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Overhaul of HR culture

30 October 2016 by Lydia Newman

Overhaul of HR culture - read more

Sports Direct looks to reform its employment practices following an internal investigation

Following the blaze of negative publicity for Sports Direct after a newspaper and BBC investigation into its employment practices, the company undertook an internal investigation. In September 2016, the company announced its findings and strategy for reform alongside the annual report. It identified that:

  • The six strike policy was too subjective and created an overtly hierarchical atmosphere, which created a difficult working environment
  • There were shortcomings with the way the company’s HR team treated agency staff in comparison to company employees
  • There were communication problems caused by a language barrier.

It has been proposed that the six strike policy should be withdrawn immediately and replaced with the employee grievance and disciplinary policies. In addition, training is to be provided to supervisors in relation to the policies.

It announced that the HR department responsible for the warehouse at Shirebrook should be expanded to include a nurse and a welfare officer. This reflects the concerns raised in respect of the high instance of ambulance call outs at the site (76 times in two years) and allegations that agency workers were penalised for taking sick leave.

All casual workers on zero-hours contracts are going to be offered the chance to enter into permanent contracts with a minimum of 12 hours of work each week. It has also been proposed as a trial that 10 agency workers per month, out of a current contingent of around 18,250, will transfer to become employees of the company.

It was also noted that there has been full cooperation with HMRC in relation to the failure to pay national minimum wage to some workers as a result of extensive daily searches. The Chair of the Business Innovation and Skills Committee viewed the report as being positive.

Although an extreme example of bad publicity around HR practice, Sports Direct is looking to enact an overhaul of HR culture and practice. As highlighted previously, this affair shows that employment law disputes matter and can have significant reputational and financial ramifications for companies. Regular reviews of HR culture and practice are crucial and it is incumbent upon boards to ensure that such reviews are carried out.

Gender pay gap reporting

The duty under the Equality Act 2010 (Gender Pay Gap Information) Regulations to report information on the difference in pay between male and female employees will apply to employers with 250 employees or more (including apprentices and workers who have a contract to personally do work).

Although the regulations are not expected to come into force until April 2017, employers who are under a duty to submit a report are expected to be able to do so in relation to all types of pay, including bonuses. Data should therefore be collated in relation to bonuses that are payable over a period of time (for example, a 12-month incentive scheme) from April 2016.

This information will be needed in order to calculate the gender pay gap for organisations that use such schemes, even though the duty to calculate the gap will not come into force until April 2017 and the duty to report will (in all likelihood) not come into force until April 2018.

To ensure future compliance and potentially take steps to reduce or eradicate any current gender pay gap, relevant companies with 250 employees or more should review pay and bonus schemes to ensure the correct data can be easily collated for use now or in the future.

See Bernandette Barber’s feature, ‘Reducing the gap’, for more on gender pay gap reporting.

Case round-up

Although historically the summer months are relatively quiet in the Employment Appeal Tribunal, and other employment law courts, there have been a number of interesting cases reported recently which are worthy of note.

Religious dress at work

Religious dress can be a sensitive subject to contend with, illustrated by the recent press coverage of the Bhurkini ban in France, and a number of Advocate General decisions which will be heard by the ECJ later this year demonstrate that such difficulties do not escape the work place. Both cases involved female Muslim employees wearing Islamic headscarves (hijabs) and their employers seeking to enforce bans on such attire.

In one case, heard in Belgium, involving a receptionist banned from wearing a hijab by G4S, an Advocate General held that no direct discrimination had occurred, and any indirect discrimination was objectively justified.

In another in France, this time involving a design engineer similarly banned following a complaint from a client that her attire made them feel embarrassed, an Advocate General reached a different view, namely that the employer’s action constituted direct discrimination and indirect discrimination which was not objectively justified.

It is rare for two such conflicting Advocate General opinions and it remains to be seen which direction the ECJ will lean when the cases are heard later this year. For the time being, they serve as a usual reminder that decisions relating to an employee’s religious dress must be considered carefully and may be open to challenge.

Editing investigations

Anybody involved in disciplinary investigations should take note of the recent Employment Appeal Tribunal decision of Dronsfield v University of Reading.

Dr Dronsfield (the claimant) was dismissed following a sexual encounter with a student which was the subject of a complaint from the student’s ex-boyfriend. As part of the investigation, a Professor’s Investigatory Report was edited by a member of the University’s HR team. Some of those edits included the removal of supportive comments relating to the claimant’s good conduct, evidencing that there had been no breach of the University’s statutes relating to conduct and reasons for dismissal.

The dismissal was upheld through an internal appeal process and an Employment Tribunal (ET) hearing. The Employment Appeal Tribunal (EAT) overturned the ET decision and sent back to the ET for reconsideration on two grounds:

  • The removal of the wording relating to good conduct as this formed part of the test to judge whether or not gross misconduct had been committed
  • The ET needed to explore the reasons why the positive comments had been removed.

This case highlights that it is crucial that investigation reports are not changed or reworded by HR professionals (or others). Any changes may need to be justified in any future ET hearing and it may therefore be useful to keep a note of any such reasons as draft reports are disclosable. A dismissal may be found to be unfair if an investigation report is altered even if the rest of any dismissal process is fair.

Lydia Newman is an Employment Solicitor

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