of permanent vacancies in the employer’sorganisation? – Are internal vacancies in the employer’s organisation available tofixed-term employees on the same basis and to the same extent as to comparablepermanent employees? If not, is any difference objectively justified? – Have any fixed-term employees whose contracts are about to expire beencontinuously employed for four years or more since 10 July 2002? Is there anyobjectively justifiable reason why they should not become permanent employeesat the four-year point? – Is there a need to vary the four-year limit on successive fixed-termcontracts, or specifies permissible reasons justifying renewal of fixed-termcontracts? If so, the employer should negotiate a collective or workforceagreement permitting this. Justin Beevor is a solicitor in the employment department at AddleshawBooth and Co Lawyers viewOn 1 Oct 2002 in Personnel Today Comments are closed.
As vice-president for HR at Hewlett-Packard, Hugo Bague was a key figure inthe company’s merger with Compaq last May. He was responsible for bringing together two cultures and more than42,000 staff from across Europe, the Middle East and Africa. Here he answersquestions on how to handle mergers and acquisitionsQ What are the main HR challenges in managing mergers? A One of the key challenges is actually keeping the organisation focusedon the customer throughout the process. There’s a natural tendency for managersto concentrate on their own situation. Everybody is shaken-up so you have toensure there is a stable business. HR should be integral to the planning stage because the better the planning,the better the execution. You have to keep people at the centre becausecultural differences are the main reason mergers fail. It’s about working outthe culture of the new entity and deciding how you get there. Q Is HR’s role in mergers changing? A Over the past 10 years or so it’s changed dramatically. When Ifirst started out, HR was only involved at the last minute and then to performvery basic tasks. Now it’s at the forefront of important organisational work. Q What were the main problems encountered during the HP-Compaq merger? A The major challenge for us was the size of both companies. In amerger, size is the defining thing – it touches every element of the process –so the sheer scope was a challenge. We looked for best practice at bothcompanies and used an ‘adopt and go’ system. This meant we found the bestpolicies from both companies and implemented them as the new HP system. Thisreally helped stabilise the firm because of its speed and continuity. We also used a system we called ‘Fast Start’ where, for a few days, the newteams (in HR, finance and marketing, for example) would come together to talkabout cultural differences between the two companies. We also got them todecide exactly what areas they would focus on and after the first two quarters,90 per cent had done so. For me the key points are speed, discipline andcommunication. Q What advice would you give to other HR professionals preparing for amerger? A Detailed planning is vital. There’s the tendency to question everylittle aspect of the business and that can slow things down. You have tobalance the need for high quality with speed – don’t reinvent both companies.During the first few months concentrate on the basics and clearly define yourobjectives. Q What will be the problems to a potential merger at Safeway? A I don’t want to get into discussions about other people’s business,but from our experience of such a big merger it’s often a long and legalisticprocess. There’s not much you can do about the uncertainty because change is the verynature of a merger. We controlled it by engaging in continuous communicationwith staff on a daily basis. Q What tools helped most during the HP-Compaq merger? A Our plans were announced in September 2001, but discussions went onuntil April 2002, and we just wouldn’t have made it without good workforcecommunication. We had some great tools in-house that allowed us to distributee-mails from the chief executives and managers. We used an IT system called the HP Portal which has three basic elements. Itacts as an information tool for managers who can access all sorts of guidanceand HR policy, as well as being a basic HR self-service system. It’s also acommunication tool that showcases high technology and allows us to talk to theentire workforce. Q Was there anything you learned about internal communications from theprocess? A One of the best things you can do as a manager is stand in front ofstaff and have a discussion. Our technology really helped, but these ‘coffeetalks’ led to open discourse because the employees want to look company leadersin the eye. Q What are the challenges facing you in the depressed IT market? A It is no longer what it was, and people need to be able to cope inthis new environment. HR can help to identify the work that needs to be done.There needs to be a balance between regional employees and the flexibleworkforce to counter ups and downs. Q You run the HR function in several countries, which is the hardest tomanage? A Each one is different and has its own difficulties. Germany andFrance are legally complex and in Eastern Europe it’s difficult to manage thegrowth. You have to balance the business needs with regional reality. Q What are the challenges specific to the UK? A The UK has one of the most flexible working environments and thatbenefits the country. There’s a very skilled workforce, but the challenge is tostrive to compete in a European, if not global, marketplaces. The workforce hasto maintain competitiveness against worldwide competition. www.hp.comBy Ross WighamEssential background– HP was founded in 1939 by StanfordUniversity graduates Bill Hewlett and Dave Packard. The company name wasdecided on the toss of a coin– Compaq Computer Corporation was formed in 1982 at a pie shopin Houston, Texas– The new HPQ? Came about after Compaq and HP merged on 3 May,2002– The merged company has a combined revenue of $81.7bn (£50.5bn)based on 2001 figures with operations in more than 160 countries– The firm provides IT products, technologies, services andsolutions Previous Article Next Article Comments are closed. Good planning by HR team helped smooth Hewlett-Packard’s mergerOn 18 Feb 2003 in Personnel Today Related posts:No related photos.