Purpose is a two-faced god

first_imgPurpose is a two-faced godOn 1 Feb 2001 in Personnel Today Is the law deliberately designed to make your life difficult? Some days itis hard to believe it isn’t. Here two leading lawyers sound off about someparticularly topical bugbears. And, they warn, don’t expect things to get anybetter…Purpose is a two-faced godBusiness constantly asks the law to give certainty. Increasingly it fails todo so and many wonder why. One reason is that these days we are constantly toldthat our laws should be interpreted “purposively”. In other words,look for what the legislator intended to mean and don’t worry to much about thewords actually used. This can be beneficial – it plainly makes the law lessrigid – but it is not a good recipe for certainty. This is particularly so whenthere are different views as to the chief purpose of a particular law. Purposecan vary with the perspective of the onlooker and this can foul things up foreveryone. Take an example from The Transfer of Undertakings (Protection of Employment)Regulations. Many people buying businesses plan changes to increase efficiencyand profitability. Most of these changes will be “measures” withinEuropean and domestic law. Since 1981 the law has required measures to be thesubject of consultations with employee representatives. Employers are requiredto consult “with a view to reaching agreement”. It seems from this that the legislator would take a benign view whennegotiations take place and result in an agreement being reached. In otherwords the purpose of this law is to encourage agreements. What could be betterthan employers and employees considering the future of a business together andagreeing a way forward? Then see what the judges did with this law. According to the ECJ and theHouse of Lords, any agreements reached by employees in these consultations arenot binding. The judges’ reasoning is that, in their view, the principlepurpose of the directive is to protect employee’s rights. Apparently, employeesneed protection so much that their elected representatives or trade unionscannot be trusted to look after them when a business changes hands, even if thenew deal leaves employees better off. So, like Janus, purpose seems to be a godthat looks in two directions at once. Many will ask: why bother to consult if no agreement can be relied upon?Because, to add insult to injury, you will be sued if you don’t. The law saysthat you may have to pay up to 13 weeks’ pay to each affected employee if youdo not consult. Remember, too, what may have to be done to begin consultation.If a workplace has no recognised trade union (and three-quarters of workers inthe UK are not in trade unions) or no representatives exist, then electionsmust be held to identify them. The trouble here is that no one has been able to cut through the morass ofgood intentions and settle on a sensible balance of interests. In 1998 the DTItried to persuade European legislators to allow representatives to do deals foremployees without success. In the end everyone is left to muddle throughdespite the law – all because the judges and legislators cannot agree on itspurpose. Fear the worst: there is much more where this came from! Stephen Levinson is a partner at KLegal, the law firm associated withKPMG Guilty until proven innocent?Handling a sexual harassment claim is one of the most difficult problemsfacing employers. The sensitive nature of such complaints, the potential forunlimited compensation and above all the difficulty in balancing the rights ofthe victim and the alleged harasser while determining the issues, means eventhe most experienced human resources manager must tread carefully. The latest Equal Opportunities Review survey reveals that compensation insex discrimination cases averaged £7,208, representing only a 5 per centincrease over the previous year. This contrasts with an increase of no lessthan 65 per cent in compensation in race discrimination cases now running at anaverage of £9,948.   There were only 206sex discrimination cases which resulted in compensation awards and thestatistics suggest that sexual harassment which, after all, only represents apart of the discrimination total, is, at least in terms of financialconsequences for employers, small beer. However, the practical experience suggests the reality is rather different.The great majority of cases settle, and no figures are available which giveeither the numbers or the compensation paid. The true cost to the employerincludes absences through ill health, management time spent in investigation,compensation paid to victims, costs of replacing staff sacked for harassmentand, of course last but not least, lawyers’ fees.  If identifying harassment is sometimes difficult, determining liability canalso be complex. The “strict liability” test raises the spectre ofemployers being liable for the actions of employees in the course of theiremployment. Employers will be held liable for sexual harassment about whichthey were informed but which they did not seek to remedy. But what if the employerdoes not know about the harassment? An employer is still potentially liable forthis because the law actually states that the employer is liable for adiscriminatory act by an employee “whether or not it was done with theirknowledge.”There is no doubt that sexual harassment can blight the lives not only ofvictims, but also those wrongly accused. While it is not always easy to form aview on the rights and wrongs of a particular case, I am confident I haveencountered instances where a relatively junior employee has “played thesexual harassment card” in an attempt to wreck the career of a seniorconsidered, for one reason or another, to be an enemy. No smoke without fire isan all too common reaction. It is vitally important that the investigation processwill not only uncover sexual harassment where it takes place, but also thosewho make wrong accusations who should, of course, themselves then be subject todisciplinary action. The position under UK law is that the onus of proof always remains with theperson alleging sexual discrimination albeit, where less favourable treatmentis established and not explained, the court or tribunal is permitted to draw aninference of discrimination. This is all set to change under a EuropeanDirective on the burden of proof in sex discrimination law. The UK has until 22July to comply. The directive requires that when people establish facts fromwhich it may be presumed there has been direct or indirect discrimination, itshall be for the employer to prove that there is no breach of the principle ofequal treatment. It might be thought this would have no obvious application in sexualharassment. What facts have to be established in order for there to be apresumption of discrimination resulting in a reverse of the burden of proof? This is not an easy question. If special attention given to an individualwas shown, would it then be presumed that that was on account of sex? Wouldthat create a situation where the burden passed and any doubt had to beresolved in favour of the person alleging sexual harassment?  How would that stand in relation to theHuman Rights Act? These are all difficult questions but at the very least, theburden of proof directive can only encourage sex discrimination claimsincluding those relating to harassment. Anthony Fincham is employment partner at CMS Cameron McKenna Comments are closed. Previous Article Next Article Related posts:No related photos.last_img read more

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Web site of the week

first_imgWeb site of the weekOn 20 Feb 2001 in Personnel Today Previous Article Next Article Comments are closed. Ifyour new global status means you need to know the structure of the Greek tradeunion movement in a hurry or how many public holidays Iceland has, then youwill thank your 13 EU stars for the European HR-related data resource from theFederation of European Employers (FedEE). TheFedEE site can rightly claim to be a pioneer in informational Web sites, havinglaunched in 1995 on the back of a wire service introduced six years before.Manyareas of the site are free to access but to get the maximum out of it, werecommend joining the FedEE at £316.46 plus VAT (renewable in August 2002 – seeterms and conditions) so you can enter the members’ section. Thisis broken down into four sections – pay data, employment law (withcountry-by-country summaries and legal profiles by Baker & MacKenzie, modelpolicies (soon to feature flexible working,equal opportunities and employeerelations), and a presentation section, offering downloadable slide shows formembers who cannot always make the federation’s seminars. HRprofessionals can also sign up to e-mail alerts, join an e-group, where you canpost a message for fellow professionals to discuss, and shop at a handybookstore.http://www.fedee.com/ Related posts:No related photos.last_img read more

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BNFL improves safety by working with unions

first_img Comments are closed. British Nuclear Fuels has dramatically improved the safety record atSpringfields nuclear plant through fostering a close working relationshipbetween management, staff and the union. A partnership agreement with the AEEU at the site has reduced the number ofserious staff accidents from 56 in 1990 to zero, Andrew Donovan, head of HREuropean Fuel Business of BNF told the IPA Partnership & Performanceconference last week. Donovan claimed that the more open working environment that HR has developedhas also seen staff grievances reduced from 20 a year to zero. This has been achieved despite the prospect of job losses at the Lancashireplant in the future, as the BNF tries to increase its competitiveness. He said, “We’ve gone through huge change and we’ve taken the tradeunions and the workforce with us. Our next challenge is to manage job lossesand keep the right people here.” The partnership agreement included training and “getting to knowyou” sessions between management and union reps, and led to joint workingon shared issues like safety and training. Closer working meant that the site was able to develop a new policy of staffownership of safety across the site,” said Donovan. Related posts:No related photos. Previous Article Next Article BNFL improves safety by working with unionsOn 16 Oct 2001 in Personnel Todaylast_img read more

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Ericsson woos talent with brand values

first_imgThis, inturn, leads to better retention rates and lower recruitment costs as bothpersonal and professional concerns are so closely matched, he explained. Previous Article Next Article Related posts:No related photos. MarkRitson, assistant professor, Department of Marketing, London Business School,also told delegates that a better appreciation of consumer branding enables HRto target potential employees with similar values. Thecompany’s Excellerate scheme specifically identified four areas of thecorporate brand that meant most to consumers, which were international reach,technological excellence, intelligence and innovation. Speakingat the conference, Sven-Ake Damgaard, director of Excellerate, Ericsson CLO,told delegates that the company intends this group to form the basis of theirboard within the next 10 years. He said,”Brand equities structured the content and participants in Excellerate. As aresult the company has managed to cut the overall cost of recruitment to 25 percent of salary and reduced staff turnover among its top management recruits to6 per cent compared to an average of 56 per cent.center_img Ericsson woos talent with brand valuesOn 30 Oct 2001 in Personnel Today Comments are closed. “Thereare two things that are needed to win the war for talent. You need to get toknow your brand and use that as a lighthouse for your HR strategy,” headded. Ericssonthen recruited from the world’s top 25 business schools to find the candidatesmost closely aligned to its brand values. “Aftertwo years of the course we found the values of the brand inside the people.People had brought into the brand and become part of the brand.” Ericsson hashelped attract its next generation of board members by highlighting the firm’sbrand values during its management recruitment process. last_img read more

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Website of the week: www.longservice.com

first_imgWebsite of the week: www.longservice.comOn 4 Dec 2001 in Personnel Today Comments are closed. Previous Article Next Article Nobody acknowledges the importance of rewarding long service more than HR,but finding the time to administer and manage it in a structured way isn’talways easy. Longservice.com, owned and run by WH Business Gifts, offers asimple, Web-based system that takes care of the whole business. Service periodscan be determined online (for instance, five years, 10 years and so on) and arecognition level allocated for each one. Once Longservice is supplied with thenecessary employee data (this can be done annually or monthly), the systemrecognises when an employee is coming up for a service reward, and provides fora gift to be chosen for them or by them from the appropriate recognition level,and then delivers it. HR can control whether it wants the gift to be deliveredto the recipient’s home or to be presented, and can choose from optionsincluding personalisation. There is no set-up fee or contractual agreementrequired, and the service can be extended to birthdays and leaving presents.The site allows you to take a simple tour and clicking on the “HRinvolvement” section will explain exactly what the HR department has to doto get it up and running. Related posts:No related photos.last_img read more

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Broadening your horizons

first_imgRelated posts:No related photos. Broadening your horizonsOn 4 Jun 2002 in Auto-enrolment, Personnel Today Comments are closed. Previous Article Next Article Executive MBAs offer the chance to study part-time for an invaluable degreewhile experiencing different countries and cultures. Leah Larkin spoke to EMBAgrads around the world – and found universal approvalDemuri Kasradze, 34, a surgeon from Tbilisi, Georgia, could not support hisfamily on a physician’s salary in his native country. He switched to business,started his own company and is now working towards a Cross Continent MBA atDuke University’s Fuqua School of Business, North Carolina. Lisa De Boer, 32, holds a doctor of pharmacy degree. She, too, wanted out ofthe clinical environment. De Boer, from Madison, Connecticut, started her ownconsulting company and now pursues a Duke Cross Continent MBA (tuition$74,000), taking courses both in Germany and the US – while running her companyat the same time. “I think it’s worth it,” says De Boer. “My husband [aphysician] has an MBA and no longer practices medicine. He thinks his MBA ismuch more valuable than his MD.” There is no mass exodus from hospitals and laboratories to boardrooms, butnow, more than ever, an MBA is seen as a ticket to success. After several yearson the job, more workers are heading back to school in pursuit of the coveteddegree – most on a part-time basis. These days most part-time programmes areknown as the executive MBA (EMBA). They are geared toward more experiencedpeople who are working full time. The Executive MBA Council, a non-profit association of universities andcolleges, states that 185 schools worldwide, which are members of theorganisation, offer 212 different EMBA programmes. The council estimates thatbetween 75 and 100 students are enrolled in each programme. “Even during the economic slowdown, schools are doing well. Studentsare using this time to beef up their knowledge. Enrolments are up,” saysWilliam Cox, director of Cox Communications Consultants and author of severalbooks on MBA education. Many schools, including Duke University’s Fuqua School of Business, nowstress a ‘global’ aspect to their programmes to enhance their reputation. Theyadd international courses to their curriculum, recruit more students fromabroad and offer short trips or residential stints in other countries. Coursesare usually taught in English, although there are some bilingual programmes,such as the International Executive MBA. This one-year programme, whichcombines distance learning with residential periods in Madrid and Miami, isoffered by Madrid’s Instituto de Empresa. Degree price tags can be high. Duke charges $95,500 for its Global ExecutiveMBA, a 19-month programme comprising five two-week sessions of residentialstudy, two in the US and one each in Europe, Asia and South America. In betweeneach residential programme is a10-week period of virtual class work via computer-mediatedlearning. Duke’s $74,000 Cross Continent MBA is a 20-month part-time programmecombining residential classes in Frankfurt, Germany, and the home campus inDurham, North Carolina, interspersed with learning via CD-Rom and the internet.Like many new programmes at other institutions, both programmes rely heavily ontechnology for distance learning. Such programmes incur substantial start-upcosts because they are entirely new on the market, said Eric Weber in a recentFinancial Times article. Weber is director of MBA programmes at IESE BusinessSchool at the University of Navarra in Barcelona, which offers a global EMBA at68,000 euros ($60,000). He also points out that EMBA class sizes are generallymuch smaller than those of regular MBA programmes, yet another factor drivingup the cost of an EMBA. Most of those enrolled in these costly programmes deny that making moremoney is their primary motive. Yet a salary increase has to be a strongincentive. The Financial Times reported last October that the average salaryincrease over five years for those graduating with an EMBA in 1998 was 76 percent. After three years, the average salary of an EMBA graduate from the LondonBusiness School was $144,000. The newspaper found that EMBA graduates fromEuropean schools led the way in salary increases, dispelling the myth that theMBA is not as highly rated in Europe as in the US. Scott Murphy, 29, an engineering manager with an oil and gas contractor inHouston, is paying 80 per cent of his Duke Cross Continent MBA tuition himself.”I think it will pay for itself, hopefully many times over,” hesays of the degree. He hopes to move up within his company “and at leastmarket myself to other industries if I decide to”. Gaston Aussems, 30, a senior consultant with PWC Consulting in Amsterdam,has seen a 50 per cent salary increase since he earned his MBA degree from theRotterdam School of Management in December 2000. He originally worked in IT,but has since moved into management. “I wanted to expand my horizons inmanagerial and business aspects and improve my career options. You can getstuck in a technical field,” he says. Now he is more aware of business andeconomic trends. “I can create value for my company and clients,” hesays. “This will be a ticket for me to become a senior executive,” saysScott Lane, a Duke student, during a week of study in Frankfurt. The accountingmanager from Minneapolis willingly admits he’s after both money and status. Hewas looking forward to an interview for a position as a financial director withhis company when he returned from the week-long study period in Germany.”If I were not in this programme, they would not interview me,” hesays “Without this programme, I’d have to wait years. That’s the value.”Marcus Bernhardt, 41, a general manager and regional director for RadissonSAS Hotels & Resorts, earned an EMBA at his own expense at the GraduateSchool of Business Administration Zurich in 1992 while working for a hotelcompany in Arosa, Switzerland. Back then, MBAs were not common in the hotelindustry, he says. “I wanted to increase my personal value and dosomething no-one else in our industry was doing. It was a good choice.”The hotel industry executive, now based in Brussels, has seen his salary jump80 per cent since 1994 when he earned his EMBA. As the EMBA increases in popularity, so does the variety of programmesavailable. “In recent years schools have had to find new modes ofdelivering the MBA,” notes Peter Calladine, educational service managerfor the Association of MBAs. Traditionally, a part-time MBA involved going toclass two evenings per week. Then schools began to offer classes one full dayper week. For more variety, they offered Friday evening and all-day Saturdayprogrammes. Thanks to the internet, the trend, as pioneered by Duke, has nowmoved to periods of residential study followed by weeks of home study, oftenonline. As Calladine says: “Schools must match the requirements of theindividual to fit their working life.” Duke University’s Fuqua School of Business earned top recognition for itsMBA programmes in the early 1990s. Felix Mueller, the school’s director ofmarketing, said Duke wanted to be certain it remained at the top, and decidedthis could best be achieved by combining globalisation and technology. In 1996the school, which already had a weekend EMBA programme, launched its GlobalExecutive MBA “for executives with an average 14 years experience andglobal responsibilities”. The hefty $95,500 tuition fee covers books, classmaterials including a laptop computer and software for distance learning, pluslodging and meals at the residential sites. Travel to and from the variouslocations is not included. In August 2000, Duke started its Cross Continent MBA on two continents. Eachof the eight 10-week academic terms begins with a week at one of the two campuslocations, either North Carolina or Germany. Currently, 151 students from 26countries with an average of 6.2 years of working experience are participatingin this programme. The $74,000 price tag includes all instructional materials,accommodation and meals at the campus locations, and a laptop. While Duke’s programmes are among the priciest, students – even thoseabsorbing the costs themselves – are willing to pay huge amounts for a school’sranking and prestige. “I wanted a degree from the top 10,” says DukeCross Continent MBA student Scott Lane, who is paying 50 per cent of histuition himself. He could have gone to the University of Minnesota, “butpeople go there to earn what I already earn”. Peter Calladine of the Association of MBAs is no fan of the kind of rankingsLane describes. “There is no such thing as the best school per se,”he says, “especially for part-time programmes.” What’s important isthe programme best suited to an individual’s needs, he explains. Some schools, such as the UK’s Manchester Business School, offer flexibleprogrammes. Manchester’s EMBA can be completed in as little as two-and-a-halfyears, or as long as five years, with students typically spending about sixhours a week at the school. IMD Lausanne offers 17.5 weeks of classroomsessions and “discovery expeditions” in Europe, Silicon Valley andShanghai, reinforced by 45 weeks of distance learning. The programme can becompleted in two to four years. Some, however, do not consider the Manchesterand IMD programmes true EMBAs as students do not start and finish together as agroup. The Rotterdam School of Management offers a weekend part-time Executive MBAprogramme with classes held on alternate weekends. Warwick Business School’sEMBA can be earned by attending evening classes, by modular study, or by a ‘mixand match’ of both. In their effort to go global, schools are joining forces with partnerschools in other parts of the world. The London Business School and ColumbiaBusiness School offer a joint EMBA programme under one name, the EMBA-Global($102,500). Theseus Institute in Sophia Antipolis, France, this year launchedits two-year EMBA (31,450 euros, $28,000) in partnership with The AndersonSchool at UCLA, with specialisation in managing in a high-tech environment. TheGerman International Graduate School of Management and Administration (GISMA)in Hanover, in conjunction with the US’s Purdue University, has a 22-month EMBAprogramme, costing 30,600 euros ($27,000). “It’s attractive to have study periods in various parts of theworld,” says Nunzio Quacquarelli, editor of magazine MBA Career Guide, andmanaging director of TopCareers.net. “This ensures participants will meet seniormanagers from different cultures. This is a very important part of the learningexperience of an executive MBA.” Duke student Thomas Kindler, head ofnetwork operations for Deutsche Bîrse Systems, agrees. He was motivated topursue an EMBA “to build up an international network”, in addition toshifting his focus from technology to business, he says. The One MBA is a new part-time programme to launch in September. It is thebrainchild of five business schools: the Chinese University of Hong Kong; Fundac‹oGetulio Vargas (S‹o Paulo); the Monterrey Tech Graduate School of BusinessAdministration and Leadership (Mexico); the Rotterdam School of Management; andthe University of North Carolina at Chapel Hill. Executives enroled in this21-month programme study at their home business school for two-thirds of theprogramme and spend the remaining third of the programme together inresidential modules in Asia, Europe, North and South America. The cost is46,500 euros ($41,000). Yet another new programme is the Trium EMBA, allying the New York UniversityStern School of Business, the London School of Economics and Political Science,and HEC Paris, Graduate Business School. The 16-month programme involvesresidential sessions at these three locations, plus Hong Kong and Brazil, andcosts $87,500. No matter where they are located, all EMBA programmes seem to have onelearning aspect in common: team projects with fellow students. Participantsgive high marks to this type of study, which they consider an added bonus toearning an EMBA as opposed to a regular full-time MBA. Marcus Bernhardt, who earned his EMBA in Zurich, stresses the value of‘active and practical oriented discussions’ with fellow students who hadexperience in the business world. Same for Duke student Scott Murphy, whoespecially likes the fact that his fellow students all have work experience.”You can learn just as much from the students as from theprofessors,” he says. “This would not happen in a regular MBAprogramme.” Michel Arres also liked working with fellow students. This Rotterdam gradsays his programme involved a lot of group activities. “You’d learn to seethe other side of things. Group interaction is very important. Sometimes wewould get together during the week to work on projects. Sometimes we’d meet indifferent places – Dusseldorf, Utrecht. We picked the most central place. Itwas really fun.” The 34-year-old, formerly in sales, is now a member of the Europe, MiddleEast and Africa team working on strategy for American Power Conversion inRotterdam. In his present job, as in sales, he works with customers, he says,but now on a higher level. “An MBA helps you understand the problems thecustomers are facing. I can talk their language.” As technology plays a greater role in today’s EMBA programmes, virtualteamwork becomes part of the learning process. “You learn what’s it’s liketo interact with your counterparts when they’re not around. This will be big inbusiness in the future,” Duke student Eric Altshuler points out. Holding down a demanding full-time job and following the rigorousrequirements of an EMBA programme is no easy feat. Many executives in theseprogrammes spend far more than 40 hours a week on their jobs. “It is verydifficult to balance family, friends and work,” says student Lisa De Boer,at Duke in Frankfurt. In addition to time on the job, she needs 20 hours perweek for school work. Gaston Aussems echoes her comments: “If you are willing and able to paythe price, in many respects the EMBA is a must,” says the seniorconsultant. “On a corporate and social level it gave me more than Iexpected. An EMBA is demanding, but a great investment. Your input is returnedten-fold.” The typical EMBA studentAge: 37Sex: 75 per cent male, 25 per cent femaleYears on the job: 15 Years of management experience: 10Average salary at time of     beginningprogramme: $85,000Source: The Executive MBA CouncilCompanies seek to gain knowledgeWhile companies such as the Germanpharmaceutical and chemical giant Merck and Deutsche Bank absorb most, if notall, costs for key employees seeking an MBA, they want their employees to studypart-time and stay on the job. As Deutsche Bank’s Michael Maffucci, director ofglobal leadership development, points out, Deutsche Bank wants the knowledgegained by those seeking an MBA transferred back to the institution. “Oneof our main thrusts is that we get a transfer of knowledge and skills,” hesays. Merck likes the fact that the part-time MBA candidates itsponsors at Ashridge Management College near London often have studyassignments that are directly related to their jobs. “The link tocorporate business is a big advantage,” says Andreas Janz, Merck’s head ofinternational management development programmes. “Assignments can give adirect contribution to the company. It helps that students apply their learningto Merck.” The company found that many of its employees with scientificbackgrounds were moving into management positions without a businessbackground. “We like to prepare them, to help them acquire the knowledgeto fill these positions,” says Janz.Companies that sponsor employees in an MBA programme usuallyhave an agreement that the employees stay with the company during the period ofa study and for a specified time afterwards. The Financial Times 2001 Survey ofa sample of students who earned part-time MBAs in 1998 found that 43 per centwere still working for the same company that employed them five years afterthey began their studies. According to a Business Week 2001 survey of those whoearned MBAs with company support, more than half were dissatisfied with careerdevelopment at their sponsoring companies.Janz acknowledged that ‘a few’ of Merck’s MBA employees haveleft and that retention can be a problem. “This is a challenge.High-quality people are harder to retain. They’re attractive to othercompanies,” he says.Not all part-time MBA seekers have company backing. Some pickup the tab themselves. They want to combine work and study and keep their jobs,often because they cannot afford to quit work and study full time. “It wasnot financially feasible for me to stop working and go to school full time. I’dacquire an enormous debt,” says Gaston Aussems, who earned a part-time MBAfrom the Rotterdam School of Management.Jane Fiona Cumming, director of Article 13, a London-basedorganisation that helps businesses and other institutions implement new ways ofdoing business, finds one of the key advantages of earning an MBA while stillworking is that academic projects can often benefit both the company and thestudent. “An MBA is no use if you can’t translate it into practice,”says Cumming, who earned an MBA as a part-time student at the CharteredInstitute of Marketing in Henley, UK. “I was able to ask my clients, ‘Doyou want a free consultancy?’ and base my projects around them.”last_img read more

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UK workers are the most insecure about their jobs

first_img Previous Article Next Article UK workers are the most insecure about their jobsOn 8 Apr 2003 in Personnel Today Comments are closed. The UK’s working population suffers more anxiety over their jobs than staffemployed in any other developed economy. A survey by Right Coutts of nearly 10,000 staff worldwide, shows 28 per centof the UK’s workforce believe they could lose their job in the next 12 months. The second most insecure workers are in the US, where 27 per cent areconcerned about the future of their jobs. In Japan, 20.5 per cent of staff have job security concerns, while thefigure in Germany is 14.9 per cent, and 13.7 per cent in France. Just 4 per cent of workers in Italy are worried about their jobs, and only5.7 per cent are worried in Belgium and Norway, making them the most secure. Jo Bond, deputy managing director at consultancy Right Coutts, said staff inthe UK and the US feel least secure about their jobs because employers havemore power to hire and fire in these countries. “This survey shows that job insecurity is being felt most by UK staff,despite the recent fall in unemployment seen in UK government figures,”said Bond. “Workers in some countries – notably Belgium and Italy – are lessworried about redundancy, perhaps due to the existence of stronger lawsprotecting employees’ rights in those countries. “By contrast, the US and UK job markets are more flexible, andemployers have more power to ‘hire and fire’.” However, the study also reveals that UK workers are relatively optimisticabout their chances of obtaining similarly paid jobs if made redundant, with 21per cent believing this would be easy, compared to just 4 per cent in Germany,and 8 per cent in Italy. By Ben Willmottwww.rightcoutts.co.uk Related posts:No related photos.last_img read more

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Breaking with tradition

first_img Previous Article Next Article Breaking with traditionOn 10 Jun 2003 in Personnel Today Comments are closed. Related posts:No related photos. Forthcomingpensions legislation will make some radical changes, including allowing workersto continue in a part-time capacity and limiting the amounts built up by topexecutives. HR needs to prepare the ground now for some truly groundbreakingchanges to the system. Sarah Ball reportsMostpensions commentators have branded the recent Department of Work and Pensions(DWP) Green Paper Simplicity, Security and Choice a damp squib, which won’tactually change anything. And HR folk may be tempted to put their feet up whilethe pensions pack get on with another few years of worthy, yet incomprehensibledebate over areas of the private and state pension system that the Governmenthas failed to reform. But,as every HR director who has been around the New Labour legislative block a fewtimes knows, it is the employers who are usually expected to deliver throughgood practice to avoid overly-prescriptive measures. The pensions path whichlies ahead is no exception. Whenthe new proposals were launched in December last year, Andrew Smith MP,Secretary of State for Work and Pensions said: “We believe that thepartnership between the Government, individuals, employers and the financialservices industry has long been a strength of the pensions system in the UK,and that the proposals we are setting out today will renew this partnership andreaffirm the responsibilities of each member.”Whetherthere are enough incentives for employers to go the extra mile is an unresolveddebate beyond the scope of this article. But there is still enough food forthought for HR to get its teeth into – especially as some of the legislationcould be in place as soon as this time next year. Forthe pensions purists, the platter promising the juiciest morsels is the accompanyingTreasury and Inland Revenue’s Green Paper – Simplifying the taxation ofpensions: increasing choice and flexibility for all. Chris Jackson, a solicitorat Hammonds, says: “The tax proposals, due to be introduced as early as2004, could be the radical reforms that actually do reshape UK pensions.”ColinSinger, a senior consultant at Watson Wyatt, highlights how some of theproposals are great news for HR directors currently reviewing their pensionscheme designs. All existing tax regimes for pensions will be replaced by asingle system.Hesays that under the current Inland Revenue (IR) rules, there is only so muchsurplus a defined benefit scheme can accumulate. Since 1987, schemes have notbeen allowed more than 105 per cent in their fund without being taxed. This isreally out of date – no scheme these days has anywhere near this much surplus.Singeroutlines the possibilities: “An exciting avenue that may be opened by thenew regime is greater flexibility of design,” he says. “This isperhaps particularly so for ‘risk-sharing’ designs that lie between pure finalsalary and pure defined contributions (DC).”Thekey to unlocking such designs will be the funding flexibility envisaged in theregime which, if twinned with an appropriate mixture of guaranteed anddiscretionary benefits, may result in a better balance between members’guaranteed benefits and employers’ guaranteed costs than either of the polarextremes of final salary or defined contributions.” TomMcPhail, of corporate independent financial advisers Hargreaves Landsdown, saysan area of priority for HR directors in the tax proposals will be the changesaffecting your most senior and/or long-serving staff. “It is worthapplying some due diligence in this area now, just in case the proposals docome in next April.” Contributionsby employers and staff would continue to attract tax relief, but the changecomes where the limits for this will extend to 100 per cent of earnings subjectto a £200k per annum ceiling. “This means that an employee can build up apension in very short space of time if they wish,” says McPhail.Butthe really big news is that total pension fund accumulations will be capped ata lifetime limit of £1.4m. Twenty-five per cent of the fund’s cash will beavailable tax-free, and pension will be taxed as earned income.  “Sometransitional arrangements will protect people with pensions already over £1.4m,but the new limits will otherwise operate retrospectively,” McPhail adds.”Funds that breach this will be subject to a 35 per cent recovery chargeon the amount over the limit and all benefits taken from the excess funds willbe fully taxable – an effective tax rate of 60 per cent.” Thisis pretty steep, so senior staff will want up-to-date information on theirpensions to make informed choices.  SimonMartin, head of research at Aon Consulting, warns the proposals will have adivisive effect by giving senior staff a minimal stake in the company pensionscheme. “Pensions schemes work best when they include all employees,”he says. “However, these new tax proposals are particularly penal onsenior executives.  It should bepossible to have a fair tax treatment for all employees, but in this case theGovernment has taken its objective of simplify the tax regime too far.”Gettingyour administrative ducks into line is another area to review before nextApril. Geraldine Brassett, a consultant at Hewitt Bacon & Woodrow, assessesthe costs employers need to be prepared for when it comes to implementing thenew IR and DWP proposals. “Oneof the aims of the proposals is, in the longer term, to drive downadministration costs. The simplification of the tax regimes should help toachieve this, but this needs to be balanced against the flexibility aroundpayment of benefits and the fact that there will almost certainly besubstantial set up costs when the changes are introduced.”Shesays the extent of these initial costs will obviously vary depending on theexisting scheme design, the age and capability of the current administrationplatform and changes in communication around processes.”Assumingno changes to existing individual scheme designs – although we know this willbe likely for a large number of schemes – we estimate that the costs could bein the region of £5,000 to £25,000 per scheme, although this could be more ifimplementing these changes necessitates a significant one-off expenditure, suchas purchasing a new administration system.”Changesrequired will not only be to software, but also to processes and procedures andpossibly member communications, and Brassett advises HR directors not tooverlook these areas. Althoughthe tax proposals potentially contain more substance, the DWP’s Green Paperdoes merit another glance from HR directors. In brief, it outlines the suite ofvoluntary mechanisms the Government wants to employ, to help avoid theso-called ‘pensions crisis’.Itreiterates that our increased longevity means we cannot sustain the state‘pay-as-you-go’ pension system unless we work longer or save harder, or both.Of particular note is chapter 6, Extending Opportunities for Older Workers,which looks at how to encourage and facilitate a larger proportion of people inthe 50-plus age group to remain economically active.Thisdovetails with the consultation paper that the Department of Trade and Industryis due to launch this summer, regarding a new EU directive which will outlawage discrimination by 2006. Organisations can currently set their own normalretirement ages, beyond which staff are unable to sue for unfair dismissal.This is set to change. JamesDavies, a partner at Lewis Silkin Solicitors, thinks the Government will imposea default normal retirement age of 70, and that it will be up to organisationsto justify anything below this. “Pre-established succession planning, or agenerous occupational pension scheme might be grounds for exemption, but theseare obviously matters for the consultation.” Otherwise, staff who want tocarry on working will have the right to do so.Accordingto research by Penna Sanders and Sidney, 93 per cent of employees would extendtheir working lives if offered flexible working arrangements. TheGreen Paper on tax contains proposals to encourage flexibility, but for somethey have not been implemented soon enough.AonConsulting’s Martin says: “At the moment, a full-time employee close toretirement cannot switch to part-time work and start drawing a pension, butthey can do so if they leave to join a direct competitor. This is a ridiculousimposition by the Inland Revenue, and is a major disincentive to companieswanting to retain valued older employees.”Typesof pension scheme designDefinedbenefit (DB) or final salary schemesTraditionallythe main type of scheme provided by large UK employers, typically related tothe employee’s final salary at retirement. The employer promises the employee acertain proportion of salary at retirement and takes on the risk and cost ofproviding it. Contributions from employer and employees are put into a fundmanaged by trustees. Careeraverage revalued earnings (CARE) Anotherform of DB scheme, but is based on average salary (adjusted for inflation) overthe whole career, rather than on final salary at retirement. The employer stilltakes on risk and cost in the same way as for final salary schemes. Definedcontribution (DC) or money purchase schemesThefastest growing type of company scheme in the UK (and elsewhere). The amount ofpension the employee eventually gets depends on various factors, includingmoney contributed by and employee and employer and annunity rate at date ofretirement.Thecompany can set up its DC scheme under a separate trust, managed by trustees(as for DB schemes), or can pay into a contract with an insurance company (seePersonal and Stakeholder Pensions below). StakeholderThesespecial DC schemes came in during 2001, and in broad terms, employers who didnot then have an occupational scheme had to designate a stakeholder providerfor their employees. It aims is to increase private pension provision forbelow-average earners. Contributionsfrom both employers and employees are entirely voluntary, despite unionpressure for employer ones to be compulsory. The insurance provider’scharges  for administration is capped at1 per cent.Personalpensions Theseare individual insurance contracts, usually taken out by employees outside ofwork pensions and rarely used by employers. Broadly the same as stakeholderschemes, but without the capped insurer’s charges. Hybridschemes Thesecombine DB and DC in a variety of ways – a DB scheme might guarantee some modest level of final pay, but pays outthe value of an underlying DC pot if greater.Grouppersonal pensionsAversion of personal pensions used by some employers. The provider bundles theindividual personal pensions together (on enhanced terms normally), andpresents them as an employer scheme using payroll deduction and worksitemarketing. Stakeholder pensions run by employers are also normally grouped in asimilar way. Tosee the first part of this two-part article on forthcoming pensions legislationand for a fuller explanation of types of pension scheme, go to www.personneltoday.com/goto/19143LegislationchecklistYouwill need to get advice on how your pension scheme(s) may be affected by:Spring2003     Statutory Money PurchaseIllustrations introducedMid-2003        Publication of consultation paper onimplementation of the age discrimination aspects of the EC Framework DirectiveMid-2003        Next round of consultation on theprotection of pension rights on TUPE transfersDec2003         Extension of limit forback-dating pay in equal treatment claims from two to six yearsDec2003         Latest date for UK Governmentto ban discrimination in employment on grounds of religion or sexualorientation (EC Framework Directive)Early2004       TUPE regulations on futurepension rights expectedOct2004         UK Government to removeemployment exemptions from Disability Discrimination Act 1995 (EC FrameworkDirective)Apr2004         Earliest date forimplementation of new simplified pensions tax regimeJan2005          Full implementation of FRS17required in relation to accounting periods ending on or after 1 January 2005Dec2005         Estimated implementation datefor EC Pensions DirectiveDec2006         Latest date for UK Governmentto ban discrimination in employment on grounds of age (EC Framework Directive)2010                Minimumearly retirement age (other than for ill-health) increased from 50 to 55last_img read more

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News

first_imgNewsOn 1 Sep 2003 in Personnel Today Related posts:No related photos. This week’s newsCareer uncertainty Nearly half the UK’s health and safety professionals say they either willnot or may not be working in the industry in 10 years’ time, according to astudy by busi-ness information provider Croner. The survey found 52 per centsaid they would be in the industry, while 30 per cent said no and 18 per centwere unsure. Fair weather skivers The hot weather last month prompted as many as 7.5 million workers to takeunauthorised time off to bask in the sunshine, finance directors believe. Asurvey by recruitment agency Reed found 27 per cent of finance directors feltemployees had bunked off to enjoy the sun. Supporting A&E staff Hospital staff in the A&E department at University Hospital Aintree havebeen given access to a support service to help them cope with the strains ofthe job. The hospital’s support team holds induction days for new staff,explaining the role of the service and what it offers, and see staff in groupsand individually on a confidential basis, to help them deal with stress andanxiety. Tie dangers Wearing a tie can increase the dangers of suffering from serious eye conditionssuch as glaucoma. A study in the British Journal of Ophthalmology(2003;87:946-948) found tightness around the neck restricted the jugular vein,which raises blood pressure, particularly around the eyeball. Comments are closed. Previous Article Next Articlelast_img read more

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School leavers dismiss ‘boring’ council careers

first_imgSchool leavers dismiss ‘boring’ council careersOn 2 Dec 2003 in Personnel Today Related posts:No related photos. School leavers are rejecting careers in local government because they seethem as dull, bureaucratic and hard to get into. Research by communications company Riley HR Gardens also shows that youngpeople thought local authority jobs would not challenge their initiative andthat skills gained would not be transferable to the private sector. The survey asked more than 100 first jobbers and school leavers whether theywould like to work within the local authority sector – two-thirds of schoolleavers ranked local government jobs as 1 or 2, with 1 being ‘not at all’ and 5being ‘very much’. The findings show that councils must work harder to engage youth. Only 14per cent of school leavers had discussed local government with careersadvisers, but, of those who had, 80 per cent expressed an increased interest inlocal authorities. The failure to attract school leavers is in marked contrast with graduates,who find local government the fifth most attractive employer in Britain,according to the Association of Graduate Recruiters’ Gradfacts survey. Andreas Ghosh, chairman of the Society of Personnel Officers’ recruitmentand retention working group, said that local authorities needed to promotethose jobs that would appeal to young applicants. “The perception of working in local government is often influenced byan image that most of the jobs are working in ‘the town hall’,” he said.”In fact, most are jobs that interact with local communities such asteachers and working with the environment.” Comments are closed. Previous Article Next Articlelast_img read more

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