The human touch

The biggest employee relations challenge for most manufacturers right now is pay and it will continue to be so as we move into 2012. With inflation currently running at over 5%, employees and unions alike are looking for substantial pay rises in order to offset the increased cost of living. Some trade unions are even suggesting that a 3% pay rise is effectively a pay cut!

This challenge is closely followed by pensions. Proposed changes to public sector pensions remains in the news with potentially the biggest UK strike for 30 years due to be held on November 30th 2011. Many manufacturers face similar challenges to the public sector; they still run finally salary schemes which they may well be looking to review and potentially change in an attempt to reduce costs and liabilities.

With a fragile economic climate and shrinking order books, cost reduction will be king in 2012 with many manufactures re-visiting measures such as short-term working arrangements and pay cuts. Whilst the unions may have been accommodating in 2008 to protect the jobs of their members, this time around, they might not be so willing which could see more and more industrial action taking place.

It is in this context that effectively managing and negotiating change becomes vital, whether a unionised site or not. So we are running a series of seminars to help manufacturers manage and negotiate their way through change. If you’re going through pay negotiations or looking to reduce costs and implement changes to terms and conditions, this must-attend event will help you successfully plan and implement change within your business.

As we move in to what looks to be a challenging year ahead, how will you deal with change?

The use of social media has blurred the lines between the private and professional world, presenting new and significant challenges for employers.

By the very nature of social media, information can be disseminated to an audience of millions at the click of a button. Businesses are now making use of social networks to promote their business and engage with their customers, their market and their supply chain. Many employers are also taking advantage of the opportunities of social media in recruitment, reaching out to potential recruits and researching candidates before offering an interview or making an offer.

But is it fair - or even legal - to take a peek at a potential's profile? When might this undermine a proper recruitment process or even fall foul of data protection or discrimination law? And when can you lawfully reject a candidate because of what you saw online?

Your employees are even more likely to be using social networks and social media, keeping in touch with friends, colleagues and ex-employees. But employees can just as easily talk about your business as what they're having for tea, and what they thought was a private comment between friends can all to often become public.

So what would you do if one of your employees was circulating disparaging information about your organization? Or if photos are posted online of an employee wearing your company uniform in a situation that puts your organisation’s reputation at risk? Or if someone tells you that an employee’s Facebook page shows they are not really sick when they are claiming sick pay?

The courts and tribunals are just beginning to grapple with the question of how far employers are allowed to intrude upon an employee’s online private life in these sorts of situations.  It’s clear from emerging case law that employers can act to protect their reputation and their business interests in many instances, but that they must first take steps to establish clear rules with their employees.  Establishing these rules, and then investigating whether or not an employee is complying with them, is not always easy.

We're running a series of seminars to help you work through these new and complex issues. LinkedIn to your Employees use of Social Media?will help you:

You can read more about our seminars by clicking here.

The latest research from Birmingham University suggests that skill shortages in STEM occupations are just a figment of manufacturers’ imaginations.

Their report suggests that only 46% of 2009 engineering graduates were in jobs related to their degrees. The rest were either in a non-engineering related graduate position or in non-graduate employment.

The conclusion is that the shortage thesis is wrong.

I’m not so sure and I checked their findings with our Chief Economist, Lee Hopley. Her response was straightforward - "I’ll see Birmingham University’s supply statistics and raise them some demand side facts".

Lee pointed to an EEF survey on the modern manufacturing workforce published earlier this year which showed:

• Over the next five years a massive 69% of manufacturers expect to be facing problems recruiting production-related engineering skills.
• Over a third are not confident that they will be able to find the design skills and technical skills they require for their R&D activities.
• Managers for manufacturing operations are also expected to be thin on the ground, with 25% of companies expecting to have difficulties recruiting them in the next five years.

Are manufacturers concerned? Yes. Another survey showed that for 62% of EEF members, difficulties in attracting and retaining the right skills poses one of the biggest challenges to growth over the next twelve months.

As ever, looking behind the headlines the real story is never quite so straightforward.

UK manufacturers are innovative, customer-driven and globally focused. Their competitive strength hinges on their design and development capabilities, quality and customer service. The breadth of these activities, many of which are carried out in the UK and central to our broader economic recovery, needs a host of specialist science, engineering and technical skills. But the pipeline of young people with the right STEM foundations and an awareness of the opportunities that a career in manufacturing can offer has diminished over the past decade.

If we are to succeed in rebalancing our economy we have to do much, much more to reverse this trend.

Is government regulation costing you money and time, causing you hr headaches or resulting in lost orders? Between 2002 and 2010, the cost to UK business of the annual flow of new regulation more than doubled from £5bn in 2002 to £11.5bn in 2010.

In tough economic times we need to ensure that regulation is kept to a minimum and is as well-designed and sensibly implemented as possible.

The ‘Red Tape Challenge’ (RTC) is an opportunity for business like yours to get involved and start addressing the issue and shape a better business environment. It’s a government initiative that invites businesses to tell them which regulations are not working and how they could be improved.

Manufacturing will get out of this exercise what it puts in. We can see it as a gimmick and sit on the sidelines or get involved and generate ideas.  We will be taken most seriously if we submit a considered and focused body of evidence.

EEF wants to do its bit. Our Chief Executive, Terry Scuoler, is acting as the ‘sector champion’ for manufacturing. In this role he is promoting participation in the RTC and working to ensure that manufacturers’ views are taken seriously.

We are pulling together issues from across our membership and beyond to demonstrate the breadth of regulations weighing down on UK manufacturing. A consolidated body of evidence will help give maximum impact to the industry’s concerns.

If you are a manufacturer whose business is being undermined by regulation, let us know and we will champion the issue on your behalf. Send a description of the issue and the regulation causing it to redtapechallenge@eef.org.uk 

This article was originally published on our Economics Blog.

We’ve received a steady stream of enquiries from members over the last few months about the Bribery Act. This new UK bribery law is due to come into force on 1 July and it’s clear that many businesses are struggling to come to terms with the full impact of its implementation.

The Bribery Act is a piece of criminal legislation creating a new corporate crime of failing to prevent bribery. Companies need to assess the risks of bribery throughout their operations and then implement 'adequate procedures' to control those risks. 

Companies will commit a new offence of 'failing to prevent bribery' if any employee or associate commits bribery with the intention of gaining a business advantage for the company, and the company failed to put 'adequate procedures' in place to prevent it. It does not matter if the company knew nothing about the bribery – the emphasis is on the procedures the company has in place, rather than its awareness of what was going on.

But what exactly will this involve? Is having an anti-bribery statement sufficient? How far do you need to vet your overseas agents? What about your supply chain? And what does the UK’s tough stance on bribery and corruption mean for 'routine' business practices, including corporate hospitality?

Is Government guidance on the Bribery Act enough?

The government has produced guidance on the Bribery Act, but it is not prescriptive.  The guidance is supplemented by 11 case studies, a surprisingly high number of which involve manufacturers.  Does this mean that manufacturers will be particularly under the spotlight? If so, then surely doing nothing in response to the Bribery Act - or adopting a wait and see approach - will be a risky policy.

Companies need to understand what compliance with the Bribery Act means in practice.

It's not easy for companies to access support from experts with both criminal and corporate governance experience. So with this in mind, we've partnered with Siemens Plc and corporate defence specialists Squire Sanders Hammonds to hold two half day seminars. They're particularly relevant to MDs, CEOs, Finance Directors and other board members, as well as people in your business who are responsible for auditing and compliance. I invite you all to join us there to explore how the Bribery Act will impact on our sector.

Delegates who attend will also be eligible for discounted access to a full compliance kit produced by Squire Sanders Hammonds, including an anti-bribery policy, a presentation to the board, a statement of intent to post on your web-site, an agents due diligence checklist and example clauses for third party agent contracts.

Our seminars are on 19th and 21st July - so there's only limited time left to secure your place - and your business.

The Agency Workers Regulations 2010 will come into force on 1 October 2011 and earlier this year we ran a series of seminars to help HR professionals understand the impact the Regulations will have on their business. Draft guidance has now been released, with final Department for Business Innovation and Skills (BIS) guidance likely to be available in April/May.

The Agency Workers Regulations 2010 (‘the Regulations’) provide that agency workers working for the same hirer for more than 12 weeks will be entitled to equal treatment in certain basic terms and conditions, including pay, as directly recruited employees of the hirer doing a similar job.

The Regulations also give agency workers certain 'day one’ rights, including no less favourable access to collective facilities and amenities (including access to canteen, child care and transport facilities) and the same opportunity as comparable employees to be told about job vacancies.

EEF has been part of a BIS working group looking at early drafts of the guidance. The way in which the guidance deals with particular issues will affect how you deal with agency workers on a day-to-day basis and could impact on how or whether you use agency workers in the future.

We expect that all companies who use agency workers will have to alter some of their practices. We are therefore running two series of seminars, the first in June and July and the second in September. Our first update, Agency Worker Regulations 2010: Filling in the gaps is designed to bring delegates up to speed on the content of the finalised guidance and its impact on how to apply the regulations on the ground. We will be looking at what the guidance means for previously unanswered questions. This seminar is aimed at HR professionals who have already attended our earlier workshops, Gearing up for the Agency Workers Regulations 2010 in February; or those who already have a good knowledge of the contents of the Regulations.

The second seminars, run in September, are a rerun of our hugely popular Gearing up for the Agency Workers Regulations workshops for those who missed them. Updated to include the revised guidance from The Department for Business Innovation and Skills (BIS), these seminars will explain the new law and help you plan strategically for the changes. Delegates will benefit from our involvement with BIS during the drafting of the regulations and guidance and will be able to share their ideas on a confidential basis with others facing similar issues.  These workshops are aimed at HR professionals who would prefer to attend a workshop which assumes no prior knowledge of Agency Workers Regulations.

As ever, we urge you to book early to secure your place at these popular events.

The government’s policy is to introduce new employment legislation on the common commencement dates of 6 April and 1 October 2011.  We look at what’s coming into force in April 2011.

What’s coming into force in April 2011

The default retirement age is being abolished from 6 April 2011 (subject to transitional arrangements covering employees who have received notification of their intended retirement before that date) – see our member briefing.

Fathers of babies due on or after 3 April 2011 will be entitled to take additional paternity leave (APL) of up to 26 weeks (along with other eligible partners) – see our members' mini-guide

From 6 April 2011, the Equality Act will permit ‘positive action’ in recruitment and promotion decisions, allowing employers to favour candidates on the basis of their sex, race, age or other protected characteristics in certain limited circumstances.  For more details, see our member briefing.

Finally, from 3 April 2011 the weekly flat rate of statutory maternity, paternity and adoption pay increases to £128.73.

What’s not coming into force in April 2011

Some legislation originally planned for April 2011 has been scrapped by the Government at the last minute or delayed.  This includes –

• Time off for training – the right to request time off for training was originally going to be extended to all employees but will now remain restricted to companies with 250 or more employees
• Flexible working – the current statutory procedures for requesting flexible working were due to be extended to parents of 17 year olds but the extension will not now be going ahead
• Bribery Act - The implementation of the Bribery Act has been delayed until 1 July 2011 to give employers time to implement the new government guidance on procedures to avoid bribery

Do you use agency workers? If so, you will need to be aware of changes coming into force in October 2011 as a result of the Agency Workers Regulations 2010. The new legislation on temporary agency workers will require a different approach by employers - and manufacturers need to understand the potential impact of the legislation and ensure they are prepared to make any necessary changes to their practices and procedures in good time rather than at the last minute.

The Agency Workers Regulations will give new employment rights to temporary workers - including equal access to site facilities such as canteens. The Agency Workers Regulations are lengthy and very detailed, but in essence they give agency workers three key new rights.

Firstly, agency workers will be entitled to the same 'basic working and employment conditions' as employees at the company in a same or 'broadly similar' role. These conditions are defined as terms relating to pay, working time, night work, rest periods and annual leave that are ordinarily included in contracts of employment of the comparator employee. 'Pay' includes overtime pay, shift allowances and premiums for unsocial hours, as well as certain bonuses. By contrast, pension and sick pay schemes, redundancy and maternity schemes, share schemes and profit-sharing schemes are all excluded. This right kicks in after the agency worker has completed a 12-week qualifying period.

Secondly, the legislation provides agency workers with certain rights from day one - no less favourable access to collective facilities and amenities, for example, such as canteens, changing facilities and certain transport services such as transfers between sites and local pick-ups. Thirdly, agency workers will have the right, from day one, to be afforded the same opportunities to find permanent employment with the company as its own employees.

The Agency Workers Regulations will not affect the employment status of agency workers, and so cannot be used by such workers as a conduit to gain rights dependent upon being an employee, such as the right not to be unfairly dismissed.

There are several issues that employers should consider now. As a starting point, calculate how many agency workers are used, the areas in which they work, and the length of time and key periods when they are used. For example, some companies use agency workers on an ad hoc basis, whereas others use them regularly to meet seasonal peaks. Companies need to understand the various reasons for using agency workers; HR departments could usefully open dialogue with individual line managers to establish this. For example, are agency workers used to cover staff absence, to save on overtime costs, or because the business is under-resourced? It is also important to establish the advantages (flexibility, for instance) and disadvantages (taking a long time to get up to speed) to your business of using agency workers.

Manufacturers should also take this opportunity to review relationships with agencies. For example, are different agencies instructed? Dig out the commercial terms that govern the relationship with the various agencies. Also, identify which managers authorise the use of agency workers and who, in practice, actually instructs the agencies. If an agency worker is required for longer than originally anticipated, what are the mechanics for making that happen?

Also, employers need to establish which basic terms are currently offered to new starters for various roles across the businesss, such as pay, holiday entitlement and bonus. This will ensure the information is on hand to provide to an agency, and will enable an estimate of additional cost for providing these same terms to agency workers who meet the 12-week qualifying period.

It could be worth introducing qualifying periods for new starters before they acquire certain benefits. Which employment terms or collective facilities are currently made available to employees and how difficult or costly will it be to extend access to these to agency workers from day one? Think, in particular, about access to canteens, changing facilities, car parking spaces, childcare and transport facilities. You may already have waiting lists in place for employees for over-subscribed facilities such as a creche which could apply equally to agency workers.

Finally, do you already make details of vacancies available to agency workers? If not, how are you planning to do this in the future? For example, could you place details on a noticeboard in the workplace that everyone - employees and agency workers alike - has access to? An audit of this kind is an important step to enable manufacturers to review the rationale for using agency workers, to look afresh at their relationships with agencies and to ensure they are well-placed to comply with - and minimise any adverse effects of - the forthcoming Regulations.

If you make use of agency workers, or plan to in the future, you should consider attending our forthcoming seminars - 'Gearing up for the Agency Workers Regulations' where we'll explain the important changes coming and how to deal with them.

This article was originally published in Works Management magazine.

By guest blogger, Westfield Health Chief Executive, Jill Davies

In the wake of the Government’s comprehensive spending review, low-cost, high-return options could become ever more popular contenders for employers looking for suitable employee benefits for staff.

When you combine this with increased attention on the importance of health and wellbeing in the workplace, you can see why corporate health cover is going far beyond simply renewing staff health insurance plans. Companies are, understandably, reviewing both outlay and cover. Employers want to maximise value for money without minimising benefits.

This is where the health cash plan (HCP) comes in. It’s low cost and it’s high impact. Traditionally a mainstay during tough times, the cash plan is, in some instances, finding itself to be the must-have product in the portfolio for many HR managers.  

But, what makes a good HCP?

HCP providers have always reflected the changing provision of the NHS to ensure their products are relevant. You’ll find many similarities between the plans on offer, from cash back at the opticians and dentists to physiotherapy. It’s easy to tell the difference here, the amount of cash back your employees will be entitled to is an obvious one. But, there are other details to look out for that could mean a lot to your workforce; are existing medical conditions covered? Is there a qualifying period before they can claim? These are some important variables.

One key differentiator is anticipating and matching changing healthcare needs, the proactive provider is the one striving to identify where provision and availability is diminishing, and expanding the range of benefits beyond the traditional HCP by developing innovative new products accordingly.

So what does this mean? Not all corporate HCPs are aligned to business needs and if an employee needs healthcare but has to wait, the business suffers. Leading providers recognise this and have developed products that are not just employee benefits, they are business benefits too.

Introducing scanning to the plan makes it easier for employees to achieve a quick diagnosis and a faster route to treatment, which means a quicker return to work. MRI, CT and PET scans, can help to diagnose serious conditions such as heart disease and cancer early, potentially at a treatable stage. So your workforce is likely to thank you for this too.

This need for maximum value at a time of increasingly squeezed budgets has helped to create a new perspective on HCPs for employers and employees alike - one of mutuality, where both the employer and the employee benefit. So what makes a good HCP? One that goes beyond the traditional cash benefits and takes care of the business needs as well.

Jill Davies is the Chief Executive at Westfield Health, an EEF Advantage Partner, find out more at www.eef.org.uk/membership/advantages

Lord Young of Graffham, the new ‘enterprise tsar’, recently confirmed on Radio 4's Today programme that the government is considering increasing the qualifying period for unfair dismissal.

As you will be aware, under the current legislation, an employee must in most cases have one year’s continuous service in order to be able to bring such a claim. The government is apparently considering doubling the length of that qualifying period by upping it to two years.

We think it likely that there will be a consultation period before any definite decision is made, but as yet there has been no announcement as to when that might be. What is clear is that an act of Parliament is NOT required to make the change. All that would be required would be an order made by the Minister for Employment Relations.

Readers may recall that the length of service needed to qualify for unfair dismissal rights has changed over the years. From 1985 to mid-1999, employees needed two years’ service to qualify for the right, but since then employees have required one year only.

Our view is that even if this change proceeds, employers will still not be able to be complacent with regard to how they treat their employees. Certain unfair dismissal claims do not require a qualifying period, for example where the reason for the dismissal is that the employee has made a protected disclosure or where it is a maternity-related dismissal.

In addition, employers still need to be aware of unlawfully discriminating against their workers under any of the ‘protected characteristics’ listed under the Equality Act 2010, namely sex, race, disability, religion or belief, sexual orientation, marriage and civil partnership, pregnancy and maternity, age or gender reassignment.

That said, we do think that the proposed change could be of assistance to employers particularly in genuine redundancy situations where they currently need to show that certain procedures have been followed to defeat an unfair dismissal claim – consultation, consideration of suitable alternative employment, fair and objective selection.

As soon as we hear more on the potential timetable for the proposed change, we will of course keep you posted!