PUTTING A SURE FOOT FORWARD POST BREXIT VOTE

Now the campaign posturing is over, the everyday world now has to deal a new reality even though political poses and media speculation rampage on. It looks as if it will be at least some weeks, before we get much clear direction and a cohesive approach to negotiating any new governmental norms for UK plc.

Business, meanwhile will frankly carry on as usual, though it will undoubtedly face a period of uncertainty and new challenges. The underlying position of many areas in the economy is one of relative confidence, though just modest growth. Brexit should provide new opportunities though and should be seen as a chance to be creative, positive and imaginative.

Any British manager has to be pragmatic often in their approach to business, weighing up rational pros and cons of taking risk, but rarely will they be as expedient and whimsical as the average politician.

Nevertheless, there are undoubtedly stormy squalls ahead. We are not yet out of the EU. Most party leaders have not resigned or been booted out quite yet (despite the media averring otherwise) though no doubt there are rocky paths ahead. And the perceived tide of immigration is not now being stopped at the White Cliffs.

But where though does all this leave us so far as our staff is concerned? Let’s consider the position.

Various “Remain” proponents suggested that a Brexit would threaten the fundamentals of employment law and see the removal of workers’ rights.

Tosh.

Although not as unilaterally “protective” of UK’s position as they may have been a few years back when John Major had negotiated an opt out of the Social Chapter, only for Tony Blair to give it away, there are strong reasons why significant changes in labour legislation is unlikely. These include:

  • Various UK employment laws pre-date our membership of the EEC and subsequently the EU.

UK actually has an historic foundation of fair treatment of employees and protection of rights at work, perhaps not as liberal as some might like, but good examples are the Equal Pay Act, which dates to 1970, some while before UK’s accession to the EEC in February 1973, and a good part of our Discrimination law too.

  • More recent EU employment laws are well-embedded into UK’s legislative framework and would take complex and time-consuming re-enactment to remove them.

This would be counter-productive, but for the most part, there is little demand to do so.

  • In various cases the UK has gone beyond EU minimum statutory requirement, so we are unlikely to back-track.

A good example of this is the provision for statutory holidays. This is 4 weeks in EU law, but 5.6 weeks in UK law, as we have gold plated the EU minimum provision. Can anyone seriously see the government risking the loss of popularity by taking away holiday? Of course not.

The UK government is currently consulting on various legislative proposals and has been over a long period. These are for a more liberal approach, not a less liberal one. Among other things they include restrictive covenants (trade restraints) which are seen in some circles as stifling enterprise.

  • There is no great clamour to dilute existing legislation. Of course there is a range of views, but in general, employers are not looking for weaker regulation, have grown to accept the benefits of fairer employment legislation and recognise the benefits of managing diversity and an engaged and motivated workforce. Most HR professional too would probably argue we’ve got thing about right, albeit a bit bureaucratic and perhaps occasionally lacking in justice.
  • Although there could still be a few changes, these may well be limited to such areas as ensuring zero hours contracts are not pernicious and removing VAT on the wage element of labour providers’ invoices, which non-registered businesses, such as banks, cannot currently reclaim.

So if employment law is not going to be a nightmare, what other human resource issues may still arise and what can you do about them?

Writing to all members individually on the day of the referendum result, Peter Cheese, CEO of the Chartered Institute of Personnel and Development (CIPD) praised the UK’s labour market for its flexibility and urged the government to consider this in any renegotiations. “The UK’s flexible labour market already strikes the right balance between providing flexibility for employers and employment rights for workers,” he said.

“Our flexible labour market enables employers to access or bring in skilled and unskilled workers from outside the UK to help support business growth and address labour shortages in our public services. It is important that this is not forgotten in any reform of the immigration system.”

So what should you be doing about immediate issues that might be facing you as an employer?

  • Unsettled staff

In many areas there has been a significant reaction to the result of the referendum, ranging from strong resentment to fear. Most people are uncertain as to what will happen next and when and this is likely to continue for quite some months, possibly several years.

You could therefore have an excellent opportunity to issue reassurance to all your staff that it will be business as usual at least for the foreseeable future. There are just a few sectors that may look to make changes quickly and will already have contingency plans for this. These include international finance and banking and construction, particularly large capital projects.

There are currently 3 million EU citizens already in the UK and they will probably be granted indefinite leave to remain. The Leave campaign has not called for them to be deported, but there are no guarantees at this stage, although the Vienna Convention states that rights previously acquired (e.g. residency) are not lost.

Whist it is said that you, “can’t make a silk purse out of a sow’s ear”, there are in fact many positives and exciting opportunities ahead that can be made into genuine virtues. We have not lost our ingenuity, initiative and hard work overnight.

  • Labour supply

Although an initial survey done last week by CIPD concluded that there was no immediate appetite for recruitment post Brexit vote, this may return quickly. In the mid-term though, business may find some disruption to their normal labour supply as there could be skill shortages in some areas.

It therefore may be a good idea to fill any management gaps you have now and make sure you have the team you require for the next few years.

What’s more you shouldn’t put all your eggs in one basket when it comes to your supply of staff. Use several agencies, labour suppliers, or consultancies to attract staff. Consider using apprenticeships as a good route to recruit and grow your future stars internally. Develop feeder links with local schools, colleges or universities.

  • Fixed and variable term contracts

If you do think that you are likely to be faced with greater turmoil in your business over the next few years, you may want to consider alternatives to standard terms and conditions of employment, or a mix of terms that will give you more flexibility.

Zero hours terms have received a mixed response over the last few years, often for political reasons, but independent research shows the majority of those on them do actually favour the adaptability. The excesses of zero hours can, of course, be removed by having minimum hours over a given time period, rather than none at all. There are other alternatives too, such as fixed term contracts that might be used for staff working on defined projects.

  • Pay what you can afford

When it comes to pay reviews and structure in the future, businesses perhaps need to budget more carefully. If markets are going to be more volatile, or new ventures and greater diversity are sought, then sales might fluctuate too. That makes it harder to cover your wages bill.

Think about protecting basic pay and then rewarding staff when both collective and individual targets are reached. Pay bonuses retrospectively, only when global, divisional, team and individual goals are collectively achieved, though be scrupulously fair how you set them.

  • Manage Diversity

Many firms will consider reviewing their markets and mix of provision of their products and services post referendum. That is common-sense to avoid over-exposure in areas that may decline and to secure new opportunities in areas of expansion.

Just as a business manages its marketing mix, so too it should do the same with its employment mix. Make sure you are truly an equal opportunities employer, getting the best for talent of all types, yet ensure you recruit individuals with the competencies you require in mind and favour multi-skilling or at least develop such abilities.

  • Productivity

Last, but not least, the UK has a particularly poor record when it comes to productivity. It has been said that it take us until Friday afternoon each week to produce what a Belgian does by Thursday evening.

We need to up our game.

We have a once-in-a-generation opportunity to do better and we need to seize the initiative. This means ensuring we run lean and effective businesses, with lean and fully engaged workforces. The starting point is measuring productivity and then setting out how you can improve this reasonably, rationally, inclusively and imaginatively.

And, despite everything, if your business is now facing redundancies, remember your legal obligation to consult early, fairly, transparently and genuinely.

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© David S Dixon, July 2016.

Further information at: www.personnel-matters.co.uk