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Employment figures still at record high, but wages slow

UK employment figures reached a record high of 32.8 million people in work after a rise of 24,000 in the past quarter, while unemployment remained at 3.8% – the lowest since the 1970s. However, wage growth has slowed for the third month in a row after annualised growth in weekly earnings dropped to 3.2% in October, down from 3.6% at the end of September. John Philpott of the Jobs Economist, warned that a weak and shrinking private sector labour market, particularly in construction and retail, was being propped up by strong growth in the public sector, saying that “We may now be on course for faster growth in public sector employment than seen throughout most of the past decade.”

 

Survey finds workers willing to fake sickness – but will stand up for colleagues

While the average worker takes just four sick days a year, research by ComRes for the BBC has found that two in five adults admitted they would fake a sick day if they needed a break from work, even if they weren’t actually ill. Similarly, two thirds of adults – 66% – said they would lie to cover for a colleague who was absent but not really ill. Occupational psychologist Helen Lewis suggests this may be because of a culture of presenteeism, where being ‘sick’ is seen as the only option for workers who need to take a break. The same survey, however, found that young people were much more likely to stand up against sexual harassment in the workplace; 70% of those under 34 said they would report or intervene if they saw a senior figure at work making sexual comments to a junior colleague, while less than half of those aged over 55 agreed.

 

Wetherspoons boss in corporate governance argument

Tim Martin, chairman of JD Wetherspoon, lashed out at the UK’s corporate governance rules in an angry diatribe, labelling the system “up the spout – and is itself a threat to listed companies – and therefore to the UK economy”. He criticized non-executive directors as having too much power and objected to rules stating that they should no longer be considered independent after nine years, saying such systems encouraged “inexperience and navel-gazing”. Shareholder advisory groups had raised a number of red flags around corporate governance at the pub chain, 32% owned by Mr Martin, ahead of their AGM this year, including the spending of £95,000 of company money on pro-Brexit beermats and posters during the referendum campaign without first seeking shareholder approval, leading to Pirc advising shareholders to vote against the company’s annual report. In the end only around 5% of shareholders voted against the report and 6% against the pay policies, while Martin himself received the endorsement of 98% of voting shareholders.

 

Research by the TUC and the High Pay Centre shows the extent to which returns to shareholders, in the forms of dividend payments and share buybacks, are dramatically outpacing wages across the wider economy.

Our analysis examined dividend payments and share buybacks over the last five years, finding an increase of 56% between 2014 and 2018. This resulted from a 45% increase in dividends, while share buybacks more than doubled. Nominal pay for the median worker increased by just 8% over the same timeframe.

If wage increases had kept pace with shareholder returns, the typical worker would now be over £9,500 better off.

The total returns to shareholders over the period amounted to £442 billion, from net profits of £551 billion. This is the equivalent of giving shareholders around £1.7bn a week every week from 2014 through to the end of 2018.

Payments to shareholders primarily benefit a wealthy minority. UK taxpayers earning over £150,000 (barely 1% of the total) captured around 22% of all direct income from UK dividends. Dividend income accruing via pension savings also disproportionately benefits those at the top – 46% of pension wealth is owned by the wealthiest 10% of households.

In 27% of cases, returns to shareholders were higher than the company’s net profit, including 7% of cases where dividends and/or buybacks were paid despite the company making a loss. In 2015 and 2016, total returns to shareholders came to more than total net profits for the FTSE 100 as a whole.

Throughout the period, profits varied significantly more than returns, ranging from a low of £53 billion in 2015 to a high of £150 billion in 2017, a variation of £97 billion, with a fall between 2014 and 2015 and a sharp rise in 2017. Returns to shareholders had less than half as much variation, ranging from £74bn in 2015 to £122 billion in 2018.

This highlights the immense pressure that boards are under to enrich their investors regardless of whether they can afford it, or if it’s a sensible use of their resources. If they fail to deliver generous returns, the share price will fall with the management facing public criticism, potentially putting their jobs at risk and the company vulnerable to takeover.

The situation is exacerbated by management incentives. When the High Pay Centre last looked at this issue, 74% of FTSE 100 companies tied CEO pay to ‘total shareholder return’ meaning that their multi-million pound bonuses and incentive payments are contingent on them ensuring an ever increasing (or ‘progressive’) dividend and a rising share price, manipulated by buybacks if necessary – even if this is not in the long-term interest of the company and the wider UK economy. The economist Andrew Smithers argues persuasively that the pressure to deliver returns for shareholders means companies are doing so by diverting resources from productive investment. Ultimately this will reduce the productivity of UK companies and the country’s economic growth.

The consistency of shareholder returns also totally undermines the argument that shareholders are exposed to the greatest risk of all business stakeholders, as it suggests that they can expect consistent returns, regardless of profitability. The idea that shareholders are the greatest risk takers, is the basis for the UK’s entire corporate governance system, so this is a significant finding.

Shareholders are considered to have most at stake from the success or otherwise of the company, and therefore it is they who determine board appointments, and approve the company’s financial position and management practices.

The logic of this is flawed anyway, given that shareholders can spread their investments over multiple companies in a way that workers cannot spread their labour. Therefore, workers are surely most reliant on the company being run in a long-term sustainable way. When we see how the doctrine of shareholder primacy has driven returns to shareholders to a potentially unsustainable level, mainly benefitting wealthy investors to the detriment of workers and the wider economy, the case for a different approach becomes even stronger.

Such an approach should involve stronger trade union rights, worker representation on company boards and a rewritten and properly enforced definition of directors’ legal duties, making clear that they have an equal balance of responsibility to the company’s workers, wider society and other stakeholders, along with its shareholders.

Read the full report here.

Luke Hildyard is Director of the High Pay Centre

New European Labour Authority begins operation

On 17^th October the Management Board of the European Labour Authority met for the first time in Brussels, attended by outgoing Commission President Jean-Claude Juncker who first announced the idea to set up a European Labour Authority in his State of the Union Address two years ago. The new agency will work to monitor and support the enforcement of EU rules on labour mobility and social security coordination across all EU member states, including a focus on tackling bogus self-employment and undeclared work.

 

Progress stalls on gender pay gap

New figures from ONS suggest that the gender pay gap among full time employees increased from 8.6% in 2018 to 8.9% in 2019. Though the increase is not statistically significant, it is the first time in six years the gap has grown and represents a continued lack of progress in closing the gap. Among all employees, including part-time, the gender pay gap did narrow from 17.8% to 17.3% due to increases in the national minimum wage, but still remains stubbornly high due to the large number of women in part time work. ONS senior statistician Roger Smith commented, “The gender pay gap has been falling slowly in recent years for full-time employees, but in 2019 it was little changed. However, for employees under 40, the gap is now close to zero; it’s among older workers that the pay gap remains substantial.”

 

Survey finds UK employees welcome AI but want safeguards

A new survey of UK employees by Genesys has found that UK employees on the whole welcome the introduction of artificial intelligence into their workplaces, with 64% saying they value AI and 58% suggesting they would like to have a virtual assistant to support them in managing tasks and meeting deadlines. Meanwhile 53% of employees say they would be prepared to use augmented reality (AR) or virtual reality (VR) to support them with job training at work, though only 35% would be willing to be trained by an AI-powered robot. Crucially, however, workers feel underequipped to handle the new world of AI, with under half of workers saying they feel they have the right skills and an overwhelming majority of 86% demanding that their employers should provide training for working with AI-based technologies. Nearly two-thirds of workers (64%) also feel there should be legal safeguards requiring companies to maintain a minimum percentage of humans in the workforce.

Smart organisations are changing the way they communicate with their employees. For too long, senior individuals near the top of hierarchical pyramids drove the agenda, shaped the message and issued statements. To make matters worse, they rarely used their own words. We – their internal communicators – filtered and honed their language until it was perfectly safe and sterile for mass consumption.

Rarely did we expect – or seek – a response from employees. Feedback was limited to an annual engagement survey or the occasional ‘speak up’ mechanism. Both of which often felt like a tick-box exercise to everyone involved.

This approach characterised much of my early career in internal communications, which began in 1990 inside London’s Square Mile. Nearly thirty years on however, broadcasting corporate soliloquies at employees increasingly frustrates and fails them. Much has changed – not least the explosion of mobile technology and social media. People every­where have found their voice. They have the capability and desire not just to passively receive a message, but to participate in sharing and shaping it.

Moreover, in tough, competitive markets, organisations need the commercial benefits of a genuine dialogue with their people to stay ahead. If organisations look solely to their strategists or management consultants for fresh thinking, they are ignoring an army of people who know them best – those who create their products and deliver their services every day.

Another striking argument for a more conversational style of internal communication is made by MIT Sloan professor, Edgar Schein. In his book, Humble Enquiry, Schein examines corporate disasters, including nuclear plant accidents, the NASA Challenger disaster and BP gulf spill. He finds a common theme. Lower-ranking employees had information that would have prevented or lessened the consequences of the accident, but this information was either not passed on, it was ignored or overridden.

“Humble Inquiry is the fine art of drawing someone out, of asking questions to which you do not already know the answer, of building a relationship based on curiosity and interest in the other person,” writes Schein. Today, when business has become more technologically complex, interdependent and culturally diverse, strong relationships are needed to get things done but, coincidentally, more difficult to build. Hence the power of asking sincere, open-ended questions and listening hard to people’s answers.

Advances in digital and mobile technology mean there is now a wealth of different ways to create a dialogue with employees.  App makers jostle to help organisations connect, communicate and collaborate with employees on mobile devices.  In 2016, Facebook entered the fray with Workplace, its enterprise platform. The company says there are now two million paid users of its service, which enable businesses to ‘hold a two-way conversation with the entire organisation’.

There is little doubt mobile technology is enabling a more immediate and meritocratic style of communication to flourish inside organisations. However, we instinctively know one meaningful face-to-face conversation – even with its subtleties, nuances and meanderings – has a more lasting and powerful impact than any virtual exchange.

Dr Kevin Ruck is one of the few people to hold a PhD in internal communications. Much of his research has focused on ‘employee voice’ and how this helps to drive employees’ sense of engagement with their organisation. But for employees to be truly heard, says Ruck, leaders need to listen authentically. As employees, we quickly detect pretence in the process. “Leaders need to understand how to listen and embrace meaningful dialogue with employees based on an open mind, heart and will,” Ruck writes. He advises leaders to forgo the slick PowerPoint presentation and instead create a setting in which employees feel it is safe to speak out.

This chimes with the work of Amy Edmondson, professor at Harvard Business School, who has identified the concept of ‘psychological safety’ at work. Her research suggests companies with a trusting workplace culture perform better. Psychological safety is felt when employees can give candid feedback, openly admit mistakes and learn from each other. In her book, The Fearless Organisation, Edmondson argues this kind of culture gives organisations a competitive edge. “The failure of an employee to speak up in a crucial moment cannot be seen. This is true whether that employee is on the front lines of customer service or sitting next to you in the executive board room. And because not offering an idea is an invisible act, it is hard to engage in real-time course correction. This means that psychologically safe workplaces have a powerful advantage in competitive industries.”

Smart organisations are now listening to the wisdom of their crowds. A genuine conversation with employees is a rare win-win. It is emotionally engaging for employees and commercially beneficial for organisations. As the US president Calvin Collidge once said: “No man ever listened himself out of a job.”

 

 

Katie Macaulay is the managing director of AB, the UK’s longest established internal communications agency. She is host of The Internal Comms Podcast and author of From Cascade to Conversation, Unlocking the Collective Wisdom of Your Workforce.

Public sector most attractive to new graduate workers

The civil service has topped the list of most attractive employment opportunities for new graduates, according to The Times’ Top 100 Graduate Employers 2019-2020, in which 19,000 graduates were asked “which employer do you think offers the best opportunities for graduates?” They replace PwC as the most attractive destination for graduates for the first time in 15 years, with 1,200 vacancies for the civil service fast stream this year. Martin Birchall, editor of the rankings, explained the outcome as “a combination of the dramatic focus that the continuing Brexit process has put on politics and government; a record number of places available on the prestigious fast stream programme; and a reinvigorated campaign to recruit the broadest possible intake of new graduates.”

 

Uber’s London license extended for just 2 months

TfL has granted Uber a temporary 2-month license to continue operating in London, while it waits for the firm to provide additional information and assurances over its practices. This comes after Uber lost its license in 2017 due to failings over background checks for drivers and reporting of criminal offences, followed by a 15-month extension granted by a judge that has now expired. The GMB union representing Uber drivers commented: “A two month licence extension is no good for anyone – it leaves uncertainty for drivers and passengers, meanwhile Uber still operates an unsafe model on the streets of London.” Around 45,000 drivers in London work for Uber and could face the loss of work if the company was ultimately to lose its license.

 

Survey finds gardeners happiest of all workers

A survey of 40,000 service professional workers across the UK by Bark.com, conducted to mark the International Week of Happiness at Work (23-27 September) has revealed the UK’s happiest professions. At the top of the list are landscape gardeners with 86% reporting they loved their job. This is followed by dog walkers, counsellors, wedding photographers and personal trainers. At the bottom of the list were cleaners, 73% of whom said their job made them unhappy, alongside plumbers (68%), accountants (61%) and electricians (60%). Happiness at work levels are reported to have fallen 20% over the last three years, with the unhappiest region of the UK for workers being Greater London.

 

Recent events have again shined a light on the importance of organizational culture and leadership, with the dramatic ouster of founder Adam Neumann from his role as CEO of the start-up WeWork, shortly before its expected initial public offering and a 75% collapse in its valuation. Reports that he fostered a tequila-fueled party culture replete with loud music at work, mandatory company retreats rife with sex and drugs and his personal pocketing of $6 million by selling the brand “We” to his own company have seriously damaged the company’s reputation and share valuation. That’s not to mention the serious allegations of sexual harassment and discrimination that have been made within the company.

The saga recalls memories of Travis Kalanick’s eviction as CEO of Uber in 2017 over similar reports of an unethical and toxic culture at the company, as well as Elon Musk’s forced departure from the board of Tesla after an investigation for share price manipulation (Musk was also back in the news again this week for breaking labour laws over anti-union activity at Tesla). What is it about these start-up companies that leads them down such a destructive path, and what can it teach us about the values of leadership and integrity? Two problems can be identified.

The first is the character of the founders and CEOs themselves. The success of people like Elon Musk and Steve Jobs before him has helped to cement the myth of the ‘maverick’ and ‘visionary’ entrepreneur, particularly within parts of the tech industry or the gig economy. This unhelpful idea perpetuates beliefs that ‘true leadership’ consists of risk-taking, a brash personality and a huge dollop of egomania and narcissism. In reality, while self-confidence and a willingness to take risks are obviously vital traits for entrepreneurs, as companies grow the kind of leaders they need are those with both a clear vision and an ability to lead by example in their behaviour. CEOs are vital drivers of organizational culture and will ultimately determine whether unethical behaviour is encouraged, tolerated or challenged within the company.

The second problem is around the speed at which these unicorn companies (those privately held with a valuation over $1 billion) grow. WeWork went from 1,000 employees in 2016 to 12,000 in 2019 – an annual expansion rate of around 250%. When almost everyone in a company you join is also a new arrival, the organisation’s culture is extremely unstable and offers little time to assimilate new employees before yet more people arrive. In such circumstances, where the company’s founder is the only person who’s been present any length of time, the signalling being sent from the top matters more than ever.

Nowhere is this seen more strongly than in the continued #MeToo movement of challenging sexual harassment in the workplace. Last November 20,000 employees and contractors at Google walked out of their offices in a mass protest, called the Google Walkout for Real Change. CEO Sundar Picai publicly offered his support for Google staff over the issue – an important sign of leadership – but there is evidence that just signaling support for change is not enough. Since the walkout two of the key organizers have alleged they are paying the price for speaking out, being sidelined from key projects and marginalized at work.

According to the Hays Diversity and Inclusion Report 2018, only 35% of UK workers trusted their leaders to deliver genuine change on diversity and inclusion issues. This figure was even lower among members of minority groups with only 28% of BAME workers, 26% of disabled workers and 25% of LGBT workers expressing trust in the ability and willingness of their organizations’ leaders to deliver on real change. Meanwhile, only 34% consider their leaders to be role models who challenge traditional viewpoints and established ways of working.

The time has come for companies to be less forgiving of poor leadership and to demand a greater focus on ethical behaviour and corporate culture. The simple fact is that it’s what workers (and customers) increasingly expect. Surveys suggest that new generations of workers are expecting higher ethical standards of their employers than those did in the past.

Integrity is one of the four pillars of employee engagement. It means living up to high standards of ethical and professional conduct and having a culture that promotes the same and challenges those who fail to do so. This should cover everything from diversity and inclusion, tackling sexual harassment and discrimination, to transparency, anti-corruption and general principles of treating others with fairness, honesty and respect regardless of who they are.

Companies with integrity in turn benefit from higher engagement, better reputations, lower staff turnover, more productivity and a whole host of other benefits. Conversely, companies without it can often find themselves in a downward spiral – unethical behaviour, pressure on other workers to compromise their own ethics or turn a blind eye, which leads to good employees quitting, more misconduct and a further corrosion of the organization’s culture.

Patrick Briône is Head of Policy & Research at the IPA

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The day a CEO walks into the office wearing jeans is the day everyone knows suits are no longer required. No matter how many changes in policy or how many communications from HR, nothing demonstrates a behaviour is OK more than a CEO’s action.

Similarly, when the CEO challenges leaders to consider if every individual in their team would say they belong in that team, a focus is achieved in a moment that no HR initiative could accomplish in a year. This is the question our CEO posed to our leaders. He went on to ask: could everyone in your team say they can speak up and be heard? If not, he said, you, as a leader, are not maximising the potential of your team to grow our business.

This support from the top is, I believe, more vital to drive Inclusion and Diversity (I and D) than to create almost any other change. The benefits of I and D, and how to achieve inclusion at work, are still not widely understood by managers and leaders. We need CEOs to shine a light on this area, so people take the time to look.

On the back of our CEO’s support, we’ve created a sustainability commitment that 50% of all managers will be women by 2025. This is one of our six ‘beacon’ public commitments, from a starting position of 37% at the end of 2018 and improvements year-on-year. Again, most importantly, the commitment focuses minds.

So, we’ve taken the vital first step: we have the attention of our leaders. The next step is to raise awareness and understanding, and to shape our company culture. Only by changing how we think and how we do things can we create an inclusive environment.

To change mindsets, we’ve kicked off a communications campaign based on the truth of the adage that a picture is worth a thousand words. We’re challenging stereotypical images of what leaders, and innovators, look like, with the key message that great performance, innovation and excellence have no age, gender or colour. We’re also asking senior leaders to speak in a personal way – using natural language, rather than ‘corporate speak’ – about what belonging in the company means to them and to invite others to share their thoughts on the same.

Our messages make clear that creating teams where people feel they belong is a win-win. The company finds the best talent, unleashes potential, creates innovation, and makes better decisions. That’s the business case. But, more importantly, we’re clear that striving to make the workplace better for everyone is part of our culture.

We’re helping leaders deliver on that promise by embedding inclusive leadership development into our core leadership curricula. The importance of systems and processes to culture is not forgotten, with a review of our talent processes end-to-end, including, for example, the use of gender-neutral languages and images in job ads.

We’re promoting the use of local employee groups, such as women’s networks, in our countries to create workplaces where people can share common concerns and interests, reinforcing a sense of belonging. And we’re starting to listen more through new, more frequent Culture and Engagement surveys, with results broken down by workforce groups and gender. Interviews with women in our senior leadership were important, too. These identified the significance for many women of their immediate manager, a mentor or a coach, in supporting their careers. We’re building our mentoring programme and offering development in coaching skills in partnership with the International Coaching Federation.

But if there was a silver bullet to achieve inclusion and diversity in our workplaces, you would not be reading this article. Coca-Cola HBC, and no doubt your organization, would have jumped on the bandwagon years ago, and ‘Inclusion and Diversity’ would no longer need to be an item on the agenda.

Our starting point at Coca-Cola HBC is that of a company with multiple countries and huge variations in national cultures and maturity on I and D issues. Solutions need to be as diverse as the diversity we’re trying to create in our business. Other organisations will have different starting positions and different approaches will be required. However, I believe all will need to start with culture, and that can only be led from the top.

Dr Diane Sinclair is Group Employee Relations Director at Coca-Cola Hellenic Bottling Company

With events in Parliament approaching a climax this week it is almost impossible to say with confidence at this stage where the UK will be come 31^st October. Nevertheless many in the UK workforce and business community will be understandably extremely concerned about the very significant possibility of crashing out of the EU with no deal in just a few weeks’ time. With that in mind the IPA have put together a special Brexit preparedness bulletin below with information and guidance news relating to Brexit, the workforce and EU employment rights.

Employee engagement is a key pillar of organisational resilience and it is resilience that is essential if businesses and other employers are going to weather the storm that may now be only a few weeks away. With this in mind we strongly urge all employers, large and small, to not neglect the voice of their workforce during their contingency planning for a no deal Brexit. Below we present a set of practical advice about specific contingency planning information as well as some general guidance about engaging with the workforce over Brexit and speculation about the future of employment rights after Brexit.

If you are an employer, trade unionist or HR practitioner and have questions or concerns about any of these issues, please get in touch and IPA would be happy to provide what support and assistance we can.

 

Government launches new No Deal Brexit preparedness support tool for businesses

The government has this week launched a new online tool to help businesses and individuals preparing for a potential no-deal Brexit. The tool can be found at www.gov.uk/get-ready-brexit-check and includes a short questionnaire followed by links to a range of articles about possible steps your organisation may need to take in anticipation of a potential no-deal Brexit outcome.

These include guidance on registering for an EORI number so that your business can still move goods into or out of the EU, advice on how to check new import tariff schedules as and when they are updated, and a range of other issues around accounting and reporting, appointing a representative to sell manufactured goods in the EU, and changes to intellectual property rights after Brexit.

You may need licenses or visas for your workforce to provide services in other EU countries after a no deal Brexit and if your workers travel to the EU they may also require International Driving Permits and travel insurance to replace their EHIC cards that may no longer be valid.

If you receive any personal data from the EU you may also need to review your processes.

 

Engaging with your workforce ahead of a no-deal Brexit

Uncertainty is the dominant characteristic of the present situation and even many of the webpages linked to through the government’s Get Ready for Brexit tool are unable to say whether steps will definitely need to be taken, or merely ‘may’ need taking at some point soon. It is understandable that many employers are waiting until they think they may have more clarity before committing themselves to irreversible decisions.

Yet to avoid talking to your workforce about your contingency planning and how no deal might affect your business simply because you don’t have all the answers would be a grave mistake, likely to breed distrust, rumourmongering and a collapse in employee engagement at this critical time when engagement is needed more than ever. If employees don’t properly understand what plans are being considered and how decisions are being made, they are likely to assume leaders are hiding things or engaged in knee-jerk decision making. Instead leaders should display confidence and strength through transparency and being willing to admit if they don’t yet have all the answers. Employees want to know that their organisations have a Plan A, Plan B and event Plan C in place, even if those plans might depend on assumptions that could change over the coming weeks.

Leaders also shouldn’t shy away from saying difficult things – employees don’t want or expect false reassurances where none can honestly be given and would much rather their leaders “tell it like it is”. Where employees know the truth they can both prepare themselves mentally for the worst and also contribute constructively through employee voice to help provide solutions.

Leaders should ensure that any communications gap around Brexit is quickly plugged before we draw close to the 31^st October deadline. Senior leaders should be meeting regularly at this stage with staff forums and/or trade union representatives to discuss the latest updates and ensure factual information is being filtered through to all employees. Frequently asked questions about Brexit and their answers should be displayed prominently to all employees and regularly updated.

 

Providing advice and support to EU nationals in your workforce

Some of your employees will be affected more than others by a possible no-deal Brexit and this is true of nobody more than any citizens of other EU countries currently in your workforce. It’s possible you might not even know for certain how many EU citizens you have in your workforce as they currently have the same right to work status as UK citizens. Some larger employers have taken steps over the last two years to compile a registry of EU citizens in their workforce, so that they are better placed to provide them support and advice relating to Brexit. You might also wish to do this in your organisation, but if so then take care to make it clear that this information is being gathered purely to support the workers, not to monitor or threaten them with potential loss of rights or status after Brexit, as in the present climate it is understandable that many EU citizens in the UK are fearful for their future.

Note that all employers have a legal duty not to discriminate against EU citizens in light of the UK’s decision to leave the EU, both as a prospective and current employer. Placing additional burdens on current or prospective employees who are EU citizens, even after a no-deal Brexit, would constitute discrimination. Make sure that your HR policies and practices including recruitment and onboarding are compliant with Right to Work duties and don’t discriminate on the basis of nationality, as well as making sure relevant staff are properly trained in these areas.

If you do know you have EU nationals in your workforce, you should check if they need to apply to the EU Settlement Scheme in order to continue living and working in the EU after Brexit. Officially registration will not need to be completed until 30 June 2021, though in practice it is strongly encouraged to begin the process before 31 October as lacking settled or pre-settled status by that date may complicate their travel plans if they travel to and from the UK over the next couple of years in the case of a no-deal outcome.

While securing pre-settled status still entitles your employees to continue living and working in the UK after Brexit while they wait for full settled status, it is a less desirable status than full settled status as it places limits on leaving the UK during that period and doesn’t automatically grant British citizenship to any new children they have. There have been numerous recent reports of applicants who ought to be entitled to full settled status being denied this in favour of pre-settled status – this is an anxiety some of your staff may have that you should be aware of. Note that some EU citizens in your workforce may similarly want help to apply for permanent residence in the UK or naturalisation as British citizens if they have been here long enough.

While there is no legal obligation for employers to provide support to their EU workers with completing these applications, it would be a very good idea to do so. Ensuring they have access to workplace documentation that proves continuity of employment, residence and NI contributions in the UK might all assist EU citizens in your workforce with their applications. Showing that their employer is caring and supportive towards their situation, as well as more broadly demonstrating through words and deeds that they are valued members of staff and that their employer has their backs is much more likely to provide reassurance and help reduce potential staff attrition.

 

New rulings clarify law on European Works Councils

Recent rulings by the Central Arbitration Committee and Employment Appeals Tribunal in the Oracle case have clarified a significant proportion of the law around European Works Councils. The laws in question are the ECW Directive and TICER – The Transnational Information and Consultation of Employees Regulations 1999, as amended, the regulation which transposes the Directive into UK law. The Directive applies to all companies with more than 1,000 employees of whom at least 150 are in each of two different EU/EEA countries.

In particular the rulings relate to the Subsidiary Requirements, the fallback provisions that apply in cases where parties have failed to reach a negotiated agreement. There has up to now been a degree of ambiguity on what obligations these Subsidiary Requirements placed on management. The Oracle case has clarified several aspects of this case law, particularly relating to meetings of the EWC in ‘exceptional circumstances’:

• Management should wait for the EWC to request an exceptional meeting rather than “instigating” one themselves.
• Management should provide “sufficient information” to the EWC once a meeting is requested, in order to allow the EWC members to meet privately before the consultation meeting, without management present, in order to prepare themselves and obtain expert assistance if required.
• Meetings with the EWC should generally be held “face-to-face” unless the format has been agreed beforehand to be otherwise.
• Management are not legally obliged to wait for an employee response to the information and consultation meeting before they proceed with implementing their decisions. Legally the consultation ends with the close of the information and consultation meeting, though it would be sensible for management to allow representatives and opportunity to meet privately after the consultation meeting to formulate a response and then put it forwards before considering the consultation ‘closed’.
• Management are still legally obliged to provide a reasoned response to any EWC opinion or response provided to it, even if they’ve already begun to implement their decisions.

Despite the fact that the UK will fall outside the scope of EU law in the case of a no-deal Brexit, judgements of UK courts such as the EAT on this subject will likely still be persuasive in other EU jurisdictions after Brexit, particularly in Ireland where many UK firms are relocating their EWCs.

 

Impact of No-Deal Brexit on UK workers’ rights

Companies with European Works Councils will likely need to relocate these outside of the UK in the case of a no-deal Brexit as the UK will fall outside the scope of EU law. The UK government is encouraging companies to continue to allow UK workers to be represented on EWCs on a voluntary basis. UK employees will no longer be able to legally allowed to request for their employer to set up an EWC after Brexit but pending requests at the time of Brexit will still be allowed to complete. Note that Brexit will not affect the separate Information and Consultation of Employees Regulations (2004) which requires employers to set up information and consultation arrangements in the UK if requested by 10% of the workforce, dropping to 2% from 2020.

The other major rights that will be immediately affected by a no-deal Brexit related to employer insolvency. The rights of UK and EU employees working in the UK will not change if their employer becomes insolvent. However, UK citizens working in an EU country for a UK employer may lose their rights to compensation from the national guarantee fund in their country. Employees should check their rights with the embassy or consulate in the country in which they are working.

Beyond this there should be no immediate changes to workplace rights after Brexit, though the longer term future of many employment rights in the UK remain uncertain. At the point of departure, the European Union (Withdrawal) Act 2018 will transpose all previous EU regulations, including on employment rights, directly into UK domestic law. However, their enforcement would fall solely to UK courts and tribunals, with no further right of appeal to the ECJ. While in practice there doesn’t seem any reason to think existing rights would not be enforced any longer, we could certainly imagine a potential drop in compliance following the reduction in enforcement infrastructure and lack of EU-level pressure to enforce compliance. More troublingly, there would be nothing to prevent the UK government from acting to repeal or amend significant parts of the Social Europe regulations.

Theresa May repeatedly pledged over recent years that no employment rights would be repealed or watered down while she remained Prime Minister and that the UK Parliament would get an automatic vote on whether to match any strengthening of employment rights passed in the EU. Boris Johnson’s promises on the same subject have been somewhat less watertight, however, merely pledging to “maintain this record of leadership [on workers’ rights] after we leave the EU, with or without a deal” and “where necessary, to enhance workers’ rights in this country.” In particular, the commitment to get an automatic vote on shadowing future enhancements to rights in the EU appears to have been dropped – the Prime Ministers’ new chief negotiator David Frost has been particularly critical of it, objecting to “the EU’s drift towards heavy labour market regulation.”

Beyond this it is hard to say how safe existing regulations really would be if the present government continues long in office or secures a majority at a forthcoming election. Regulations such as TUPE, working time protections, health and safety and collective voice via the ICE Regulations have long been derided by those on the libertarian right, led by the vision of a buccaneering Britain unshackled from the ‘red tape’ of regulation as outlined by the five authors of the 2012 “Britannia Unchained” book. All five of those authors are now senior figures in the government of Boris Johnson, including Home Secretary Priti Patel, Foreign Secretary Dominic Raab, International Trade Secretary Liz Truss and Business Minister attending cabinet Kwasi Kwarteng. Despite the fact that there is little appetite among the UK business community to see swathes of employment regulation ripped up, there should nevertheless be little complacency about the security of these rights over the coming years.

Launch of Good Work benchmarking standard in London

July marked the launch of the Mayor of London’s Good Work Standard – the first voluntary benchmarking scheme in the UK for businesses relating to good work. Companies which apply and meet the standards of good work will be officially accredited as a good employer by the mayor’s office and be permitted to advertise this status and the good work logo. The standard, developed in partnership with CIPD and others, includes paying the London Living Wage of £10.55 per hour, improving wellbeing, promoting diversity and inclusion and providing training and progression pathways. Employers already signed up include KPMG and EY and key public sector organisations such as the Metropolitan Police, Tfl and the London Fire Brigade.

 

Work today just as secure as 20 years ago according to CIPD study

Analysis published by CIPD has found that levels of insecure work – including gig work and zero hours contracts – is no higher than it was in 1998. The proportion of the workforce on temporary contracts or in self-employment stood at 20% in both 1998 and 2018. The study concluded that the apparent rise in zero hours contracts since 2012 has been due to better awareness and increased reporting rather than actual changes in circumstances. The share of ‘involuntary’ temporary workers who would prefer a permanent job did rise substantially between 2008 and 2013 when it peaked at 40%, but it has since fallen back to just 27%, suggesting the effect is cyclical and similar to what was seen in the early 1990s when similar figures were reached. CIPD’s Ben Willmott commented, “This suggests that more attention should be paid by policy makers and employers on improving job quality… low pay and discrimination, not simply on improving the rights and security of atypical workers, important though this is.”

 

Calls for 30-minute “general strike” at TUC Congress as part of climate protest

The University and College Union (UCU) has put forward a motion for September’s TUC Congress calling for all UK unions to support a 30-minute “general strike” walkout in solidarity with the global school student strike on 20^th September being led by Swedish teenage activist Greta Thunberg. The measure, being billed as a “solidarity climate stoppage” is hoped to encourage not only the 5.5 million UK trade union members but also other non-unionised workers to join in solidarity, as part of what is expected to be a week of major climate protest action around the world. However, concerns have been raised that the proposed walkout, if officially supported by TUC, would be illegal under UK trade union law as it would not give employers the required 14 days’ notice. Nevertheless some employers are under pressure to give permission for their workers to join in the 30 minute stoppage.

NDAs being abused to cover up mistreatment at work

A report by the House of Commons’ women and equalities committee has warned that secretive non-disclosure agreements are being routinely misused by employers to cover up allegations of unlawful behaviour at work, such as discrimination, sexual harassment and bullying. Some NDAs specifically included clauses worded to prevent employees providing evidence to court proceedings or police investigations, something the report condemned as a possible criminal attempt at “perverting the course of justice.” The report recommended that the government take action to stop NDAs from being used to cover up or prevent legitimate discussion about unlawful behaviour at work.

Court rules employers can bypass collective bargaining when negotiations fail

Overturning a previous judgement, the Court of Appeal has ruled that businesses are allowed under some circumstances to bypass collective bargaining arrangements if an impasse has been reached and make financial offers directly to employees. This reversed the ruling of two previous tribunals ordering Kostal UK, a car parts manufacturer, to pay nearly £420,000 in compensation to 55 union members for ‘unlawful inducements’ after the firm made an offer directly to the workforce to accept a 2-4% pay rise in exchange for a Christmas bonus, following a breakdown in pay negotiations with its recognised union Unite. Unite commented that they were “extremely disappointed” with the ruling and planned to appeal to the Supreme Court.

Gig economy doubles in three years

According to a new study based on a poll of 2,235 UK working-age residents from the TUC and University of Hertfordshire, the size of the gig economy of platform work in the UK has more than doubled over the past three years, to 4.7 million workers. Around one in 10 working-age adults currently find work via online platforms such as Uber or Deliveroo at least once a week, while up to one in seven, or 7.5 million people, have found work via a gig economy platform at some point in their working lives. Matthew Taylor, Chief Executive of the RSA said that the labour market was shifting more rapidly than the response of policymakers to his 2017 Review of Modern Employment Practices and that it was up to the next Prime Minister “to take this agenda and run faster with it.”