Complete Guide to HR Strategy: Employment Law (With Examples)
Employment law is a weighty responsibility for HR practitioners, as it has the potential to drastically impact the organisation.
In the last year alone, HR practitioners have been dealing with the after effects of legislative changes, gender pay gap reporting, settled status for EU workers and more! Employment law shifts to reflect the state of the workforce and gaps within the existing legislation.
While this is undertaken with the best intention, it does mean that HR practitioners must feed legislative changes and their own legal knowledge into their HR strategy.
Current Employment Law Practices
Throughout your HR strategy, you should be focusing on the goals that you want to achieve. This can be trickier within the bounds of employment law, as generally the goal here is to avoid litigation and ensure a legal workplace!
Evaluating the current environment of the workforce is important, as there may be gaps within the existing policy. Ensuring compliance is essential, so take time to investigate any systemic issues fully. This can be an early goal for the policy, as you work to address any existing concerns.
It’s possible that some of these issues may be flying under the radar, such as missed dates for compulsory training, patchy paperwork or new policies that have not yet been actioned. These can slip through the gaps due to a lack of accountability; in a large HR department it can be assumed that another employee will pick up this task but has never followed through on this.
You may also consider revisiting employee employment statuses. There have been several new rulings in this area that may impact current employees. If you use any agency workers, then this is especially important as they may be incorrectly classified, which can impact dismissal terms.
Working to rectify these at the earliest convenience will reduce the harm that they can have. For example, it’s easier to backpay workers a year of incorrect wages than several years. Although these errors may not have been noticed by regulatory bodies yet, it’s only a matter of time before they come under scrutiny.
Ensure that you’re keeping up to date with recent cases in employment law, as you may gain insight into your own practices. Misunderstood legislation might hit these headlines, which may prompt a change in your organisation. These cases may also be landmark judgements, as they will also clarify circumstances in play within other organisations.
This long-standing courier company utilised the gig economy by allowing delivery drivers to indicate their availability to receive shipments. However, during a tribunal, it was found that these drivers were not contractors and were deserving of holiday pay.
Addison Lee and other couriers have been operating in this manner on a large scale in the last few years. This landmark case investigated the fact that the contract between the contractor and employee wasn’t indicative of the true nature of the work.
Although the contract mirrored those used by the likes of Uber, the tribunal found that the contractor didn’t have the autonomy to refuse deliveries.
- Addison Lee will be required to provide holiday pay, minimum wage, pensions, and other rights to their couriers.
- Landmark ruling that may impact other contracted employees.
- Addison Lee lost the right to appeal further in this case after one unsuccessful appeal.
There are many legislative updates that you can mark in your strategy well in advance to ensure that they’re taken care of annually. You can anticipate these and plan actions around them.
Setting reminders at the same time of year to anticipate the increase of the National Minimum Wage, changes to pension contributions and modern slavery statement will ensure that you’re always in the know.
HR can also take an active role in the financial implications of these increased costs, spurring other departments to mitigate the negative effect. This could involve sales and finance departments changing pricing to ensure that profit margins remain consistent, even when operating costs and wages increase.
The run up to these effective dates in April can be a stressful time for HR, but if you clearly mark this time out then you’re better prepared.
This should filter into your strategy, as you create time and space to ensure that the organisation is always operating within the law. You can fit other policy updates into other areas of the timeline, as voluntary policies should take a back seat to legal obligations when resources are stretched.
Within your strategy, you can include information on when you plan to make these changes. You don’t have to drill down to a granular level if you’re simply providing a high-level view of your HR activities, but you should note these key compliance actions.
There are significant penalties associated with failure to pay minimum wage. The UK government can fine 200% of the amount not paid up to £20,000 per worker, as well as ordering the organisation to pay backpay.
Many companies have fallen foul of this, not just due to their hourly rate but also because they are required to pay out of pocket for expenses such as uniforms. Wagamama required their staff to buy black jeans as part of their uniform; a deduction that would dip their wages below the National Minimum Wage.
- Wagamama ordered to pay £133,212 to 2,630 workers.
- Bad press and poor PR for this brand.
New Policies and Procedures
Alongside this host of predictable changes, there are also unexpected ones that you should ensure you’re keeping up to date with. As an HR practitioner, it’s your responsibility to understand and implement these changes.
Using the XpertHR legal timetable will help to inform you of any changes that you need to action in the workforce in advance. These often come as a result of new case rulings, though the government usually gives an adjustment period for changes to be actioned. This doesn't mean that you should wait until the deadline to address them, as this time is for you to plan and prepare for implementation.
Through the course of your HR strategy, you may also build in new initiatives for staff which also require documentation changes. These should also be outlined in advance to allow for allocation of resources. Phasing in new initiatives is preferable for HR, as it allows for due diligence and teething issues to be cleared up.
For overarching initiatives, it may be necessary to consult with a legal expert to understand any implications that may not have occurred to you. Attempt to implement policies fairly, without discrimination, otherwise you may be ordered to pay a penalty to workers that were not afforded the same opportunities.
When changing an employee’s contract, it’s also important to give appropriate consideration for the change. Restrictive covenants may not be upheld in court, so consider whether these are really necessary for your workers. Increasingly, courts are siding with ex-employees on restrictive covenants, as they can be seen as unrealistic and unreasonable.
Distributing this information is also a key part of this strategy, as you should have a plan in place to ensure all employees are made aware of these changes.
This doesn’t mean that you personally have to tell each employee individually, but you need a communications plan to distribute information through the hierarchy.
If you are planning large-scale changes, then consider the other documentation that this will impact. For example, if you change your sickness policy then consider if this should also be changed within employment contracts. Failure to do so could result in inconsistent information, which could be misinterpreted by employees.
For each change that you anticipate within your strategy, you should have a timeline and hierarchy for distribution. You should also include dates by which you’ll amend supporting documentation, such as employee contracts.
Legally speaking, it’s best to have employees confirm receipt of any new policy information. A simple signed and dated policy update can save a company legal troubles in the future.
In this case, workers pushed back against changes to the absence policy of the workplace, which was set out in their staff handbook and contract. The Department for Transport sought to change their absence policy to be less lenient, which was found to be to the detriment of their staff.
Although they used a unilateral variation clause, stating that these policies could be changed at any time, the High Court held that these could not be made to the detriment to employees without their consent.
The High Court also found that the employer had failed employees by removing previous versions of the contract from their internal systems. This meant that employees could not access prior versions of the handbook to examine any changes between versions.
- The Department for Transport were obligated to return to the previous absence policy.
- They were also advised to retain copies of previous documentation.
- All employers advised that vague unilateral variation clauses should be used with caution and should not be viewed as carte blanche to make changes to the terms of employment.
Due Diligence with Managers
While you may have a breadth of HR knowledge, this doesn’t mean that best practice is always being followed. Managers are often the first port of call for many workplace issues and they may not always seek advice from HR before acting.
Regular management training with HR is essential to protect the organisation fully and should be outlined in your HR strategy. Deciding when you will hold these training sessions, who should be involved and the policy documents to be distributed will form a key part of your strategy.
Refreshing existing knowledge and introducing new information around policies will make for smoother employee relations. Ad hoc training may need to be added to respond to arising issues, but this can be implemented as and when required.
In this case, Northumberland County Council did not make reasonable adjustments for an employee with a disability leading to an unfair dismissal.
The manager of the employee also created a hostile environment, using phrases like how long “this disabled thing” would last and that the manager felt “like she wanted to poke [the employees] eyes out”. While procedures were in place to assess the health of the employee and support in her return to work, the line manager did not support this and used harassing language.
In the judgement, the lack of training that the line manager had received was highlighted:
“Despite her senior role, this witness had received no training on disability or the duty to make reasonable adjustments.”
- Northumberland County Council were found to have failed to make reasonable adjustments, had discriminated against the claimant and unfairly dismissed her.
- Two other employees were incited to create their own claims against the employer for unfair dismissal in the aftermath of the tribunal, further damaging their reputation.
In the post-GDPR HR department, data protection is more important than ever before. Employers are responsible for the protection of their employees’ data. In HR, we have access to information must be protected through a multitude of systems.
Employers should be aware of these responsibilities and you may need to filter these into your HR strategy. Over time, this may mean migrating your current filing system to a more secure one and changing permissions for users that should no longer be able to access this data.
System migration takes time and resources, so ensure that you outline how you will undertake this in your HR strategy.
Setting deadlines to fully transition to a new system also increases the likelihood of this happening. All too often, this essential maintenance can fall by the wayside in favour of more pressing matters. However, a lack of commitment to data protection can seriously damage a company financially.
In a landmark ruling, supermarket chain Morrisons were found to have failed to protect their employees’ data. While the data was accessed unlawfully by a disgruntled employee, this was still ruled as a failing by the employer.
The employee in question was able to access the details of 100,000 employees through their existing file system. He then leaked this information online, which included bank details, salary information and national insurance numbers.
Affected members of staff brought a claim for compensation against the supermarket, as they trusted their employer to keep this information safe. Because of these leaks, the employees argued that they were left open to identity theft and associated financial losses.
- The High Court ruled that employees were entitled to financial compensation for distress and loss of time dealing with the associated fallout.
- A precedent has been set that employers are still liable for data leaks in cases in which a rogue employee intends to cause damage.
- Morrisons have spend £2 million dealing with the breach and associated costs.
Above and Beyond the Law
In many cases, the law is the bare minimum that employers should be striving for. By going above and beyond this minimum, employers may skirt legal action altogether.
In the case study above, Wagamama received a fine because their requirement to buy clothes put employees below minimum wage, but if they had paid more than the minimum this wouldn’t have been a legal case. Similarly, had Addison Lee voluntarily offered perks to their gig workers, they would have avoided litigation.
Consider whether offering better rewards and enhanced compliance will save your employer money in the long run. Being generous and fair with your employees can even feed into other strategies, such as talent management and total rewards strategies.
The employment law landscape is ever changing, and this should form a key part of your HR strategy. Utilise your strategy document to outline important changes and provide a roadmap for compliance.