It is not easy to hire people. Depending on the role and sector, different laws, regulations, and guidelines may apply. The rules that govern how these models should operate seem to be increasing in number as employment models become increasingly diverse. Part-time, zero-hours, or hybrid arrangements can be even more difficult.
The Employment Rights Bill of the Labour Party has shed new light on the subject. Some have argued that their changes and general direction shifted the balance in the employment relationship to the employee’s favor.
Are there any instances, if this is true – or even not – where compliance and legislation could actually be detrimental to good employment relationships? Can the law, in these times when the organisational culture is as important to businesses as their products and services, compromise the positive impact that companies achieve, hindering good relationships at work?
Costs to comply with additional regulations
Morag Bailey, head of HR for prepared fruit specialists PrepWorldUK explains current employment laws.
She also admits that this may be because HR has become accustomed to the way it works. She says the new proposals are fair, but she anticipates additional costs for her business. She argues that this could have a negative impact on the financial situation of companies like hers, where there is a high number of hourly-paid employees. She notes that this cost is on top of significant increases in NLW and NI. These costs will be passed on to the customer and we are concerned about how this will affect the price of the product.
If a client stops spending, this could be bad for the workforce. The extra costs of meeting the good intentions intended for the workforce could theoretically result in less work for some organizations. Does this mean that the HR department should decide whether to offer an employee benefit and how to balance the cost of the benefit with the potential for increased employee retention or attraction?
There may be similar issues around unfair dismissal rights on the first day of employment. This is because businesses need to ensure they know how to manage the new probationary period. Bailey says that he is fortunate to have an HR and L&D department large enough to train the changes after receiving ACAS guidelines. However, he adds that smaller HR departments may struggle with the rapid pace of change.
Small HR departments may find themselves particularly stressed. They may have to put their own initiatives on hold as they are forced to run to catch up. It may be bad for employer relations. An HR department that is struggling to keep up with the new legislation, and how it should apply, may be unable to focus on getting their workforce’s best performance.
When compliance is not an issue
“I believe that bad employers are responsible for a great deal of Employment Law and case law,”
Elsie Coke is the Chief People Officer at HomeLink Healthcare.
“An employer should not need legislation to tell him to treat pregnant workers well or that men and woman should have equal wages for work of equal worth. If you treat your employees well as an employer, then compliance with employment laws shouldn’t be a problem.
Elsie mentions the extension of the time limits for employment claims as a possible challenge for HR departments. The law changes may cause departments to be under more stress and use up valuable resources by increasing the uncertainty of whether or not a claim is going to be filed.
“With ACAS early settlement, you could get an ET1 at 4-5 months. For some reason, many employment lawyers like to submit the claim at the last minute.”
She says. She says.
Elsie reported that some managers, not in her current position, have complained about the employment law being skewed towards employees. However, since employers hold the majority of the power in employment relationships she believes the situation is balanced.
Compliance in a human-centric perspective
Florence Carter is VP for People & Culture of learning platform FuseUniversal and feels that changes to the law are often justified.
While some may argue that an increasing number of employment laws will hamper effective employee relationships, I believe this change often comes from a human-centric, crucial approach to employee relations.”
She says. Carter believes that Labour’s proposed change won’t impact her business too much, as employees already enjoy a comprehensive wellness plan. However, she says, small businesses, especially those with a minimal HR infrastructure may be affected by the changes.
She says that while regulations may seem burdensome, smaller businesses might need extra help to implement them. While compliance may seem like a burden to some, it can often lead businesses to adopt better and more ethical practices. This is beneficial for everyone.
Compliance is the foundation of good people processes
Compliance is the foundation of HR and the place where trust between employer and employee begins.
“Olivia Spruce is Director of the Payroll Compliance Authority. “Any employee will expect that their contract is legally sound, and their pay should be in line with all employment and tax regulations.
Spruce believes compliance is an administrative burden but it’s more important than the added value an HR professional could provide.
She says that “an employee must feel secure in the knowledge that his or her employer is doing their job and that he or she won’t face any unfair treatment, or unexpected consequences as a result,” The HR function is crucial to fulfilling this duty.
Spruce admits that compliance is a burden, and will continue to grow as employment laws and practices change. She uses the recent changes in umbrella company management as an example. New legislation has transferred the responsibility for Pay As You Earn and other tax deductions away from the umbrella companies who employ the workers, to the recruitment agencies which supply the workers or the end client businesses. The employment sector has been subject to complex rules that are constantly changing.
The level of resources available to HR will ultimately determine whether it is a burden or a solid foundation from which to work. HR is in a position where it needs every resource available to them – time, money and other resources – to be able understand the changes and implement them. The legislation itself may not be as important as the ease or difficulty with which the organization finds it to adapt and implement the legislation.
