Posts Tagged ‘managing people’

What is ESG and how does it create value for your business?

Tuesday, November 23rd, 2021

Your business, like every business, is deeply intertwined with environmental, social, and governance (ESG) concerns. Voltedge Management can work with you to develop your own ESG strategy that will engage your employees and stakeholders. We can leverage our extensive experience  to create a programme that will be tailored and personalised to your business needs.

The E in ESG, environmental criteria, includes the energy your company takes in and the waste it discharges, the resources it needs, and the consequences for living beings as a result. Not least, E encompasses carbon emissions and climate change. Every company uses energy and resources; every company affects, and is affected by, the environment.

S, social criteria, addresses the relationships your company has and the reputation it fosters with people and institutions in the communities where you do business. S includes labour relations and diversity and inclusion. Every company operates within a broader, diverse society.

G, governance, is the internal system of practices, controls, and procedures your company adopts in order to govern itself, make effective decisions, comply with the law, and meet the needs of external stakeholders. Every company, which is itself a legal creation, requires governance.

Just as ESG is an inextricable part of how you do business, its individual elements are themselves intertwined. For example, social criteria overlaps with environmental criteria and governance when companies seek to comply with environmental laws and broader concerns about sustainability. Our focus is mostly on environmental and social criteria, but, as every leader knows, governance can never be hermetically separate. Indeed, excelling in governance calls for mastering not just the letter of laws but also their spirit—such as getting in front of violations before they occur, or ensuring transparency and dialogue with regulators instead of formalistically submitting a report and letting the results speak for themselves.

But even as the case for a strong ESG proposition becomes more compelling, an understanding of why these criteria link to value creation is less comprehensive.

How exactly does a strong ESG proposition make financial sense?

ESG links to cash flow in five important ways:

  • facilitating top-line growth,
  • reducing costs,
  • minimizing regulatory and legal interventions,
  • increasing employee productivity, and
  • optimizing investment and capital expenditures.

Each of these five levers should be part of a leader’s mental checklist when approaching ESG opportunities—and so should be an understanding of the “softer,” more personal dynamics needed for the levers to accomplish their heaviest lifting.

Paid Sick Leave – What you need to know as an employer

Tuesday, November 9th, 2021

Workers to get at least 10 days paid sick leave phased in between January 2022 and 2025.

 

  • The government’s statutory sick pay scheme will be phased in over a four-year period, starting with three days per year in January 2022, rising to five days payable in 2023 and seven days payable in 2024.

 

  • Employers will eventually cover the cost of 10 sick days per year in 2025. The statutory days a minimum level of sick pay a company must provide but they have the freedom to offer more.

 

  • Sick pay will be paid by employers at a rate of 70% of an employee’s wage, subject to a daily threshold of €110. The daily earnings threshold of €110 is based on 2019 mean weekly earnings of €786.33 and equates to an annual salary of €40,889.16.

 

  • An employee will have to obtain a medical certificate to avail of statutory sick pay paid by the employer and the entitlement is subject to the employee having worked for their employer for a minimum of six months.

 

  • Once entitlement to sick pay from their employer ends, employees who need to take more time off may qualify for illness benefit from the Department of Social Protection subject to PRSI contributions.

 

  • In regard to the requirement of a doctor’s cert, employers can “choose” to trust their employees and not require one but that it is “reasonable” to include it in the Statutory requirement.

 

  • The legislation will expressly state that this does not prevent employers offering better terms or stop unions negotiating for more through a collective agreement, including agreements already in place.

 

  • The new sick pay legislation follows similar measures already introduced to enhance employment rights including paternity benefit, parental leave benefit, enhanced maternity benefit, treatment benefit, and the extension of social insurance benefits to the self-employed.

Can I change my employees’ terms & conditions when they are working remotely?

Wednesday, August 18th, 2021

Managing HR is challenging at the best of times! We are here to answer your queries and provide up to date HR advice on what is impacting businesses today.

Welcome to our weekly Q&A – if you have a question email us at info@voltedge.ie.

Can I change my employees’ terms & conditions when they are working remotely?

Permanent or temporary changes to terms and conditions of an employee’s contract can occur:

  • With the employee’s consent.
  • Without the employee’s consent, but in reliance upon a contractual provision allowing for changes of the contract, such as a variation or mobility clause.

Variations with Employee Consent

The provisions of an employment contract most affected by the impact of COVID-19 relate to remuneration, working hours and location of work.  Remuneration and working hours are fundamental terms of any employment contract (as is work location but to a lesser degree).  It is a general principle of contract law that the terms of a contract cannot be altered without the agreement of both parties, meaning that unilateral alterations of these provisions by an employer would generally amount to a breach of contract.

Employers must also consider the statutory protections afforded to employees.  Reducing an employee’s pay and without consent may also expose employers to claims under the Payment of Wages Act 1991 before the Workplace Relations Commission, or employees may resign and claim constructive dismissal.

To implement a valid reduction in pay or working hours, without the risk of legal challenge, employee consent or agreement should be sought.  In practical terms this should involve communicating with employees regarding the financial impact of COVID-19 on the business, outlining the rationale behind the proposed changes and consulting with the employees well in advance of the proposed changes to obtain the necessary agreement to reduce pay or working hours.

Once consent or agreement has been obtained, employers should record the agreed variation to the terms and conditions in writing.  This can be done by way of a side letter or addition to the contract which must be provided to the employee no later than one month after the change takes effect.

Variations Through Reliance on Terms of Contract:  Flexibility and Variation Clauses

Many employment contracts include a flexibility or variation clause that aims to allow employers to vary the terms and conditions of employment without any input from an employee.  While the existence of such a clause in an employment contract may be of some comfort if changes are proposed, it should not be relied upon in isolation to impose changes without consultation.  The Irish Courts, while accepting, that in certain circumstances alterations to terms and conditions are necessary for commercial effectiveness, have consistently held that such clauses must be exercised reasonably. It is generally accepted that such clauses are intended to permit minor non-material changes, which do not relate to core terms, such as updates to reflect changes in law or statute or a change in a work practice. Imposing pay cuts, even of a temporary nature, without consultation or consent, by reliance on such clauses is unlikely to be viewed by a Court as reasonable.

Variations: Mobility Clauses

With remote working, or some form of hybrid arrangement between home and workplace set to continue, many employers have already taken steps to reduce the capacity of their physical workplace.  Reliance on a mobility clause post lockdown to relocate employees to work from home permanently, or, to introduce a hybrid working arrangement where employees are opposed to such changes is not without risk of legal challenge.

In order to successfully rely on a mobility clause to introduce significant changes to a work location, employers should provide employees with as much notice as possible of the proposed change, provide detail on the commercial rationale for the proposed changes and afford the employees an opportunity to make representations in respect of the changes before introducing such measures.

Can Employees Who Refuse to Accept Changes to Terms and Conditions be Lawfully Dismissed?

Section 6.1 of the Unfair Dismissals Act 1977-2015 (the Acts) provides that dismissals are deemed to be unfair for the purpose of the Acts unless “having regard to all the circumstances, there are substantial grounds justifying the dismissal”. Can a dismissal for refusal to accept material changes to terms and conditions, which an employer claims are essential to the survival of a business, qualify as “substantial grounds” so as to make the dismissal lawful?

The commercial rationale and full effect of the proposed changes should be sufficiently and clearly explained to employees.  Given the importance of fair procedures in the Irish context, it is likely that the procedural fairness followed by an employer in seeking to introduce changes to fundamental terms of the contract will be critical.

Consideration should be given to the extent to which the burden of the proposed changes is being shared between management and employees below management level.  Ideally any changes should be across the board and not targeted at lower paid employees or middle management while senior management remain unaffected. Targeting specific groups of employees can also lead to potential discrimination claims and should be avoided.

Key Takeaway: Engage and Consult

To avoid potential claims, employers who propose to implement changes to employee terms and conditions, on a permanent or temporary basis, should consider putting in place arrangements to engage and consult with them in advance.  Where agreement cannot be reached, evidence of reasonableness, consultation and negotiation by the employer will be critical in successfully defending any legal challenges that may ensue.

 

Need more help? Voltedge Management team can help you to get advice on all aspects of human resources and management. Email Ingrid at info@voltedge.ie or ring our offices at 01 525 2914.