Employment Low

EMPLOYMENT AND THE LAW:BURDEN OR BENEFIT?

Survey report June 2005

Employment and the law 1

Contents

Foreword 2

Summary of key findings 3

Attitudes to employment law 5

The impact of employment law on employment practice 9

How regulation is translated into practice 11

Training 15

How HR promotes the importance of compliance 16

The impact of employment regulation on strategy and business planning 17

Employment tribunals and the risk of litigation 18

Keeping up to date 19

The right to request flexible working 21

The Working Time Regulations 25

Conclusions 28

Survey methodology 29

2 Employment and the law

Foreword

Employers in the UK have had to implement a range

of new employment legislation from both the UK

Government and Europe over the last few years. Some

estimates put the cost to UK businesses of meeting

regulation introduced between 1997 and 2004 as high

as £30 billion.

The new legislation has included the right to request

flexible working for parents with young children,

extended maternity and paternity provision, new

anti-discrimination laws and the Working Time

Regulations. Legislators explain these interventions as

being important to ensure increased fairness at work,

to boost productivity and as a necessary response to

demographic and social change, such as an ageing

population, changing family structures and shifting

migration patterns.

However, there is a lack of agreement as to whether

employment legislation promotes efficient employment

practice or creates an unnecessary regulatory burden

on UK businesses. An important aspect of this debate is

about how well drafted employment legislation is and

whether it is presented and promoted in a clear and

accessible format. Just as important is how changes to

employment law translate into changes in employment

practice and behaviour in the workplace.

In what is thought to be the most comprehensive

survey of its kind, the CIPD and Lovells’ specialist

employment practice teamed up to canvass the views

of those on the front line – the HR professionals who

are responsible for identifying new legislation, then

ensuring it is implemented within their organisations.

This Survey Report looks generally at attitudes to

employment law and regulation, then goes on to

consider the impact of two specific pieces of law: the

right to request flexible working (introduced under

the Employment Act 2002) and the Working Time

Regulations 1998.

The aim of the survey was to help us understand what

employers really think about employment law – to get

behind the headlines and identify the issues and themes

that matter in the real world to real organisations.

Ben Willmott

Employee Relations Adviser

CIPD

David Harper

Partner and Head of the Employment Group

Lovells


Summary of key findings

General employment law findings

• The CIPD and Lovells have surveyed HR

professionals in more than 600 UK employers

regarding their attitudes to and experience of

employment legislation.

• The majority of employers see employment law

as making a positive contribution to employee

relationships and as increasing employees’ sense of

fairness and trust in their employer. Less than one-

sixth of employers see employment law as getting

in the way, or detracting from the real issues facing

their business.

• A significant proportion of employers believe

employment regulation can have a positive impact

in supporting their strategic HR and/or business

goals. More than half of all respondents believe that

the laws on disability, sex discrimination, equal pay,

race relations, flexible working and parental rights at

work make a positive contribution to the business.

• HR policies, demonstration of senior management

buy-in and training for line managers are the main

means of genuinely effecting change.

• The main barriers to the effective implementation

of employment law are, first, the perception that

there is too much legislation and, second, a lack

of resources within organisations to devote to

translating law into practice.

• Over half of respondents believe employment

legislation is too complex. Just under half rate the

available guidance as ‘poor’. These attitudes are

relatively consistent across the public and private

sectors, and across organisations of all sizes.

• In encouraging compliance with employment law

at all levels, the threat of sanctions is not widely

perceived to be effective.

• The threat of employment tribunal claims doesn’t

drive employers to comply with employment law,

nor do employers see threats of disciplinary action

as being an effective way of ensuring compliance

by their employees.

• The survey shows that it is difficult to generalise

about ‘employment law’ as a whole; each piece of

legislation receives a very different response.

• Anti-discrimination and family-friendly legislation

are perceived to be the most necessary types of

legislation, with more than 50% of employers

welcoming these Regulations. Far fewer employers

feel the same way about statutory trade union

recognition, freedom of information, statutory

dispute resolution or informing and consulting with

employees.

• The two specific pieces of legislation explored by

the survey – on flexible working and working time

– produced very different sets of results. Flexible

working is generally viewed positively by employers,

while the response to working time is more

guarded.

The right to request flexible working

• The majority of employers see the right to request

flexible working as a driver of good employment

practice, with only 15% suggesting that the

legislation is unnecessary red tape.

• A large majority of employers find compliance

with the legislation relatively straightforward. Of

those who have had problems, the main barrier

to compliance is that managers find it difficult to

manage employees on different flexible working

arrangements. There is also concern about

precedents being set in relation to future requests.

• The majority of employers indicated that they

had seen some direct business benefits from the

legislation. Among those benefits are improvements

in staff retention, improved morale and a reduction

in costs (for example, through hot-desking).

• Less than one-tenth of employers have faced

grievance or disciplinary proceedings, or an

employment tribunal claim, as a result of the new

legislation.


Working Time Regulations

• Although just under one-third of employers indicate

that they have introduced policies in the last few

years aimed at reducing working hours, four-fifths

of employers report that working hours have in

fact stayed the same in their organisation since the

introduction of the Working Time Regulations, with

one-tenth reporting an increase.

• Only 22% of employers report that the Regulations

have had a positive effect on their organisation,

with the remainder reporting the effect as negative

or negligible.

• Just 17% of respondents say they feel under

pressure to reduce working hours, when reported.


Attitudes to employment law

The survey reveals that the issue of employment

regulation and red tape is much more complex than

is often reported. HR professionals regard much

employment law as necessary and, in many cases, as

helping to achieve business goals.

In terms of specific legislation (see Table 1), a

clear majority of organisations surveyed see anti-

discrimination laws as necessary. More than 70%

of respondents cite the Disability Discrimination Act

1995, the Sex Discrimination Act 1975, the Equal Pay

Act 1970, the Race Relations Act 1976 and the laws

relating to maternity and paternity leave and pay as

necessary.

Over half of respondents identify legislation protecting

part-time workers, the Transfer of Undertakings

(Protection of Employment) (TUPE) Regulations, the

Data Protection Act, the forthcoming legislation on

age discrimination and the Working Time Regulations

as necessary.

Scoring somewhat lower are the new laws on

statutory dispute resolution, informing and consulting

with employees, freedom of information, and statutory

trade union recognition, each of which are seen as

necessary by less than 50% of respondents.

Table 1: Employers (%) regarding the specified Regulations as ...

NecessaryWell drafted and easy to

apply

Disability Discrimination Act 85 23

Sex Discrimination Act 81 29

Equal Pay Act 76 22

Race Relations (Amendment) Act 74 22

Parental rights at work (maternity and paternity leave and pay) 70 41

Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 69 29

Transfer of Undertakings (Protection of Employment) Regulations 69 8

Data Protection Act 64 11

Age discrimination legislation (2006) 60 na

Working Time Regulations 57 20

Employment Equality (Sexual Orientation) Regulations 57 23

Employment Equality (Religion or Belief) Regulations 57 22

Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 53 23

Right to request flexible working 52 51

Statutory dispute resolution rules 46 26

Information and Consultation of Employees Regulations 38 19

Freedom of Information Act 34 7

Statutory union recognition 26 11


A significant proportion of employers believe

employment regulation can have a positive impact in

supporting their strategic HR and/or business goals

(see Table 2).

More than half of all respondents believe that the

laws on disability, sex discrimination, equal pay, race

relations, flexible working and parental rights at

work make a positive contribution to the business.

Public sector employers are significantly more

likely to identify regulation as contributing to their

organisation’s business goals than the three other

main sectors.

The TUPE Regulations, the statutory dispute resolution

rules, the Freedom of Information Act and the

statutory union recognition rules are least likely to be

seen as contributing positively to an organisation’s

business goals.

The survey shows that employers’ many ‘red tape’

concerns associated with employment regulation

are caused by the clumsy drafting of legislation and

inadequate guidance.

Table 2: Employers (%) regarding the specified Regulations as supporting the organisation’s strategic HR and/or business goals

AllManufacturing and production

Private services

Non-profit organisations

Public services

Disability Discrimination Act 57 48 55 60 71

Sex Discrimination Act 55 49 52 55 68

Equal Pay Act 54 46 55 55 67

Right to request flexible working 54 42 56 62 65

Parental rights at work (maternity and paternity leave and pay)

54 44 59 53 62

Race Relations (Amendment) Act 50 41 48 47 60

Information and Consultation of Employees Regulations

47 52 48 43 40

Part-Time Workers (Prevention of Less Favourable Treatment) Regulations

45 36 45 45 59

Age discrimination legislation (2006)

45 41 44 49 51

Working Time Regulations 40 39 37 42 47

Employment Equality (Religion or Belief) Regulations

38 26 40 45 49

Employment Equality (Sexual Orientation) Regulations

37 26 40 45 47

Data Protection Act 36 33 35 34 39

Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations

32 24 30 32 34

Transfer of Undertakings (Protec-tion of Employment) Regulations

28 23 27 28 37

Statutory dispute resolution rules 31 35 31 26 30

Freedom of Information Act 16 12 13 15 26

Statutory union recognition 13 10 6 13 26


For 12 of the 16 pieces of legislation on which we

sought views, less than a quarter of respondents

believe they are well drafted and easy to apply (see

Table 1).

Only the laws on the right to request flexible working

and parental rights at work Regulations are seen

as being relatively user-friendly (51% and 41%

respectively).

A significant minority of respondents (29%) indicate

their feeling that none of the employment legislation

is well drafted and easy to apply. Interestingly, these

responses are relatively consistent across both the public

and private sectors and across organisations of all sizes

– with small employers (less than 250 employees) and

large employers (more than 10,000 employees) giving

broadly similar answers in relation to most legislation.

The survey asked respondents how employment

regulation was regarded within their organisation. Two-

thirds of respondents identify employment law’s role

as a driver of good employment practice as one that

carries very significant weight within their organisation.

Employment law is seen as an essential standard

by 50% of survey respondents, with less than 15%

believing that law gets in the way or detracts attention

from the real issues (see Table 3).

Managing regulation is seen as a time-consuming

activity. More than 40% of organisations see

employment law as requiring a lot of administration.

Those in the public sector generally have more positive

attitudes to employment legislation than those in the

other three main sectors, with employers in this sector

most likely to regard regulation as a driver of good

practice (75%) and least likely to see it as requiring a lot

of administration (29%) and getting in the way (6%).

Manufacturing and production organisations are most

likely to regard employment regulation as getting in the

way (19%), followed by non-profit organisations (17%)

and private sector services (15%).

Table 3: Statements ranked to show how employers regard employment law

Respondents (%) ranking statement

at number one

Respondents (%) ranking statement

in top three

Employment law drives good employment practice 30 67

Employment law is an essential standard 26 50

Employment legislation requires a lot of administration 9 43

The existence of law helps to start change by getting buy-in at the highest level

8 40

Law provides a helpful reference 10 37

Regulation gets in the way 4 14

Law detracts from the real issues 3 14

Employment law is gold-plated (we do more than we need to do) 4 14


Implementing employment law is seen by three-fifths

of respondents as making a positive contribution

to employee relationships and by around the same

proportion (59%) as increasing employees’ sense

of fairness and trust in their employer (see Table 4).

An important subsidiary benefit cited by 41% of

respondents is that complying with the law helps

reduce the number of employment tribunal claims, with

just 14% believing the opposite. Respondents were split

over whether employment regulation contributes to an

increase (23%) or a decrease (24%) in the number of

formal disciplinary and grievance cases. This is likely to

be because of uncertainty over whether the law acts as

a deterrent to unacceptable behaviour in the workplace

or whether the ‘standard’ set by law means that a

breach of policies and procedures is more likely.

Table 4: Does implementing the law ...

Total (%) of respondents who

agree

... make a positive contribution to employee relationships? 60

... increase employees’ sense of fairness and trust in the employer? 59

... help reduce the number of employment tribunal claims? 41

... contribute to a reduction in the number of formal disciplinary and grievance cases? 24

... contribute to an increase in the number of formal disciplinary and grievance cases? 23

... increase the number of employment tribunal claims? 14


Impact of employment law on business

Employment law is seen by respondents as the

key driver of change in employment practice and

behaviour in their organisation, with 36% rating it

their number-one factor and more than three-quarters

rating it in the top five (see Table 5). Pressure to

improve business performance is seen as the next most

significant driver of change in employment practice,

perhaps reflecting the recognition among employers

that the creation of a positive psychological contract

is a critical factor in an engaged and committed

workforce.

The potential impact of a change of management

such as a new chief executive or HR director is

regarded as a strong driver of change, with 9% of

employers rating this as their number-one factor and

34% including it in their top five.

How organisations are perceived externally among

investors, employees and customers is also seen as

an important factor behind changes in employment

practice. Customer expectations, skills shortages/the

need to become employer of choice, and corporate

image/reputation are all ranked highly.

The threat of liability for failure to comply with a law

is not seen by many as an important driver of change.

Four-fifths of respondents fail to rate it in the top

Table 5: Question: What are the main drivers of change in employment practice/behaviour in your organisation?

Employers (%) ranking this as the most important

driver of change

Employers (%) ranking this as a top-five driver of

change

The introduction of new employment law 36 76

The need to improve business performance 25 72

Changes to the top management team 9 34

Customer expectations 4 33

Skills shortages/the need to become an employer of choice

3 42

Corporate image/reputation 2 36

Staff turnover levels 2 29

Threat of legal costs for non-compliance 2 20

Marketplace competition 2 14

The Corporate Social Responsibility agenda 1 13

Employee attitude surveys 1 23

National standards awards 1 17

Changes to labour market demographics (eg ageing workforce)

1 15

Trade unions * 15

Staff councils/forums * 9

* less than 1%


five factors influencing change in their business. This

suggests that the ‘carrot’ may be more effective than

the ‘stick’ in changing business behaviour.

Also seen as relatively unimportant by respondents

in driving change in employment practice are

trade unions (not rated in their top five by 85% of

respondents) and staff councils/forums (not rated by

91% of respondents).

Sectoral breakdown

Private services employers are considerably more likely

to rate customer expectations (56%) and marketplace

competition (20%) among their top five drivers of

change than respondents from the other main sectors.

Respondents in this sector are also more likely to see

the risk of fines/compensation payouts as a change

factor, with 24% ranking this in the top five compared

to 18% of manufacturing and production employers,

14% of non-profit organisations and 15% of public

sector respondents.

Respondents from non-profit organisations are most

likely to regard change to the top management team

as a top-five change factor – 52%, compared to the

average score of 34%.

Public sector employers, perhaps not surprisingly, given

typically higher levels of union recognition, are most

likely to regard the trade unions as a major driver

of change in employment practice/behaviour, with

30% ranking this as a top-five factor. Respondents

from this sector are also most likely to rate corporate

image/reputation as a top-five change driver – 44%,

compared to a survey average of 36%.


How employment law is translated into business practice

The survey asked two questions:

• What are the best methods of translating changes

in employment legislation into changes in

employment practice/behaviour at work?

• How does your organisation translate changes

in employment legislation into changes in

employment practice/behaviour at work?

Respondents were asked to rank their top five most

effective methods for both questions.

The results show that making changes to people

management policies is regarded as the best way of

translating changes in employment law into changes

in employment practice (see Table 6). It is also the

factor most likely to be ranked highest by respondents

(see Table 7) when considering how change is

implemented within their organisations.

However, below this there are some interesting

differences between what respondents consider the

best ways of translating changes in employment

regulation into changes in employment practice and

how change actually happens within respondents’

organisations.

Demonstration of senior management buy-in is

regarded as the second most effective way of

implementing changes in employment law, with 17%

Table 6: Question: What are best methods of translating changes in employment legislation into changes in employment practice/behaviour at work?

Employers (%) ranking this as the

most important method

Employers (%) ranking this as a top-five method

Make changes to people management policies 24 64

Demonstration of senior management buy-in 17 57

Training for managers 11 68

Identify business benefits of meeting new Regulations and raise awareness at board level

11 37

Effective internal communication 10 61

Consultation with managers before implementing change

7 48

Identify risks of not complying and raise awareness at board level

5 34

Strong leadership 5 31

Training for staff 3 37

Work with trade unions 2 22

Work with staff councils/forums 1 18

Champions role/models 1 8

Threat of disciplinary action * 3

* less than 1%


of respondents ranking it as the key change factor and

57% ranking it in their top five. But when considering

how employment regulation is actually implemented

within respondents’ organisations, it is ranked seventh,

with only 6% citing it as their number-one ranked

method and 34% including it among their top five.

Training for managers is ranked as the third most

effective way of translating changes in employment

law into changes in behaviour in the workplace,

but it is only seen as the fifth-ranked method

of implementing change within respondents’

organisations.

In practice, respondents are more likely to highlight

the risks of not complying with regulation and

then to raise awareness at board level as a way

of implementing change in their organisation

than they are to rate it an effective method of

implementing change. This is the third most likely

method of implementing change within respondents’

organisations, with 10% citing it as their number-one

intervention and 43% ranking it in their top five. But it

is regarded as only the seventh most effective change

method – 5% rank it at number one and 34% place it

in their top five.

Effective internal communication is seen as critical both

in theory and in practice. In both cases, the results show

10% of respondents regarding this as their number-

one method of implementing changes in employment

regulation and 61% ranking it in their top five.

Training for staff, working with trade unions and staff

councils/forums, and using champions/role-models are

among the factors that are less likely to be used within

respondents’ organisations to implement changes in

employment Regulations or to be ranked as effective.

The threat of sanctions is not widely perceived to

be a successful way of implementing changes in

employment law, with more than 90% of respondents

failing to rank ‘threat of disciplinary action’ in their

top five effective methods of implementing change or

Table 7: Question: How does your organisation translate changes in employment legislation into changes in employment practice/behaviour at work?


most important method

Employers (%) ranking this as a top-five method

Make changes to people management policies 38 78

Effective internal communication 10 61

Identify risks of not complying and raise awareness at board level

10 43

Identify business benefits of meeting new Regulations and raise awareness at board level

10 37

Training for managers 9 66

Consultation with managers before implementing change

6 38

Demonstration of senior management buy-in 6 34

Strong leadership 3 21

Work with trade unions 2 25

Training for staff 1 34

Work with staff councils/forums 1 18

Champions role/models * 8

Threat of disciplinary action * 7

* less than 1%


identifying this as an actual method of implementing

change used in their organisations.

When implementing employment law, perhaps

unsurprisingly, the vast majority of employers say that

they meet the standards imposed by the law, with

some 41% indicating that their organisation goes

beyond what is required (see Table 8). The public sector

is most likely to go beyond what is required by law,

with nearly two-thirds (65%) of respondents claiming

to do so. Respondents in the manufacturing and

production sector are least likely to go beyond the basic

requirements of law; just over a quarter (27%) indicate

that they do.

Obstacles to implementation

Four important barriers to the effective implementation

of employment law are cited by over half of the

employers surveyed (see Table 9):

• too much legislation – ranked as a barrier by 63% of

respondents

• lack of resources (staff/budget/time) – ranked as a

barrier by 61% of respondents

• entrenched attitudes among managers – ranked as a

barrier by 58% of respondents

• lack of senior management buy-in – ranked as a

barrier by 50% of respondents.

Table 8: Question: How well does your organisation generally implement changes in employment law?


Private services


Public services

Meets the minimum standard 57 71 61 45 35

Goes beyond what is required 41 27 38 49 65

Fails to meet minimum standard 1 1 2 2 1

Not stated 2 2 2 8 2

Table 9: Question: What are the main obstacles to implementing changes in employment law effectively?


most important obstacle to change

Employers (%) ranking this as a top-five obstacle

to change

Lack of resources (staff/budget/time) 19 61

Lack of senior management buy-in 18 50

Too much legislation 16 63

Entrenched attitudes among managers 13 58

Lack of awareness of changes to legislation 10 38

Inadequate guidance from the Government 8 43

Entrenched attitudes among the workforce 4 33

Entrenched attitudes in society as a whole 3 19

Inadequate consultation over proposed employment law 3 31

Apathy 2 32

It is cheaper to be reactive and settle out of court/pay compensation

* 7

* less than 1%


Some interesting sectoral differences arise in response

to the question answered in table 9:

• An entrenched attitude among managers is almost

twice as likely to be a problem for organisations with

less than 250 employees than for organisations with

over 5,000 employees.

• Respondents in the manufacturing and production

sector are most likely to cite entrenched attitudes

among the workforce as an obstacle to effectively

implementing changes – 43% rank this as a top-five

obstacle, compared to the survey average of 33%.

• Lack of resources is a bigger problem in the public

and non-profit sectors than in the private sector. This

is in spite of the fact that the results show that the

public and voluntary sectors are more likely to have

a training budget to ensure employees are aware of

their obligations under employment law than those

in the private sector (see Table 11).

• There is little difference between small (under

250 employees) and large (over 5,000 employees)

employers in relation to their attitudes to: lack

of resources; the feeling that there is too much

legislation; inadequate consultation on the legislation;

and inadequate guidance from Government.

Nearly two-thirds of respondents agree that

employment legislation is too complex and 45% believe

that the available guidance to help employers meet

their obligations is poor (see Table 10). These problems

are compounded by the lack of time available to devote

to employment law issues – 56% of those surveyed

identify this as an issue.

Line managers’ inability to implement changes to

employment regulation in the workplace is regarded as

an issue by a third of employers. Almost a quarter of

respondents agree that a lack of interest in employment

regulation at board level undermines the effective

implementation of new legislation.

Table 10: Employers (%) agreeing with the following statements

Statement AllManufacturing and production

Private services


Public services

Legislation is too complex 59 66 58 55 53

There is not enough time to devote to employment law issues

56 61 49 55 65

Available guidance is poor 45 41 48 58 44

Our line managers don’t implement changes in employment law effectively

33 30 31 47 33

A lack of interest in employment regulation at board level undermines effective implementation of new legislation

23 25 24 36 17


Training

Nearly half of all organisations don’t have a training

budget to ensure their workforce is aware of their

obligations under employment law (see Table 11).

Manufacturing and production organisations are least

likely and the non-profit sector is most likely to have a

training budget for this purpose.

In cases where training is provided, the HR department

is most likely to receive it, with 84% of respondents

reporting that members of this function are trained

to ensure changes to employment legislation are

understood and implemented across the organisation.

Line managers are the next most likely to receive

training (72%), followed by senior management (54%)

and all employees (26%).

Table 11: Question: Does your organisation have a training budget to ensure employees are aware of obligations under employment law?

Respondents (%)

AllManufacturing and production Private services

Non-profit organisations Public services

Yes 51 46 47 60 59

No 47 52 51 34 38

Not stated 2 2 1 6 3


Promoting the importance of compliance

HR professionals are more likely to promote the

importance of compliance within their organisations in

a positive manner before highlighting the dangers of

breaching employment law.

Four-fifths of respondents promote compliance with

employment law as a way to encourage line managers

to adopt good practice. Complying with employment

regulation is seen by nearly half (48%) of respondents

as being an important step towards becoming an

employer of choice (see Table 12).

Just over a third of respondents encourage compliance

by emphasising that it will ensure that employees/the

organisation keeps out of trouble, and just under half

of respondents highlight the fact that it is a necessary

obligation.

More than 80% of HR professionals find employment

regulation helpful when attempting to influence

managers in the organisation to adopt positive

employment practices.

Table 12: Question: Does HR promote compliance with employment law within your organisation as …

Employers (%) considering the requirements of meeting forthcoming employment regulation in their business planning



… a way to encourage line managers to adopt good practice?

80 79 77 75 86

… an important step to becoming an employer of choice?

48 42 49 51 54

… a necessary obligation? 47 52 48 38 45

… a way of keeping out of trouble?

36 35 36 47 34


The impact of employment regulation on strategy and business planningComplying with employment law is regarded as a

strategic issue by half of all respondents, with a third

reporting that compliance is ‘sometimes’ a strategic

issue and 16% that compliance with employment

regulation is never categorised as a strategic matter for

their organisation.

Public sector employers (66%) are most likely and

manufacturing and production employers least likely

(45%) to regard employment regulation compliance as

a strategic issue.

More than a quarter of employers always consider the

requirements of meeting forthcoming employment

regulation in their organisation’s business planning, and

55% of respondents ‘sometimes’ do so (see Table 13).

Table 13: Question: Is meeting the requirements of forthcoming employment law included in your organisation’s business planning?

Employers (%) considering the requirements of meeting forthcoming employment regulation in their business planning



Always 26 17 27 34 35

Sometimes 55 61 55 43 56

Rarely 14 15 15 15 8

Never 4 7 3 8 1


Employment tribunals and the risk of litigation

A large majority of respondents indicate that that the

risk of employment tribunal claims has an influence on

management behaviour, with 51% stating that it has

a strong influence and 37% a marginal influence (see

Table 14). Manufacturing and production employers

and non-profit organisations are less likely than

employers in the other two main sectors to see the

risk of tribunal claims as having a strong impact on

management behaviour.

Organisations surveyed were asked a number of

questions about the amount of employment litigation

faced by their organisations and their attitudes

towards it.

Just over a quarter (26%) of employers have never

faced an employment tribunal claim and 40% have

had no claims in the past 12 months. These statistics

rise to 50% and 65% respectively when looking at

employers with less than 250 employees. Nearly 70%

of organisations have received one or no claims in the

last year, with only 10% receiving six or more.

Most organisations consider each tribunal claim on its

merits in deciding whether to contest it or not, with

a significant minority (12%) contesting every claim

as a matter of principle. Organisations in the non-

profit sector are most likely to settle every case, with

manufacturing and production employers most likely

to fight.

The level of tribunal claims has remained relatively

static in the last 12 months, with 16% of respondents

reporting an increase, 19% a decrease and 51%

reporting no change. The average number of

employment tribunal claims in the last year per

respondent organisation was 2.5.

Table 14: Question: How much impact does the risk of employment tribunal claims have on influencing management behaviour?

Employers (%)

Strong influence 51

Marginal influence 37

Little influence 12


Keeping up to date

Nearly all (93%) of respondents indicate that they

have someone (either internal or external) who is

responsible for ensuring that their organisation is aware

of forthcoming legislation. Again, in nearly all cases

(92%) the HR department takes responsibility. In all, 6%

of respondents’ organisations have a senior manager

who takes responsibility for ensuring the organisation is

prepared for forthcoming legislation, 10% draw on the

services of an in-house lawyer, and 16% of respondents

use an external law firm.

The secondary sources of advice and assistance

disclosed by the survey responses are perhaps more

surprising (see Table 15). Very few organisations (less

than 5%) indicate that they use the Equal Opportunities

Commission, the Disability Rights Commission, the

Commission for Racial Equality or the Employers’

Forum on Age as sources of advice. More commonly

used are the CIPD, regarded as the top secondary

source, followed by in-house expertise within the HR

department, the Advisory, Conciliation and Arbitration

Service (ACAS), external employment law firms, and the

HR trade press.

Paul Atkinson, Employee Relations Manager at Wood Group Engineering (North Sea) Ltd, a company

that provides engineering and operations support expertise to the oil and gas industry, attributes the low

usage of equality commission websites to poor advertising and promotion. He also thinks the websites

themselves are not particularly user-friendly for business users.

Atkinson has a strong involvement in employers’ groups, such as the Offshore Contractors’ Association

(OCA), where he chairs committees that produce bulletins to help members keep up to date with

developments in legislation and case law. He also takes part in consultation exercises, and therefore makes

use of government departments’ websites and publications.

The equailty commission websites would be much improved, Atkinson suggests, if they were all

amalgamated into one comprehensive site, with a stronger emphasis on the needs of employers. While

his active role in employers’ groups makes it relatively easy for him to understand new developments in

employment law, he finds the guidance issued with new legislation of little use, and believes it would be

more helpful if it were written by authors with greater experience of the problems faced by employers

when implementing new requirements.

Overall, Atkinson believes there is too strong a focus on social needs over business needs and feels that

the genuine need for legislation that existed in the early 1990s has now been resolved. He worries that

increasing the burden on employers will make them more and more cautious about employing.

Case study: Keeping up to date


At Interbrew UK, a subsidiary of InBev, the world’s largest brewer by volume, Employee Relations Manager

Bob Stannard feels that the intricacies of employment law often make it difficult to take a totally confident

position on an issue. He also finds that on occasions expert advice taken can be too qualified to be of real

use in clarifying the confusion surrounding difficult pieces of law, where case law is continually changing

the legal landscape.

In order to stay up to date with changes in employment law, Bob relies on personal research using

specialist publications like the CIPD’s People Management, as well as general news sources and more

detailed investigation when and where required, including government websites such as those of the DTI,

the DWP and ACAS. For advice on specific problems, he will call Croner’s Employment Law telephone

helpline and/or refer to Interbrew UK’s legal advisers for advice on more complex issues.

Case study: Keeping up to date

Table 15: Question: What organisations/resources do you use to seek advice on new legislation and on how to meet any new obligations? (respondents were asked to rank their top five choices)

Employers (%) ranking this as the most important

information source

Employers (%) ranking this as a top-five

information source

CIPD 12 57

In-house expertise within the HR department 21 50

Employment law firm 16 48

ACAS 8 46

HR trade press 6 44

Government departments’ websites/publications 8 44

Legal helplines/directories 5 26

Employer organisations 4 19

In-house employment lawyer 4 13

Courses/conferences 2 20

Colleagues/peers 1 24

Employer networking groups 1 19

HR consultants * 5

Business Link * 5

Equal Opportunities Commission * 4

Disability Rights Commission * 2

Commission for Racal Equality * 1

Employers’ Forum on Age * 1

* less than 1%


The right to request flexible working

This section considers how employers responded to

one recent piece of legislation: the right to request

flexible working. This law came into force in April

2003 as part of the Employment Act 2002 and gave

parents with young children the right to request

flexible working. Respondents were asked to consider

how the Regulations came to their attention, how they

responded to them, and the impact the Regulations

have had on the organisation and the workplace.

Awareness of the new right before its implementation

was high, with 98% of respondents aware of the

proposed law prior to April 2003. However, in follow-

up interviews, some respondents indicated that,

although the existence of the law was well publicised,

there was confusion about what it would mean in

practice. In particular, some believed that the law gave

employees the right to work flexibly, rather than simply

the ability to make a request. The most common

sources of information about the new law were the

HR trade press (cited by 69% of respondents), the

CIPD (67%), government departments’ websites/

publications (47%) and employment law firms (43%).

The majority of organisations (52%) had developed

new policies before the legislation came into force to

ensure compliance, and a significant minority (21%)

indicated that they already had policies in place which

met the requirements of the new legislation.

Attitudes to the new right

The survey asked about attitudes towards the right

to request flexible working (see Table 16). The right is

seen as a driver of good practice by over half (55%) of

respondents, but attitudes vary significantly between

the sectors. Almost three-quarters (74%) of public

sector respondents see the right in this way, whereas

only two-fifths (41%) of manufacturing organisations

agree.

Only 14% of respondents feel that the legislation is

unnecessary red tape, but, again, there is sectoral

variation, with only 5% of public sector respondents

seeing it in this way, compared with 23% of

manufacturing respondents. Most employers (71%),

however, say that they have found it easy to comply

with the Regulations, with only 26% indicating they

Table 16: Question: Do you regard the ‘right to request flexible working’ legislation as ...

Respondents (%)


Private services


Public services

… a driver of good practice? 55 41 56 51 74

… well drafted and easy to apply? 18 22 16 23 16

… unnecessary red tape? 14 23 12 15 5

… complicated and difficult to apply in practice?

14 16 15 11 8


An HR professional working for a chain of retail stores comments that, while recent changes to

employment law are based on sound principles and address a definite need, some of the changes have

been impractical to apply, especially in the retail sector. In particular, it has been hard to balance the need

to provide staffing during set hours when stores are open, against a right to request flexible working

hours.

Case study: Attitudes to flexible working

had had some difficulty. These results are relatively

consistent across all sectors and organisations of

all sizes. The main reason cited by those employers

experiencing difficulty in complying with the

Regulations is that managers find it hard to manage

employees on different flexible working arrangements.

Setting precedents for the future and resentment from

co-workers are also concerns (see Table 17).

Table 17: Question: If it has proved hard to meet the Regulations’ requirements, why was this?

Respondents (%)

Statement AllManufacturing and production

Private services


Public services

Managers find it hard to manage employees on different flexible working arrangements

63 65 65 70 58

There is resentment from workers who don’t have young children that they are not entitled to request flexible working arrangements

57 56 53 80 58

If you say yes to one request you have to say yes to many more

50 40 62 40 42

Shift system means it’s hard to build on flexibility over individuals’ hours

44 63 34 50 33

Managers don’t trust staff to work flexibly/ independently

26 17 28 30 39

Other reasons 8 10 6 10 6


Impact of the new right

Respondents were also asked about the business

benefits brought about by the new right (see Table

18). Divisions by sector are apparent in response

to this question. Overall, 38% of respondents feel

that there has been no business benefit from the

legislation, with the figure reducing to 29% among

public sector employers and increasing to 48% among

manufacturing organisations. However, the majority

of respondents indicate that at least some benefit has

resulted from the legislation. Among benefits felt by

respondents were: improvements in staff retention;

improved morale; and a reduction in costs (eg through

hot-desking).

In practice, most employers have received less than ten

requests under the new legislation (see Table 19).

The Regulations have led to disciplinary or grievance

cases for only 9% of employers and only 2%

of employers have faced employment tribunal

proceedings arising from the flexible working

legislation. Employers in the services sector are

proportionately more likely to have faced disciplinary/

grievance proceedings or an employment tribunal than

employers in other sectors, although non-profit and

public sector workers are the most likely to make a

request.

Table 18: Question: Have there been subsequent business benefits to the introduction of the right to request flexible working?

Respondents (%)


Private services


Public services

No benefits 38 48 35 38 29

Improvement in staff retention 27 23 31 26 26

Improved morale 20 19 21 23 23

Reduction in costs eg through hot-desking 15 17 15 21 10

Reduced employee absence 11 6 9 17 18

Recruitment incentive 10 3 8 9 27

Other 7 5 7 2 9

Table 19: Question: How many requests have you received under the ‘right to request’ legislation?

Number of requests Respondents (%)

No requests 18

1–10 requests 57

11–50 requests 10

50–100 requests 1

More than 100 requests 1


Tracey Huckfield, HR manager at the national charity Help the Aged, became aware of the ‘right to

request’ legislation well in advance of its implementation. She was alerted through update emails received

from external law firms and the CIPD.

Historically, Help the Aged had taken an ad hoc approach to flexible working requests. However, the

introduction of the new legislation created a need for a more formal policy to be put in place.

The policy was drafted in-house, using as a key resource the information and sample forms provided on

the DTI website. It very much mirrors the statutory requirements of the ‘right to request’ legislation and

is restricted to parents with young children. The policy is accessible to all employees on the organisation’s

intranet site.

Since the legislation came into force, the organisation has received around a dozen requests, the vast

majority of which have been accommodated. When it’s not possible to accommodate an employee’s

exact request, the organisation works with the individual to try to reach a compromise solution which is

acceptable to both employee and employer. Most requests have been from women, although there have

been two requests received from male employees, and most have been for a reduction in working hours.

Huckfield says that, for parents working in the organisation, the legislation has had a very positive effect.

While there has been little impact on recruitment, it has helped significantly with staff retention. She

notes, however, that there has been some resistance from the non-parents in the organisation, some of

whom have commented that it’s unfair that the right to make a flexible working request under the formal

policy is not open to them.

Case study: Help the Aged


Working Time Regulations

It is timely, with the European focus on the future of

the 48-hour working week, to consider how employers

in the UK have responded to the Working Time

Regulations since they were introduced in 1998. This

section explores the impact the Regulations have had on

employers and on hours worked within organisations.

Impact of the Regulations

Just under one-third (29%) of employers say that they

have introduced policies in the last few years aimed

at reducing working hours for a significant number

of employees (see Table 20). This figure rises to 64%

of employers with more than 10,000 employees and

41% of those with more than 5,000. Despite this, 80%

of employers report that working hours within their

organisation have stayed roughly the same since the

introduction of the Working Time Regulations in 1998,

and 10% of organisations report an increase in working

hours (see Table 21).

Of the employers that have tried to reduce working

hours, less than half (45%) have done so as a result of

the introduction of the Working Time Regulations. The

remainder have been driven by other concerns.

The survey asked respondents to rate the impact of the

Working Time Regulations on their organisations (see

Table 22). A negative impact was more widely reported

among non-profit organisations and those employing

Table 20: Question: In the last few years, has your organisation adopted policies or practices designed to reduce the working hours for a significant number of employees?

Respondents (%)Number of employess

AllLess than

250 251–500501–1,000

1,001–5,000

5,001–10,000

More than 10,000

Yes 29 21 28 30 37 41 64

No 70 77 72 69 63 59 32

Not stated 1 1 0 1 0 0 5

Table 21: Question: Since the Working Time Regulations were introduced in 1998, have working hours in your organisation...

Respondents (%)

... increased? 10

... decreased? 9

... stayed about the same? 80

Table 22: Question: How would you describe the influence of the Working Time Regulations on your organisation?

Respondents (%)



Positive 22 18 21 11 31

Negative 57 58 59 66 51

Negligible 20 23 19 23 17


less than 250 people, whereas the most likely to report

a positive effect were those in the public sector.

Use of collective and workforce agreements

The survey shows that collective and workforce

agreements are not widely used by UK employers.

Only 11% of employers have a collective agreement

with a trade union and 9% a workforce agreement.

The primary purpose of the collective and workforce

agreements that do exist is to extend the averaging

period for the 48-hour working week.

Monitoring working hours

Over four-fifths (84%) of employers record the working

hours of at least some of their staff, with employers

in the manufacturing sector the most likely to record

the working hours of their employees. Of those who

do record working hours, self-completion of records is

most popular, except in the manufacturing sector where

clocking on/off by machine is (perhaps unsurprisingly)

the method of choice (see Table 23).

Use of the opt-out

Across all sectors, an average of 50% of employees

from respondents’ organisations are not affected by the

48-hour working week because they have opted out.

In all, 60% of respondents provided information on the

proportion of their employees who are not affected by

the 48-hour working week because they have opted

out, with 31% indicating they did not know and 9%

not responding to the question (see Table 24).

Sectoral differences

Employees in the manufacturing and production

sector are most likely to have signed the opt-out, with

an average of 65% having done so. Almost 30% of

respondents in this sector indicate that between 91%

and 100% of their employees have signed the opt-

out. Just 9% of employers in this sector report that no

employees have signed the opt-out. Among private

services organisations, on average just over 50% of

employees have signed the opt-out. A quarter of

respondents in this sector reveal that between 91%

and 100% have signed the opt-out, with 17% of

organisations indicating no employees have signed the

clause. Among non-profit organisations, an average

of 20% of employees are likely to have signed the

opt-out, with just 4% of respondents indicating that

Table 23: Question: If you record the working hours of employees, how do you do it?

Respondents (%)


Private services


Public services

Self-completion of record 48 30 47 67 72

Clocking on/off by machine 42 72 30 14 26

Fixed hours of work 23 16 28 26 23

Some other means 16 7 19 24 20

Table 24: Question: What proportion of your employees (as a percentage) are not affected by the Working Time Regulations because they …

Average percentage of employees in respondents’ organisations


Private services


Public services

… have opted out? 50 65 52 20 18

… are ‘autonomous’ workers? 10 9 11 12 10

… are excluded from the scope of the Directive?

12 10 11 19 15


between 91% and 100% of employees have done

so and 23% reporting that no workers have signed

the clause. The opt-out has been signed by 18% of

public services employees, according to respondents,

with 18% indicating that no employees have signed

the clause and 3% reporting that between 91% and

100% of workers have.

The future

Respondents were asked whether they feel under

pressure to reduce working hours for their employees.

Only 17% indicate that they do, with the public sector

and employers with over 1,000 employees most likely

to feel such pressure.

Among the employers that feel pressure to reduce

working hours, the pressure was most likely to come

from employees or other sources in the private sector,

and from trade unions in the public sector (see Table 25).

Of the 17% of employers that feel under pressure to

reduce working hours, some 54% consider that they

are ‘quite likely’ to take steps to do this in the next 18

months, with the figure rising to 69% in the public

sector (see Table 26).

However, given the overall employer attitudes to

working time regulation as disclosed by the survey,

and the seemingly minimal pressure being exerted by

employees and trade unions to reduce working hours,

it will be interesting to see how the law develops over

the next few years. Working time is an area that has

recently been given specific attention at the European

level, where the debate over the future of the opt-out

is set to continue. The survey suggests that this will

not be warmly received by UK businesses.

Table 26: Question: If you feel under pressure to reduce employees’ working hours, how likely is it that you will make some move in this direction in the next 18 months?

Respondents (%)



Quite likely 54 44 42 56 69

Not likely 22 26 28 33 17

Don’t know 23 30 28 11 14

Table 25: Question: If you feel under pressure to reduce employees’ working hours, is this pressure from ...

Respondents (%)



... employees? 44 41 47 56 38

... trade unions? 28 22 17 11 55

... other? 47 52 44 33 48


Conclusions

The survey findings support the CIPD’s position on

employment legislation, emphasising that regulation is

not regarded by organisations as all ‘good’ or all ‘bad’.

The results show that regulation has had a significant

effect on employment practice and that HR

professionals feel that the impact is generally more

positive than negative.

Many organisations find employment legislation can

help them achieve their business goals and build trust

and positive relationships with employees.

The survey reveals that negative attitudes are mostly in

response to badly drafted and poorly communicated

legislation, with inadequate guidance often stemming

from inadequate consultation.

Employment regulation is seen to be more effective

where there is an element of flexibility eg the right to

request flexible working, rather than through the use of

a ‘one size fits all’ model.

Our research finds that HR policies are an effective

way of implementing employment legislation and that

many employers already go beyond the minimum

requirements, showing that good people management

in areas such as flexibility is good for the business as

well as employees.

It also has to be recognised that there is a limit to what

employment regulation can achieve in practice. Areas

that need to be addressed if changes to employment

legislation are to be translated into changes in

employment practice are line manager abilities and

training to support implementation.

The Government, as well as bodies such as the CIPD,

can play an important role in helping to encourage best

practice, rather than using the ‘threat’ of legislation to

impose change.


Survey methodology

This survey was conducted by the CIPD and Lovells in

March 2005.

A total of 10,300 survey questionnaires were sent out

to a representative cross-section of organisations of all

sizes (ranging from those with fewer than 25 people in

their workforce to those with more than 25,000) and all

industry sectors across the public, private and non-profit

sectors.

In all, 601 organisations responded by the deadline, a

response rate of 5.8%. Follow-up calls were then made

to a small sample of respondents who had indicated

that they were happy to discuss their answers in more

detail. This further information was used to help explore

and clarify trends highlighted in the survey data.

In presenting the statistics in this report, the results have

been rounded, which, in some cases, may mean the

total responses don’t always add up to exactly 100%.


Notes


Notes


Notes

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© Chartered Institute of Personnel and Development 2005

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