Inflation and how to avoid unstable employee relations

The Chartered Institute of Personnel and Development (CIPD) have produced new research which shows that most employers agreed that the UK is likely to enter a more unstable period of employee relations. The research suggests that this is being fuelled by the rising cost of living causing wages to fall in real terms and the overall tightening of the labour market.

Employee relations can break down and this leads to either individual discontent or if this takes place on a wider scale can lead to significant industrial action. The CIPD suggest that more than half of UK employers believe we are about to enter a more unstable period of employee relations and employers believe that they can expect to face more industrial action in the next 12 months.

Toby Pochron, Employment Law Director at Freeths LLP said: “Three words - Communication is key. Employers need to take decisions about how to manage their workforce and they should always strive to be in control of that narrative and openly communicate with their staff at a formative stage in the decision-making process. Not only will this reduce acrimony later in the process - it keeps employees engaged in the common aim of seeing the business succeed.

“Employment law obliges employers to consult with staff and their representatives on a number of core matters - whether these be health and safety issues, changes to pensions, transfers of employment on a business sale / outsourcing or collective redundancy and if that business recognises a trade union there are further obligations towards collective bargaining. These (amongst others) are what employers are obliged to consult upon. Fail to do this and there are a whole host of penalties and claims that await such a breach.

“Communication with staff is not just about ticking those basic boxes for compliance with employment law - it can be a constructive tool that an employer utilises to ensure that staff are engaged in its culture, values, morals and aims.  Getting this right with both discussions with trade unions or by setting up a specific “works council” to act as a voice for employees can be an invaluable tool.”

What is encouraging from the CIPD research is that whilst half of employers believed that we were entering a new phase of potential unrest, employers are positive in general about the climate of employment relations and how their managers can engage with trade unions.

Melanie Morton, Managing Associate at Freeths LLP, commented: “The mere mention of the union can make an HR professional shudder. But gone are the 'them and us' days - HR can form a key bridge between employees and management. A positive working relationship with employee reps and unions can build trust, improve staff morale, enhance internal policies and procedures and give everyone a sense of involvement. Engagement with employee reps and unions is therefore encouraged.”

Toby added: “Unstable employment relations does not just result in the substantial impact that a strike action can have. Where employees lose faith in their employer, productivity can reduce, overtime is more commonly refused and cooperation can diminish. The impact of these industrial actions (which are born out of unstable employee relations) are harder to measure than a day of strike action and can have significant and far-reaching effects.

“Engaging early on in opening up communication channels with trade unions, establishing a works council / voice for employees and implementing changes based on feedback produced can give security to staff that they know their views are heard, listened to and acted upon. When times are difficult for the employer having a unified workforce with a common goal can be an invaluable resource and this can be forged by solid channels of communication.”

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If you have any queries on the topics discussed please contact our specialist Employment team.