Cipd Pathway And Redundancy Payments Acts
Redundancy has become a daily part of our lives since the introduction of the Redundancy Payments Acts 1965 mainly because of the rising unemployment figures and economic change (Hammonds 2003). The legislation that governs redundancy includes the Employment Rights Act 1996 (ERA) and the Trade Union and Labour Relations (Consolidations) Act 1992 (TULRCA) so an employer has to consider these things when carrying out redundancy (Hammonds 2003:1). Redundancy is when an individual is “dismissed for a reason not related to the individuals concerned or for a number of reasons all of which are not so related" (ACAS 2009:4). Redundancy is also defined as the “situation in which management decides that an employee or employees are surplus to requirements in a particular occupation and cannot be offered suitable alternative work" (Armstrong 2006: 885). Redundancy has two different meanings: one to establish entitlement to redundancy payments and the other for the right to be consulted (ACAS 2009). For the entitlement to redundancy payments, according to the Employment Rights Act 1996, section 139 (1) cited in Daniels (2008), redundancy arises when employees are dismissed because of (a) the fact that the employer has stopped, or intends to stop, to continue the business for the reasons for which the staff was employed, (b) the fact that the staff has stopped, or aims to stop, to continue that business in the place where the staff were employed. The case of BASS LEISURE LTD V THOMAS (1994) IRLR 104, and (c) the fact that the condition of that business for staff to continue the work of a particular kind, or for staff to continue the task of a certain type in the location where the task is being done, has stopped or reduced or is expected to end or reduce.
For this principle to be consulted, this applies when an employer intends to make twenty or more staff laid off in one organization over ninety days or less (ACAS 2009:4). Redundancy is in the list of five potentially fair reasons for dismissal but it is quite different from the other reasons because the decision to make an employee redundant is related to the performance of the organisation and not any attribute related to the individual (Daniels 2006). Before an employee is made redundant, they need to be consulted first unless it would be considered as unfair dismissal. Consultation could be done individually or collectively depending on the amount of people being made redundant. Individual consultation is essential for all redundancies. Consultation over collective redundancies must be done with trade union representatives or employee representatives if the organisation is not unionised and should start at least ninety days before hand (Daniels 2008). The highest reward that can be rewarded if an employer fails to consult is ninety days’ pay. The consultation should consist of; the purpose for the dismissal, why and how staff have been selected, likely ways to avoid redundancy and possible alternative work (Peck 2009).
Selection is also important when employees are being made redundant. If more than one person is performing the similar jobs and only a handful of those jobs are to be made redundant, they should be a fair way to determine who will be made redundant (Daniels 2008).
Redundancy is an unpleasant situation for both the employer and employee so it should be dealt with carefully so as not to damage the employment relationship. This scenario is based on how the board intends to match the 20% decrease in volume by making 15% of the employees in redundant. The organization has 270 employees out of which 15% (about 40 employees) are being made redundant so the first step in communicating this decision to them would be to follow the statutory dismissals and disciplinary procedure by informing them that they are being considered for redundancy and the reasons for it all in form of a written letter. The employee must then meet with the board of directors to discuss it and this could occur more than once depending on how the employee responds to the decision made by the organization. Collective consultation would then occur involving the board and trade union representatives selecting those that would be dismissed. Once the consultation is done, the board would consult with the individual employees before making a final decision to dismiss them. The employees about to be redundant should be made aware in form of a written letter of the reason why they are being made redundant which is the current situation of the organization i.e. the 20% drop in sales volume which will affect the profit of the organization thereby affecting the payment of wages in the future.
The major issue the board should be worried about is the legal implication of their action. After the management has made a decision to dismiss and it has been communicated, the employee has to right to go to an employment tribunal and appeal against the decision so the organization should be prepared by having their company lawyers available to defend their actions. Another issue that the board should expect is employees going on strike because they feel their colleagues have being unfairly treated. The board should also make sure that employees that have worked over 2 years are properly compensated or the board can make available alternative employments for the employees that are being dismissed and if they refuse the offer, they would lose their redundancy payments.
ACAS (2009) ‘Redundancy Handling’ <http://www.acas.org.uk/CHttpHandler.ashx?id=877&p=0> accessed 23 May 2010.
Daniels, K. (2006) ‘Employee Relations in an Organisational Context’. CIPD
Daniels, K. (2008) ‘Employment Law: An Introduction for HR and Business Students’. Second Edition. CIPD.
Hammonds, S. (2003) ‘Redundancy’. Third Edition. CIPD
Peck, S. (2009) ‘Redundancy Law: A guide for Union Representatives’. Labour Research Department.
A grievance is a complaint by an employee that the behaviour of management, or that of an employee, has been unfair and unjust in its application to him or her (Gennard and Judge 2005). An organisation cannot ignore the grievances of its employees because it could lead to collective dispute. Employee grievances whether individual or collective tend to manifest in issues such as discrimination, organisational change, grading issues, health and safety, bullying and harassment, misunderstandings, lack of communication, new work practices, discipline, pay etc and if not handled quickly, it could damage the employment relationship. Grievances shows that an employee is dissatisfied and if the issue is not resolved could lead to low morale, employee frustration, poor performance, increased employee absenteeism, deteriorating interpersonal relationships and so on (Gennard and Judge 2005). In handling grievances, a procedure should be followed to ensure they are dealt with effectively. These grievance procedures are designed to resolve different grievances brought up by employees in relation to their employment and helps employers to deal with grievances fairly, regularly and quickly. According to Armstrong (2006), the policy of the company when it comes to handling grievances is that the employees should: (a)be given a fair hearing by their immediate supervisor or manager concerning any grievances they may wish to raise, (b) have the right to appeal to a more senior manager against a decision made by their immediate supervisor or manager and (c) have the right to be accompanied by a fellow employee of their own choice, when raising a grievance or appealing against a decision. The aim of the procedure is to settle the grievance as nearly as possible to its point of origin.
If employees feel that a contractual or statutory employment rights is either absent, not properly done or not enforced, they are several routes that they can take (Beardwell and Claydon 2007). At an early stage, the grievance can be dealt with informally involving other members of staff and discussing the situation with a supervisor or line manager which may result in corrective action (Beardwell and Claydon 2007). It is easier, quicker and more effective and an employee can approach the personnel department for advice and guidance. In the event that the matter remains unresolved, a formal approach can be taken and the employees are accompanied by a trade union representative or employee representative. All matters of grievance must be raised initially within ten working days of the employer becoming aware of the matter giving rise to the grievance. Most employees’ complaints against management behaviour do not reach the formal grievance procedure. Of the workplaces with formal grievance procedures surveyed in the Workplace Employee Relations Survey 1998, only 30 percent reported they had been activated in the last 12 months. In the smallest workplaces, he corresponding figure was 20 percent and in large workplaces 79 percent (Gennard and Judge 2005:305).
Communication is very essential in a workplace and keeps workers informed on decisions affecting them. Communication can be done through different ways such as team briefings, intranet, notice boards, memos, office meetings and so on. Employees are more likely to do their best if they feel valued and are given the opportunity to contribute ideas. Involvement means that management allows employees to discuss with it issues that affects them but that management retains the right to manage (Hewitt 2002). Involving employees makes them feel like they have a voice to influence the employer and empowers them directly and indirectly to contribute to decision making in the firm (Armstrong 2006). Consultation can contribute to improved performance at work and helps employees understand the reasons for a particular proposal and are given the opportunity to express their views and interests. This can lead to better decisions and more effective implementation. At the same time, management continues to be responsible for making the final decisions in the business but they need to have seriously discussed it with their workforce (Hewitt 2009).
Due to the fact that the R&D people are based on a separate site several miles away, communication, involvement and consultation has been far from great and this has caused grievance because the employees feel detached from the organisation. As the HR manager, i would advise the new manger to first carry out some investigations to ascertain the nature of the grievance. Also, the manager should have ready solutions so he or she knows what to say when they meet with the employees. The manager should try to build relationships of trust which will facilitate employee involvement and influence open communication and consultation.
At the early stage of the grievance, the new manger and the employees that raised the grievance should meet to discuss it and try to resolve it without the presence of the HR manager. The issue raised here was of a collective nature on lack of communication, consultation and involvement so the manger needs to meet with the employees individually to determine which part is causing them grievance before meeting them collectively. Collective grievance is when a group of people have a common complaint relating to their employment or an individual has a grievance which has collective implications (Gennard and Judge 2005). In other words, the manager has to take into account the different views and opinions of the employees and attempt to resolve the grievance by building consensus. If the issue still remains unresolved, the new manager has to involve top management in which case the HR manager can be present to address the issue more formally and look for ways to resolve it. In some cases, the formal procedure of dealing with grievance may not be necessary because it could be that the employees just want a manager that would listen to them and that could be enough to withdraw the complaint.
Armstrong, M. (2006) ‘A Handbook of Human Resource Management Practice’. Tenth Edition. Kogan Page Ltd.
Beardwell, J. and Claydon, T. (2007) ‘Human Resource Management: A Contemporary Approach’, Clark, I. (Eds., 2007) The Employment Relationship and Employee Rights at work. Fifth Edition. FT/Prentice Hall.
Gennard, J. and Judge, G. (2005) ‘Employee Relations’. Fourth Edition. CIPD.
Hewitt, P. (2002) ‘High Performance Workplaces: The Role of Employee Involvement in a Modern Economy’. Department of Trade and Industry. <http://www.berr.gov.uk/files/file26555.pdf> accessed 25 May 2010.
Negotiation takes place when two parties meet to reach an agreement concerning a proposition, such as a pay claim, one party has put to the other (Armstrong 2009). It is a process whereby different groups resolve their problems between and within themselves. When negotiating on pay or other terms and conditions of service, the management represents the employers’ interests and employee representatives represent the interests of employees so both are of equal status. (Armstrong 2009). Negotiation involves two main elements, purposeful persuasion and constructive compromise. It involves each party attempting to persuade the other to accept its request but the possibility of that happening is very low. Instead, they need to accommodate each party’s demand and make a compromise to suit both parties (Gennard and Judge 2005).
Salamon (2000) cited in Daniels (2006) suggests that they are four important features of negotiation: an explicit and deliberate event, conducted by representatives on behalf of those they represent, the purpose is to resolve the differences between the parties involved, and the outcome is dependent at least in part, on the perceived balance of power in the relationship between the two parties.
Negotiation is done through collective bargaining which can be described as a process through which employer and employee representatives in an organisation act as joint creators of the substantive and procedural rules regulating employment (Daniels 2006). Employee relations negotiation involves an ongoing relationship with more adjournments for the party to discuss the process of the negotiations and is usually done face to face so that each side can read the others’ body language and also hear what is being said. Trust is important between the two parties because the negotiations do not result in legally imposed contracts and the negotiation has to end in an agreement no matter how long it takes. Gennard and Judge (2005) proposes that there is a five stage process that needs to be worked through to ensure a successful negotiation takes place; preparation and analysis, presentation, searching for and identifying common ground, concluding the agreement and writing up the agreement.
MANAGEMENT NEGOTIATION STRATEGY
The type of negotiating situation involved in scenario three is about bargaining to resolve issues of collective concern to employers and employees. They are represented by the management team and union representative team. This kind of bargaining is called ‘intra- organisational bargaining’ (Gennard and Judge 2005). The side taken here would be of the management team. The first thing the management needs to consider before the negotiation process is to try and make it a win- win situation at the same time knowing exactly what they want out of the negotiation. The management would communicate clearly and precisely not saying everything at first just the objective and what would be negotiated on and the trade unions would be considered as friends not enemies. The conversation between the two parties would be polite but firm on what each party wants and responding effectively could facilitate trust throughout the negotiation process.
Items for negotiation Management Employees
Ideal Real Fallback Fallback Real Ideal
Pay Increase X X O O O X
Redundancy X O O X X X
The aspiration grid is basically about the negotiation process between the management and the employees involving the items that are being negotiated on. The X means no trade and the O means trade. From the grid above, it shows that the management will not trade on their basic percentage increase which is 4% no matter the pressure they are facing but as a fallback they are willing to give a 5% increase on a six months trial basis and if productivity increases, it will remain and if productivity does not, it would be cancelled. On the other hand, the employees ideally will not trade and try to bargain for more increase of 7% but realistically, they know the management will not change their minds so they accept it and also as a fallback position. A contract would be drawn up by both parties and signed to this effect. The other item which is redundancy shows management ideally will not bargain especially since it could affect the business but realistically they know unions would not accept that so they are willing to trade provide salaries will be reduced and allowances cut off. The unions will not allow employees to be made redundant under any circumstances because it is their job to protect them so they accept the managements’ offer.