PEOPLE RESOURCING
Chapter Four
The Regulatory Environment
One of the most significant current developments in the
P&D business environment is the growing volume of
regulation that governs the employment relationship in
the UK.
Until the 1960s, employers were able to manage their
organisations to a large extent without the limitations that
are now imposed through statute. Where employee
interests were represented, this was because of trade
union membership.
Over the past 40 years, the situation has changed to a
considerable extent.
1965
1970s 1980s 1995 1998 -
Statutory redundancy payments
Fledgling industrial tribunal service
Unfair dismissal law
Equal pay legislation
Freedom from sex/racial discrimination
Extended health and safety regulations
TUPE
Regulatory regime for trade unions
Disability discrimination law
National minimum wage
Working time regulations
Data protection law
Since 2000 - Protection for part-time workers and agency staff;
freedom from discrimination on the grounds of sexual
orientation, religion and age; extended family rights; etc.
Employment regulation has increased substantially, but
in a piecemeal, step-by-step fashion.
Contributing factors:
• UK membership of the EEC and now the EU
• decline in trade union membership and activism
• government economic policy – desire to encourage
people to ‘come off the welfare state and into
work’
• just another area of national life that has become more
regulated
• political expediency.
Discrimination law
Basic aims:
1. to ensure that employers treat people equally
2. to protect groups who are vulnerable to discrimination from less
favourable treatment on the part of employers.
Anti-discrimination laws in the UK cover detrimental
treatment on a variety of different grounds.
The individual measures work in different ways:
•
Some cover all ‘workers’ whereas others cover only ‘employees’.
•
Some give a wide degree of protection whereas others permit
employers flexibility where it can be ‘objectively justified’.
Dismissal law
Three types of claim:
1. Unfair dismissal – breach of statute (the most common)
2. Wrongful dismissal – breach of contract
3. Constructive dismissal – employee resigns as a direct result of
unreasonable employer conduct.
2004 Measures introduced to reduce the number of
tribunal cases by encouraging dismissed
employees to make use of employers’
mandatory appeal mechanisms
2006 Gibbon Report concluded that these procedures
had not met their objectives.
Law of contract
Part of the common law, thus largely judge-made:
•
A contract of employment is only established when a clear,
unambiguous and unconditional offer has been made and
accepted.
•
Contracts cannot be changed unilaterally by one party.
•
Once established, a contract confers duties on both parties.
In practice, this means:
•
An offer letter must be issued, accompanied by a summary of
the key terms and conditions of employment.
•
Employers should explicitly build a degree of flexibility into any
contracts that they offer.
•
All individuals undertaking a supervisory role must have basic
training on the law of contract – including the issue of implied
terms.
Family-friendly statutes
Range of new rights designed to make it easier for
people with family responsibilities to combine these
with a career.
Includes rights to maternity leave, maternity pay,
paternity leave, parental leave, time off to care for
dependants and requesting flexible working.
P&D professionals must administer such matters
professionally, and to build assumptions about the
take up of these rights into their human resource
planning activities.
Working Time Regulations
Complex legislation that has been heavily criticised for
lacking clarity.
Central to human resource planning and the organisation
of work.
Confidentiality issues
•
Public Interest Disclosure Act 1998 (whistle-blowing)
•
Telecommunications (Lawful Business Practice)
(Interception of Communications) Regulations 2000
•
Data Protection Act 1998
Debates about employment regulation
Two types of debate:
•
micro-debates: effectiveness of particular pieces of
legislation
•
macro-debates: the rights and wrongs of regulating
the labour market through employment protection
legislation.
Micro-debates
Individual pieces of legislation – do they ‘go too far’
(employer organisations) or ‘not go far enough’
(employee perspective)?
Some areas of employment regulation are generally
agreed by all parties to function badly:
•
Some laws fail to meet their own objectives – being
burdensome for employees, yet ineffective for staff
(equal pay law)
•
Badly drafted law, leaving substantial uncertainty
•
Unnecessary complexity.
Macro-debates
Is increased employment regulation beneficial or harmful
to the UK’s economy and people?
Two views:
1. Anti-regulation (CBI, IOD, etc):
-
Regulation serves to place substantial additional costs on
employers, which has the effect of making UK businesses less
competitive in international markets.
-
The long-term effect is the need for employers to shed labour
and create unemployment.
-
Regulations impose a single, standard way of doing things,
which means that local flexibility is reduced.
2. Pro-regulation:
-
Employment law is necessary to protect vulnerable people who
might otherwise be unjustly exploited.
-
With current tight labour markets, it is in our economic interests
for the government to force employers to provide workplaces in
which people want to work, and terms and conditions that attract
them into employment.
-
Fair, equitable treatment will result in increased employee loyalty
and productivity.