Employment laws and enforcement bodies are increasingly proving to be ill-equipped to respond to the rapidly changing world of work and emerging societal values, requiring employers to play a larger role in navigating the evolving employment relationship.
While the imperative to reform both employment laws and enforcement remains, inflation and a cost of living crisis has seen a resurgence in industrial action across many industries in the UK and elsewhere. As trade unions seek to protect members’ pay from the corrosive effects of inflation and the government seeks to avoid fuelling inflation through significant pay rises, employers are left grappling with a myriad of growing challenges.
Employment laws
The last twelve months saw little change in UK employment laws under Boris Johnson’s government. Liz Truss’ brief stint as Prime Minister showed a de-regulating zeal but it remains to be seen whether Rishi Sunak’s government will propose any major changes. The Retained EU Law (Revocation and Reform) Bill may well result in lowering employment protection rights in areas over which the EU legislated. Change is most likely to be seen in relation to working time rules (such as restrictions on the hours worked and rights to rest periods), agency worker and part-time worker protections. If moves are made to de-regulate employment laws, the recommendations contained in the decade-old Beecroft report could resurface and fees to bring employment tribunal claims could be reintroduced. Proposals were also trailed by the Liz Truss government suggesting that employment protections could be reduced for those working in small and medium sized businesses or for high earners. Rishi Sunak’s government seems less likely to pursue this approach which, particularly in relation to those in SMEs, is unlikely to be popular with the public.
A dilution of employment protections would no doubt also generate conflict with trade unions.
Employer reputation
The reputational damage of mishandling employment or industrial relations issues continues to expose companies to significant risk, as the P&O dispute last March illustrated. In any employment dispute, many employers will weigh up reputational risks against other considerations. In today’s increasingly connected world, this is likely to become the norm. The economic crisis experienced around the world is resulting in restructurings and job losses on a massive scale. For some employers, immediate needs to act will override reputational concerns. At the other end of the spectrum, for others, reputational considerations and concerns for their people (sometimes as part of their ESG considerations) affected by changes will result in a more generous approach than might otherwise have been the case.
Regulating the employment relationship
In the years ahead, the way in which the evolving employment relationship is regulated through both the employment contract and the internal processes employers put in place to resolve disputes needs to be reappraised.
The employment contract
The traditional approach of documenting the employment relationship in an employment contract is increasingly out of step with the new world of work. Contracts tend to be lengthy, dense and rarely user-friendly. With employees valuing autonomy, trust, and flexibility, the traditional contract which pre-supposes a hierarchical relationship and is often designed to give the employer maximum flexibility and power seems outmoded.
Looking ahead, in many cases, simpler contracts will emerge based on mutuality, embracing digitisation and visualisation and better aligned to the employers’ brands and values. Documenting a relationship based on features of mutuality would better reflect the emerging values of the younger generations and the increased bargaining power of many workers at a time of skills shortages.
Resolving disputes internally
The traditional approach to dealing with grievances in the workplace is also ripe for review. Many employers deal with allegations of harassment, discrimination and bullying by way of potentially damaging and resource-intensive investigations and grievance processes. Better ways of tackling issues early and effectively are needed, recognising that systems will be imperfect and finding “the truth” is sometimes easier in theory than in practice. Establishing, for example, whether or not an employee claiming they were treated badly for a discriminatory reason has a valid claim is often very complex. Identifying the treatment is more straightforward, but the reason for the treatment is usually difficult to establish. This means that, at times, the right outcome is hard to achieve.
One option for employers to consider could be to appoint an independent non-executive to take responsibility for employee complaints – an evolution of the Guardian schemes introduced by some organisations in the wake of the #MeToo movement.
This Future of Work Hub podcast explores how managing conflict needs to become a strategic priority, with dialogue having primacy rather than retribution.