UK Unveils Labor Reform Package Based on Taylor Review Recommendations

UK Unveils Labor Reform Package Based on Taylor Review Recommendations

The UK on Monday enacted a sweeping series of reforms to its labor laws, raising fines on employers for deliberately harming their workers and obliging them to give employees details of their legal rights from their first day on the job, among other changes. Based on the findings issued last year by the Independent Review of Employment Practices in the Modern Economy, led by Matthew Taylor, a former advisor to Tony Blair, the reforms are intended to strengthen the rights of agency workers and those participating in the gig economy, as well as to step up enforcement of existing labor protections. According to Personnel Today, the new legislation will:

  • repeal the Swedish derogation, which allows organisations to pay agency workers on cheaper rates than permanent staff;
  • extend the right to a written statement of rights from a person’s first day in their job to workers, going further to confirm their eligibility for sick leave and pay, as well as other types of paid leave including maternity, paternity and shared parental leave;
  • quadrupling the maximum fines handed out at employment tribunals to employers that have shown malice, spite or gross oversight from £5,000 to £20,000;
  • extending the holiday pay reference period from 12 to 52 weeks to ensure that those in seasonal roles are able to take the time off they are entitled to; and
  • lowering the threshold required for a request to set up information and consultation arrangements from 10% of employees to 2%.

In a report called the “Good Work Plan,” the government also pledged to enact further legislation so that employment classification tests “reflect the reality of the modern working relationships.” The Taylor Review had recommended that the employment status currently known as “worker” be renamed “dependent contractor” and that workers in this category be entitled to employment protections like the minimum wage, sick leave, and holiday pay. It also recommended enacting legislation to clarify the legal tests for different employment classifications, rather than relying on case law as the UK currently does.

The government’s reform package did not, however, ban the controversial practice of zero-hour contracts. Taylor had concluded that abolishing these contracts would do more harm than good, though his review also recommended that workers in zero-hour arrangements be entitled to request guaranteed hours after working for their employer for 12 months. The government of Ireland, in contrast, has said it plans to end most zero-hour contracts with a bill expected to pass the legislature in the spring. Whitehall’s decision not to ban zero-hour contracts drew criticism from unions, the Guardian reported on Sunday, with Trades Union Congress general secretary Frances O’Grady saying the government had missed an opportunity to strengthen the rights of a vulnerable segment of the workforce:

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The Talent Ramifications of the Brexit Deal (or No Deal)

The Talent Ramifications of the Brexit Deal (or No Deal)

The UK’s planned exit from the European Union is fast approaching, and a new deal over the terms of that exit faces an uncertain future in the UK parliament. Whatever happens, there will be talent implications for employers and HR leaders in the UK and Europe. Below is our broad look at the background of the process and terms of the latest proposed deal, and what the potential consequences could be — viewing several key issues through the lens of HR, including immigration, employment law, and the risks of a no-deal Brexit.

Fast Facts

  • The UK will formally exit the European Union on March 29, 2019, marking the deadline for UK and EU negotiators to reach a deal on an orderly Brexit transition. UK Prime Minister Theresa May has reached a draft agreement with the EU that would provide for a 21-month transition period, after which the UK would be able to control immigration from the EU, while backstop measures would allow the UK to remain in the EU customs union and enable a soft border between Northern Ireland and the Republic of Ireland if a final trade deal is not reached by December 2020. The transition period could be extended once, into 2022, if the UK and EU agree to do so.
  • A scheduled Parliament vote on the deal with the EU was delayed on December 10 after the May government realized the agreement would most likely be rejected. May then survived a confidence vote two days later, and plans to continue lobbying for the deal, which will not be scheduled for another vote in Parliament until sometime in January.
  • May’s deal, as drafted, would preserve the free movement of labor between the UK and other EU countries for the duration of the transition period, while any EU citizens living in the UK before the end of that period would have a right to stay, but would have to apply for residency documentation. Afterward, EU citizens would no longer have special privileges in immigrating to the UK. May has proposed a skills-based system for admitting immigrants after Brexit, but some business leaders and the National Health Service fear this system will leave them short-staffed in roles that would not qualify as high-skill under May’s scheme but for which native talent is in short supply.
  • The UK government has pledged to uphold employment laws based on EU regulations after Brexit, but some of these laws may be partly amended to be more flexible for employers or to reduce their liabilities. Unions, however, fear that these protections may be weakened substantially.
  • If there is no deal by the March 29 deadline, the UK will face a “messy” exit from the EU—likely causing severe economic disruptions. In the event of a no-deal Brexit, the UK would revert to trading with Europe under World Trade Organization guidelines, reintroducing customs and border controls. A no-deal Brexit can be expected to hurt the pound and cause instability in the British financial sector, which could spread to continental Europe and the rest of the world.
  • In a no-deal scenario, the government has promised that EU citizens’ immigration status would not change before 2021, but it remains unclear what employers will have to do to ensure that their European employees are able to continue living and working in the UK. Many businesses have put contingency plans into action to protect against the consequences of a no-deal Brexit, but most HR managers in the UK are underprepared for this scenario. In any case, Brexit is expected to result in a labor supply shock and make it more challenging for UK employers to fill job vacancies.

Background

On June 23, 2016, citizens of the UK narrowly voted to withdraw their country from the European Union. The “Brexit” referendum sent a shockwave through the British, European, and global economies, and prompted concern and uncertainty at many organizations in the UK and abroad.

Conservative Prime Minister Theresa May, who came to power shortly after the referendum in 2016, has worked to cut a deal with Brussels that preserves the UK’s strong trade ties with the EU, but has also stressed that no deal is better than a bad deal as far as her government is concerned. UK and EU negotiators deadlocked over several key points where London and Brussels are at cross-purposes, and uncertainty over whether and how these obstacles will be overcome has been a major source of anxiety for UK businesses over the past two years.

Chief among these issues are immigration and the free movement of people between the UK and the rest of the EU. May has stressed the need for the UK to “take back control” of its borders, even if it meant losing access to the EU’s single market. Free movement of people is one of the “four freedoms” underpinning that single market; the UK wants to preserve free movement of goods, services, and capital, while regaining the right to restrict immigration from the EU. For its part, Brussels has resisted creating new forms of special treatment for the UK that would make Brexit easier, partly to discourage other EU countries from pursuing exits of their own. Another, related area of disagreement is the border between the Republic of Ireland and Northern Ireland, which forms the UK’s only land border with another EU country. Many businesses on the island of Ireland have supply chains that cross that border every day and employees living on both sides of it; creating a hard border with customs and immigration controls would be costly and complicated for these organizations.

The deadline for reaching an agreement is March 29, 2019. If no agreement is reached, the UK will “crash out” of the EU and trade with the bloc under World Trade Organization guidelines. May announced on November 25 that her Brexit negotiators and their counterparts in Brussels had reached a draft agreement that would solve some of these challenges.

A vote on the deal in the UK Parliament had been scheduled for December 11, but May called it off one day before when it was clear that the deal was going to be rejected. Many MPs opposed the agreement, claiming the proposed Brexit is too hard or not hard enough, or because they believe the country should hold another referendum on the question before proceeding.

Prime Minister May said on December 10 that she would ask the EU for new “reassurances” on the deal, and in particular the backstop plan for the Northern Ireland border, which many MPs said they opposed. The EU has maintained they will not renegotiate the agreement, however. May’s government offered no specific timeline as to when there would be another scheduled vote in Parliament on this or any revised deal — but has said it will not happen until January. There is also a January 21 deadline to present the deal to Parliament. May survived a confidence v

Here is a broad outline of what might happen next and the key issues HR leaders need to understand:

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ReimagineHR: Creating a Seamless Digital Employee Experience

ReimagineHR: Creating a Seamless Digital Employee Experience

Outside the workplace, your employees are increasingly accustomed to seamless experiences as consumers in a digital environment. In their “five-to-nine,” they are shopping, watching movies, ordering meals, and hailing rideshares, all with a few taps on their smartphones. This rapid evolution in the consumer experience stands in stark contrast to their typical experience at work, where most employees remain mired in tedious digital processes and often find themselves expending a lot of effort on low-value tasks. From their consumer lives, they know there must be an easier way to schedule shifts, fill out expense reports, or enter data into spreadsheets.

Organizations that find ways to replicate the seamless digital consumer experience for their employees at work stand to gain in employee engagement, job satisfaction, and productivity. At Gartner’s ReimagineHR conference in Orlando on Tuesday, Leah Johnson, VP, Advisory at Gartner led a discussion with Alexis Corbett, Managing Director and CHRO at Bank of Canada; Archana Singh, CHRO at Wiley; Stevens Sainte-Rose, Chief HR & Transformation Officer at Dawn Foods; and Melanie Kennedy, SVP Human Resources at American Water, where attendees learned about how these HR leaders have been addressing this challenge at their organizations. The discussion surfaced a number of key themes:

The employee experience is about meeting business needs. A seamless digital experience for employee isn’t just a nice-to-have feature for its own sake; like every other aspect of digitalization, it must be designed to address critical pain points arising from today’s rapidly evolving business environment. At the Bank of Canada, the digital transformation came about as the bank faced an unprecedented capacity challenge, Corbett said, which necessitated an improvement in their people’s digital capabilities as technology took on new roles in their everyday work. Similarly, Kennedy noted, one of her core objectives at American Water has been to get employees excited about technology coming into a very labor-intensive industry and making them more effective.

People-focused digitalization also generates value by enhancing employee engagement; Singh, for instance said her goal was to create a “wow” experience for Wiley employees in every interaction. In an age of transparency, Sainte-Rose added, customer experience needs to match the team member experience. As companies endeavor to improve value for customers, they must apply the same thought process on the inside. Creating a better employee experience in the digital enterprise is ultimately about getting the best out of your people and creating more value for all stakeholders.

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ReimagineHR: In the Digital Age, What Does Great Leadership Look Like?

ReimagineHR: In the Digital Age, What Does Great Leadership Look Like?

Digitalization means much more for organizations than the adoption of digital technologies. It is a holistic change event that affects many fundamental pillars of how our businesses operate, including our people processes. One of these implications touches on how we select, develop, and deploy leaders, which has inspired a lot of concerned chatter about new “digital leadership” competencies that will make the most effective leaders of today and tomorrow dramatically different from those of the pre-digital era.

At Gartner’s ReimagineHR conference in Orlando on Monday, George Penn, VP and Team Manager at Gartner, facilitated a panel discussion with three experts in talent acquisition and development, drawing out their insights on how leadership really is changing in this new age, and which of these supposed changes are overhyped. Our panelists included Julie Loubaton, VP, Talent Acquisition at Keurig-Dr. Pepper; Christopher Lubrano, VP, Leadership and Organization Development at International Flavors and Fragrances; and Hari Abburi, VP, Global Talent at Dawn Food Products. Here are some key takeaways from Monday’s conversation:

Leadership fundamentals aren’t going anywhere

Foundational leadership qualities are still essential, Loubaton said. Businesses are, as always, looking for great strategic thinkers. Creativity, communication skills, and vision are as important as ever, the panelists noted, but these are not new. Lubrano also stressed the importance of fundamentals: Leaders today need a strong ethical foundation and an ability to connect with people and establish a sense of community among their team members. Again, these competencies have always been valuable elements of a managerial skill set. Strategic vision, creative thinking, and interpersonal skills remain table stakes for business leaders and most likely, always will.

So what is new?

Agility, adaptability, and the ability to lead fast-paced change are the key skills that are becoming more important for leaders in digital enterprise, the panelists said. Loubaton said her organization was looking for industry disruptors, who understand how to leverage new technology to upend traditional ways of doing business in their field and are not afraid to take that leap. Agile thinkers who are comfortable operating in a fast-paced, high-tech environment are becoming more valuable. Lubrano emphasized the importance of change management skills: creating urgency, maintaining focus, and clearing the path to new ways of working. The accelerating pace of change, Abburi added, means that while strategic planning skills are still fundamental, leaders now have to be able to formulate and execute strategies on a shorter cycle.

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ReimagineHR: 5 Ways HR Can Take the Lead in Digitalization

ReimagineHR: 5 Ways HR Can Take the Lead in Digitalization

In his keynote address at the opening of Gartner’s ReimagineHR conference in Orlando, Florida on Sunday, Gartner Group Vice President Brian Kropp shared a very salient figure with the hundreds of HR executives gathered in the room: 67 percent of CEOs tell us that if their organization does not make significant upgrades to its digital capabilities by 2020, it will no longer be competitive. “And if you work for one of the 33 percent,” Kropp told the attendees, “start polishing your résumés,” because those two-thirds of CEOs are probably right.

Digitalization is one of the most pressing challenges facing businesses today, and it’s not hard to see why. When CEOs talk about digitalization—in meetings, in employee communications, and increasingly on calls with investors—they frame it as a means of driving increased efficiency, productivity, and growth, the better to compete in a fast-paced and constantly changing business environment. However, Gartner research has shown that over the past five years, employees are exhibiting dwindling rates of discretionary effort: Just at the moment when organizations need to get the best out of their people, fewer of them are going above and beyond the call of duty. Meanwhile, labor markets in the US, Europe, and around the world are historically tight, so organizations have to work harder to find the right people and hold on to the valuable talent they already have.

As a result of these trends, HR leaders today find themselves in a situation where the CEO is demanding improved performance from employees, while employees are demanding an easier and more seamless experience at work that matches the app-driven, on-demand experience they are increasingly used to in their personal lives. Digital solutions are needed to meet these demands, but those solutions involve much more than merely adopting new technology; fundamental aspects of the way the organization works need to be rethought and redesigned for a digital world. HR has an enormously valuable role to play in ensuring a successful transition into the digital enterprise, but it’s not always obvious how to achieve that goal, and many organizations have been going about it the wrong way.

“What does digitalization mean to you?” Prompted with this question in a poll, Sunday’s audience responded with words like “efficiency,” “easy,” “seamless,” “simplicity,” and “experience.” These answers reflect HR’s unique mission today of driving business outcomes while (or better yet, by) improving the employee experience. Here are five of the key challenges posed by this new environment, and what—in brief—HR can do to tackle them:

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What Does Legal Marijuana Mean for Employers in Canada?

What Does Legal Marijuana Mean for Employers in Canada?

On October 17, Canada became the second country in the world after Uruguay and the first developed country to legalize the sale and consumption of recreational cannabis. Under the new law, adults will be allowed to possess up to 30 grams of dried cannabis—available for purchase only from government stores—and in most provinces will also be allowed to grow a maximum of four marijuana plants per household. Many of the details of regulating legal marijuana have been left to Canada’s 13 provinces and territories to decide for themselves, however, leading to potential variation from province to province in key regulatory issues such as the rights of employees who use the drug and their employers.

Smoking marijuana in workplaces remains illegal (as is smoking of any kind), but questions remain over whether Canadian organizations will be able to regulate their employees’ cannabis use off the clock and off the worksite. Workers in some fields will still face strict standards, the New York Times explains:

Employees who handle dangerous products or operate heavy machinery may face stepped-up or new drug tests. Airline pilots face tough restrictions on how near to the start of shifts they may use marijuana. The armed forces will have specific orders for its members and the Calgary Police Service has banned pot use by off-duty officers. The Royal Canadian Mounted Police and Toronto’s police force will ban most officers from using marijuana within 28 days of reporting for a shift.

Impending legalization had raised anxieties among employers in safety-sensitive industries, who were unsure of what measures they would legally be able to take to prevent employees from working while high. Part of what makes these claims difficult to adjudicate is that there is no simple metric for measuring marijuana intoxication; the chemicals in cannabis remain in the body for several weeks after it is used, and current drug testing protocols can’t determine precisely whether an individual smoked an hour ago or two days ago.

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How HR Can Make the Shift to an Agile Mindset

How HR Can Make the Shift to an Agile Mindset

As the digital age pressures organizations to rethink the way they design talent solutions, HR teams have begun adopting new, leaner practices already in common use in other business functions. The “agile” methodology, pioneered by software developers, is a highly iterative approach to design that relies heavily on end-user feedback. This approach can be successful in HR as well, but applying it requires functions to change not only their processes, but also their mindsets.

Most HR functions have traditionally designed HR solutions using the “waterfall” method, which includes an extensive requirement-gathering phase, after which a design team creates and implements the solution. A small group of users typically tests the solution only at the very end, shortly before wide-scale deployment.

The waterfall method (and the mindset that accompanies it) has historically served HR well because it’s ideal for an HR function aiming to solve as many employees’ problems as possible, for as long as possible. However, many HR functions are finding that their solutions aren’t as adaptable as they need to be to keep up with the rapidly-evolving demands of their end-users: i.e., employees. Employees want assurance that HR systems and processes will be personalized to fit their needs and will evolve as those needs change, but they’re also willing to supply detailed feedback to get there.

Enter the agile approach, which has gained traction thanks to its efficiency in responding to change. The workflow in an agile project draws a stark contrast from the waterfall method in that end-user feedback drives every aspect of the process. Whether an agile HR specialist is addressing issues in a payroll process, designing a new training series, or implementing a new HR information system, they collect employee feedback at every step along the way to guide their continued iteration, then continue refining products between design cycles until end-users are satisfied.

Of course, making the transition to an agile HR function and an agile mindset can be challenging. Here are six changes HR leaders can make to help embed the agile mindset in their teams:

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