Problems for Royal Mail

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This week will see further strike action by members of the CWU (Communication Workers Union) within Royal Mail as a result of disagreements over job cuts and reductions in service. As ever, there are two sides to every dispute.

The Trade Union believes that Royal Mail is failing to invest properly in modernisation and is removing jobs without agreement;

Royal Mail believe that changes are essential, but the Trade Union is opposing them

The Trade Union believes that service quality will be compromised by the reduction in jobs;

Royal Mail believe that the Trade Union need to join the Company in tackling the challenge by the increase in electronic media

The Trade Union have called a series of strikes in key locations over the next week to highlight their case;

Royal Mail have condemned the CWU for striking locally over much-needed modernisation and change and said that they are expecting 90% of their staff to be working normally.

• Which government agency could be involved in mediating in such a dispute?
• What steps must a Trade Union take before calling its members out on strike?
• What action can (and can't!) a company take against striking employees?
• What other examples are there of organisations that have struggled to introduce change to working practices as a result of technological change?
• Now that the Royal Mail no longer has a monopoly over the delivery of mail in the UK, how is this likely to restrict the immediate impact of the strike action?
• Further Research Activity: compare the cost of sending a simple letter through thedomestic mail in different coutries. Do your findings make you more supportive of either the Royal Mail or the Trade Union

Hard times for recruitment consultancies

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Michael Page, who are one of the largest recruitment consultancies in Britain, have announced that their profits over the first six months of 2009 have fallen by 49%, leading to the worst set of financial figures reported by the company since they were listed on the UK stock market eight years ago. Although the company still employ nearly 4000 staff, they have had to reduce their workforce by more than a third since the beginning of this year. Clearly they blame the downturn in the labour market for their performance, and there is no immediate hope at the end of the tunnel as the summer period is renowned for being a quiet time for recruitment.

• What practical steps can recruitment consultancies take to ensure that their business remains viable?
• Why might companies that are recruiting choose to manage the process themselves rather than engage a recruitment consultancy?
• What businesses other than recruitment consultancies are likely to be affected by a downturn in the job market?
• What businesses and organisations may be required to recruit additional staff as a result of an increase in joblessness?
• Despite reporting such a dramatic drop in profits, shares in Michael Page went up rather than down. Why might this be?

Time for government intervention on excessive pay?

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Although few would now argue that there should be a legal requirement for a minimum wage, calls for a High Pay Commission to curb excessive pay will inevitably create a stir in the boardrooms of the UK. A number of major public figures have added their names to the campaign of Compass (a UK centre-left “Think Tank”) to do just that, and the campaign is already receiving a high level of media coverage and comment. Compass argue that the current economic crisis was largely fuelled by the high salary and bonus culture particularly within the finance and banking sector, and that now is the ideal time for the government to be taking action. The argument is illustrated by an example of an employee on the national minimum wage who would have to work 226 years to earn the same amount as a Chief Executive of a FTSE 100 company earns in just one year. Compass also argue that top managers are often rewarded for short-term success, but never penalised for long-term failure. Especially as many of the failed banks are now in public ownership, it’s argued that the government has a moral obligation to set reasonable pay structures within such institutions.

• What’s the current national minimum wage in the UK?
• It’s often argued that large institutions (particularly financial organisations) have to pay their senior managers seriously high salaries, otherwise they would be recruited by rivals, or possibly tempted to move overseas where salaries may be higher. As the UK is as deep in the financial crisis as the majority of other industrial nations, is this argument valid?
• Many organisations have introduced links between the company’s performance and the financial reward of all employees. Typically, a professional employee (earning around £25,000 per annum) may receive a bonus of 5% if the company hits all its performance targets. The Managing Director (probably earning upwards of £100,000 per annum) may receive a bonus of over 40%. Is the motivation to perform the same for both employees?
• What other mechanisms may a company wish to introduce to share the financial success of the business between all employees?
• What do you believe will be the reaction of the UK public to the call from Compass for a High Pay Commission?

A few thoughts about Works Councils

It may come as a surprise to learn that the English Trade Union movement was closely involved in the rebuilding of post-war industrial Germany, in particular in establishing the framework of employer/employee relations. In contrast to the UK which now has a wide range of somewhat complicated employment legislation, the German legal framework is relatively straight forward, especially concerning the duties and responsibilities of Works Councils, the bodies that are charged with ensuring harmonious working relationships within organisations. The role of the Works Council is to “safeguard the interests of the employees in dealing with the employer. The Works Council and the employer shall work together in a spirit of mutual trust and co-operation with the trade unions and employers’ associations for the good of the employees and of the establishment.” German employment legislation also lays down, for example, those business issues where the company is required only to inform the employees of its plans; those where consultation is necessary, and those where negotiation is called for.

• What are the differences between informing, consulting and negotiating with a workforce.
• What are the advantages and disadvantages of a relatively simple employment legislation framework, both for the employer and the employee?
• What are the benefits and drawbacks for a company in being required by law to have to inform, consult and negotiate with employees on a range of issues?
• The legislation referred to above essentially applies to all companies with a head office in Germany. Why might an English or US firm that is merging with a German company wish to set up its new head office outside Germany?
  

Taxi!

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Reports in the UK press indicate that pressure is being put on the government to introduce legislation to restrict the number of hours that taxi drivers are allowed to work before a formal break is taken. As many taxi drivers are self employed, they can claim exemption from the European Working Time Directive which would otherwise limit them to a maximum 48 hour week, with regular breaks every six hours.

On the one hand, taxi drivers who have been working for long periods without a break clearly represent a safety risk to their passengers, and therefore safety campaigners argue that such legislation is neccessary. On the other hand, many taxi drivers argue that the introduction of such legislation would limit their ability to earn a decent wage.

• Should the government be able to enforce legislation which, although increasing safety, makes it difficult for self-employed people to make a living?
• The rules affecting taxi drivers date back to 1831. What should be the attitude of the government to updating potentially out of date legislation?
• Many taxi drivers work for small companies (or are possibly self-employed). Should employment legislation apply equally to large and small organisations?
• When a taxi driver who has been put under pressure to work excessively long hours is involved in a serious accident, who should be held responsible?

If it's Friday, this must be ...

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Rising unemployment, companies asking their staff to work shorter hours, banks being taken back into state ownership, concern over the level of directors' pay, support for left-of-centre political parties dropping to a record low: sounds a lot like the UK, but all the items in this list are actually from this week's news in Germany (where the managers and staff of HR Case Studies have just enjoyed a well-earned break in the land of bratwurst and lederhosen)

And just as in the UK, how HR can help companies survive the recession, the increasing role of women in the workplace, and getting the most out of existing employees are key themes to be discussed at Zukunft Personal, the European HR Exhibition and Convention that is to be held in Cologne next month.

• What are the obstacles to implementing in one country HR initiatives that have been developed in another?
• How much is language a barrier that prevents our understanding of HR best practice in another country?
• Although we often speak of the UK and the USA being two countries divided by a common language, is it inevitable that there will generally be more understanding and therefore exchange across the Atlantic Ocean than across the English Channel?

European rules to prevent doctors from working long hours introduced in UK

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The European Working Time Directive, which prevents employees from working more than 48 hours per week has been applied by the UK government to junior doctors. Organisations responsible for training doctors have said that the legislation will limit opportunities for training, but the government believes that the requirement has already been met by 97% of the NHS. A spokesman from the BMA (the body that represents doctors) has stated many doctors may be pressurised to lie about how many hours they are actually working.

• Is it resonable for a government to limit the number of hours that individuals work?
• Was it safe for doctors to work up to 100 hours per week as was the case in the past?
• Individual doctors can still opt out of this legislation and work more than teh 48 hours. Is this acceptable?
• How can it be checked that doctors are not either being encouraged to opt out, or lie about the number of hours worked?
• If a patient received ineffective (or perhaps life-threatening) treatment from a doctor who had been pressurised into opting out from the Working Time Directive, who should be held responsible?