Following adoption of the EC Directive on informing and consulting employees, the UK Government will be introducing legislation to establish a right to new minimum standards for information and consultation in large firms. According to the Department of Trade and Industry, the basic case for these new standards is fair treatment for people at work.
The UK economy
Dialogue between employee and employer is clearly failing in some sectors of the UK, with strikes on the tube, the rail network and in Local Government. The EC Directive on worker consultation will make partnership between employer and employee, or union, mandatory. Can it lead the UK away from another 'winter of discontent', or will it just add another layer of red tape for business to deal with? Two scenarios for the future of employment relations in the UK might be:
Scenario One: 2014 - Workers rule
Government and industry are being held to ransom by workers being involved with business decisions at all levels. Striking may be a thing of the past, but so is the UK's competitiveness on the global stage. Foreign direct investment is fleeing the country and the manufacturing is at an all time low.
Scenario Two: 2014 - Thirty years on from '1984'
Workers are operating under increasingly oppressive conditions. As the thought police patrol every staff coffee room, it is estimated that the UK economy is losing £3 billion a year due to absenteeism and stress. There is a stand off between industry and the unions, and with weekly strikes across public services, the country is on its knees.
Yet the UK Government maintains that the Directive can be used to promote high performance workplaces, partnership and employee involvement... is it worth business' while to engage with employees?
The new economic paradigm
With globalisation markets are becoming increasingly competitive. Add to this rapid technological advances and shifts in consumer preferences, and its easy to conclude that business is operating in a new economic paradigm. Organisations need to find ways to attract and retain the best employees, as new sources of competitive advantage are to be found in a business' intangible assets, such as intellectual capital.
High commitment... high performance
The key to unlocking the value in these intangibles can be to engage with your employees. A workforce that is informed about, and consulted on, business decisions is more likely to offer ideas (innovation), get greater job satisfaction (low staff turnover and increased productivity) and understand, work towards the company vision and feel ownership of the business (sustainable and productive organisation).
Industrial change is inevitable but Government realises that it needs to be handled sensitively, especially when it may involve redundancies. Managing the process well - including keeping staff properly informed and involved - is a vital part of good employment relations, and employees deserve no less. It can also benefit relations with the staff who remain. Many UK businesses have already shown the benefits that can be had from this approach, even in times of economic difficulty. Article 13's own research has shown that the most visionary companies are moving from a 'show me' to a 'trust me' to an 'involve me' culture.
The barriers to implementation
Critics of the Directive have argued that employers could be forced to reveal commercially sensitive information. And if the pendulum swings too far towards employee consultation, companies will be effectively paralysed in the decision-making process. According to Tom Flannigan, at London-based law firm Stephenson Harwood , "The fear is there could be a very fundamental change in the way employees and their representatives can enforce their rights in the UK which could involve, for instance, slowing down or even preventing the business decision being made until there's been information and consultation.”
There are also often barriers to employee involvement, particularly when the driver is to restructure the business to meet new market opportunities. Some workers will feel unsettled, and gaps in the skills base of the workforce quickly become evident.
There is a productivity gap between the UK and competing economies, and effective communication between management and employees is one of the factors that can increase productivity in the workplace. But talking shops have no place in the modern workplace - engagement must be action-focused and linked to the organisation's business objectives. If any of this sounds familiar... it's because we at Article 13 see the strategy of engaging with your employees as one of the central tenets of corporate social responsibility. Done in the 'right' way, it can be a strategy that can deliver innovative ways to drive continuous performance.
For further resources, go to www.article13.com. See the 'best practice' section for how organisations are delivering business benefits through working in partnership with employees.