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You Get The Employee Relations Culture You "Deserve"

You Get The Employee Relations Culture You "Deserve"

I had the pleasure of presenting the Employment Law work-stream at the annual HR Network Conference in Edinburgh last week.  This is our fifth year of sponsoring the conference, which has gone from strength to strength, as the place to be for the HR community in Scotland.

As well as providing an update on developments in employment law, we like to tailor our session to fit with the theme of the conference.  This year the theme was “Organisational Culture”.  For me, there was a natural fit between culture and employment law.  It really resonated with the approach that we take to advising HR professionals.

As we have moved towards a much more “rights-based” culture in the UK, with an increase in employment law regulation in recent years (the so-called red tape challenge spoke for itself), employment law is higher profile than ever before.  Employment law issues are never far from the national media and the new Tory government is already pressing on with its change agenda, looking at reining in the law on industrial action.

Despite this, we have seen a dramatic fall in Employment Tribunal claims of some 80% UK-wide following the introduction of a fees regime.  Fees look set to stay unless the courts intervene on the final attempt at judicial review or if the SNP move to abolish them in Scotland following devolution.

So, if claims have dropped, I posed the question “Are employers “getting away” with more than before?”  We saw signs of that in the recession (and again now in the oil & gas sector in Aberdeen) where difficult decisions were more readily achievable in difficult times.  But, how you treat your people in hard times sets the tone of your organisational culture when the economy improves.  And in turn, therefore, you get the employee relations culture “you deserve”.  Those employers who enforced “deeper” cuts in the recession saw increased attrition, grievances and trade union intervention when the economy improved.

Is there, therefore, a link between organisational culture and risk management when it comes to the application of employment law?

I think that there is.  Just look at the basic concepts of employment law - fairness, reasonableness, consistency, trust & confidence, diversity - all of these would be at home in any mission statement of an organisation’s “values”.  Not to do ourselves out of a job as employment lawyers, but it’s not rocket science.  Treat your people fairly, consistently and reasonably and you should avoid or at least be in a good position to defend an employment tribunal claim.

Which means that the role of employment lawyer has evolved in recent years to be more akin to that of risk manager.  When advising on employee relations cases, it’s all about managing risk.  Employment law (regulation) underpins everything that we do in every organisation of any sector, but it is the employer’s attitude to risk (i.e. their culture) that sets the tone for the way forward.  I’m not sure that I would go so far as to say that HR should be the “moral compass” of the organisation but certainly the advice that we in HR and employment law provide to the business must be shaped by the culture of the organisation.  Just like instructing an IFA (are you an “adventurous, moderate or cautious” investor), you start by generating options, applying your risk profile and then coming to the recommendation.  What sets apart the truly “commercial” employment lawyer is the one who does not sit on the fence and is prepared to give a recommendation.  Knowing the company’s culture and attitude to risk makes this possible.

But culture is not a one-way street.  Knowing the employee’s culture is often just as important in managing risk and arriving at the preferred recommendation.  Put yourselves in the shoes of the individual employee and you will see that their perception, aversion to risk (culture) and approach to litigation will also inform the outcome. Which option to follow from an HR perspective will depend on the employee’s hierarchy of needs, including their attitude to the cost of litigating, their financial needs, the ever-present “point of principle” and the impact on their reputation.

At the HR Network Conference my colleagues and I showcased this risk management approach by applying it to three real-life scenarios, including the topical holiday pay dilemma, the collective consultation conundrum (following the Woolworths decision), and finally the well-trodden case of a protected conversation with an underperforming employee.

Culture and employee engagement may be high on the agenda in HR circles just now.  But it’s about more than just values and mission statements.  It shapes the way you engage with your staff and ultimately how we advise on HR issues as they arise.

David Morgan
Partner

LChalmers