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Big Businesses poor HR practices results in dire consequences

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The last few weeks have seen 4 huge companies suffer PR nightmares and lots of legal trouble as a result of their HR management practices falling short of the mark. A couple of recent “Neils Nuggets” covered two of them - Uber and Ryanair (if you didn’t read them and would like a copy resending, just email your request).

 

Here we now have McDonalds and Monarch in the news!

 

Monarch – failed redundancy consultation

Unite says airline did not give employees proper notice of redundancies and have announced yesterday that it would be launching legal action on behalf of Monarch staff after the airline went into administration earlier this week.

Unite, which is Britain’s largest trade union with 1.42 million members in total and represents around 1,800 engineers and cabin crew who worked for Monarch, has said it is lodging an employment tribunal claim on the grounds that the airline failed to consult staff ahead of making them redundant.

The current law on redundancies means that businesses with more than 100 employees must give a minimum of 45 days notice if they intend to make people redundant. Employees with two or more years service are also entitled to statutory redundancy pay.

 

McDonalds - McDonald’s workers to go on strike in Britain for first time

McDonald’s faces its first strike since it opened in the UK in 1974, with workers at branches in Cambridge and Crayford, in south-east London, staging strikes in a row over the use of zero-hours contracts and ‘inexplicably’ low pay.

About 40 staff will go on strike after a ballot in favour of industrial action amid concerns over low wages and the use of zero-hours contracts.

The fast-food chain has been one of the biggest users of zero-hours contracts in Britain, although it has recently started offering workers the option of moving to fixed hours.

It announced in April that workers would be offered a choice of flexible or fixed contracts with minimum guaranteed hours, saying that 86 per cent have chosen to stay on flexible contracts.

The Bakers, Food and Allied Workers Union said staff want a wage of at least £10 an hour and more secure jobs.

McDonald’s said those taking action represented 0.01 per cent of its UK workforce and said the dispute was related to its internal grievance procedures.

McDonald’s says all its hourly pay rates are above the national living wage. For under-18s this is £5.42, for 18- to 20-year-olds it is £6.84, for 21- to 24-year-olds the rate is £8.13 and for over-25s it is £8.31.

McDonald’s claims that three pay rises have been delivered to staff since April 2016, increasing the average hourly rate by 15 per cent.

But McDonald’s said those taking action represented a small fraction of its workforce and that it was related to its internal grievance procedures.

Nevertheless, it’s a still a PR disaster for them.

 

Uber – TfL revoked the London operations of Uber after failing background checks

TfL said the ride-hailing app was not fit and proper to hold a private hire operator licence. Among the reasons given were the company’s deemed failure to report alleged criminal offences carried out by its drivers and a lax attitude towards background checks and obtaining medical certificates.

 

Ryanair – Failure to plan pilots holidays properly

Thousands of journeys were cancelled, leaving thousands of passengers disappointed and angry, all due to the company messing up the planning of its pilots’ annual leave. 

A change to its holiday year from April to March, to January to December, had resulted in more annual leave needing to be allocated to its pilots within a tighter timeframe in September and October. The bottleneck of leave requests has clearly placed immense amounts of pressure on the business, to the extent that operational requirements can no longer be met.  No pilots at work meant no flights!

As a result of all this, the pilots (and their Union) are using their strengthened position as leverage to negotiate better T&C’s . This could have been avoided if they had acted correctly and efficiently in the first place.

 

What can we learn from these stories?

These business faces some very serious costs as a result of their mistakes – in terms of cash, for sure, but also in terms of reputation. It’s been PR suicide for all these companies involved. Goodwill in all cases, with their staff AND customers has been hammered.

It demonstrates what an impact good, or as in this case bad, HR management practices can have on a business, no matter what size it is. It’s proof HR does have a real commercial value to business – do it right and it will save the business money in the long run. Guaranteed.

It highlights the serious implications that can follow because of not complying with the law or treating staff in the right way. Not good in any way for a business. Having effective good advice and documents at the right time can prevent so many issues.

The bottom line here? Lose control of your people practices, and the consequences can be dire. 

 


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