Future of employment

The focus on corporate transparency has never been greater and all retail and consumer businesses are likely to face increased scrutiny to ensure workplace equality. The D&I agenda encapsulates all aspects of inter-workplace relationships from equal opportunities, equal pay and entitlements, workplace respect and ensuring employee well-being is protected. 

The importance of D&I to any business is being shaped not only by regulation and government policy but also by consumers who are increasingly concerned with ensuring the businesses they engage with promote ethical qualities. Due to social movements and heightened awareness, it is becoming a moment of truth for consumers who expect genuine commitment and authentic results. The D&I agenda also reinforces the purposes of Environment, Social and Governance (ESG) measures in promoting positive improvements in businesses to reflect the changes within the workplace to which society aspires. Businesses need to consider their corporate responsibilities and ensure their policies, practices and strategies advance their commitment to D&I or risk reputational consequences and possible workplace investigations. Taking pro-active steps such as committing to new policies, practices and responsibilities voluntarily could be beneficial for the business, its staff and even its brand. The nuances and sensitivities of managing D&I in the workplace also need to be appreciated. D&I should therefore continue to be a board priority for 2022.

Considerations include but are not limited to:

Pay Reporting: In addition to the increased possibility of equal pay claims, pay transparency generally has more focus, for example CEO pay ratio reporting, gender pay gap reporting and the potential for ethnicity pay gap reporting. Employers need to be able to justify pay decisions and gradings at all levels to protect themselves.

Equal Pay: Policy mandates equal pay for all genders for those doing the same or similar jobs, doing work of 'equal value' and doing work that has been rated as 'equivalent' or in the 'same grade'. Employers need to ensure and re-evaluate any payment terms for various roles to ensure equal pay amongst employees to comply and mitigate scope for adverse claims.

Modern Slavery: Of particular sensitivity and reputational significance are issues in business practices and in particular the supply chain in relation to modern slavery. Businesses need to work to identify the risks of slavery practices in their supply chains and devise policies to address them. The expectancy is for businesses to assume additional responsibilities which include but are not limited to identifying high risk geographies in the supply chain, drafting dedicated policies or nominating an officer to prevent issues of slavery arising in their business.

Demographic Targets: Setting targets can give employers a good benchmark to work towards to ensure their workforce is as diverse as possible. This can include strategies in the recruitment pipeline and ensuring employee retention rates are high. For example, practices such as age-profiling will become increasingly more important to demonstrate a commitment to equality. 

Workplace Policies: Employers need to put in place and update D&I policies to encourage entire workforce dedication to this agenda. There must also be coherent methods of incident reporting and measures in place to respond to breaches of D&I.

In 2022, retail and consumer businesses will need to be aware of the rise of workplace investigations from regulators as a result of increasing collective employee pressure. Many large retailers are unionised and will know that there has been a recent trend for collective claims to go in favour of unions. For example, Mercer v Alternative Future Group Ltd and Ryainair DAC v Morais and others increased protection for employee strike action. This shift is perhaps reflective of the promotion of ESG and D&I beyond the employer/employee relationship and highlights that employers must be sensitive to such matters to minimise investigations and public scrutiny. This is a strategic consideration but one employers must be aware of to mitigate reputational damage. 

In addition, the practice of "fire and re-hire" is continuing to receive scrutiny as a method of workforce management, but employers should be wary of the adverse impact of such practices which may not be unlawful if carried out properly but which may well be controversial to implement. The potential for reputational damage as a result of perceived poor treatment of the workforce has never been higher as a result of social media and increased understanding of issues in the workplace. ACAS has issued Guidance on Fire and Re-hire to illustrate the sensitivity employers should recognise to such managerial decisions. Despite the potential lawfulness of such practices, employers may evaluate the necessity of such actions in 2022 to avoid any potentially harmful ramifications.

With EEA nationals no longer having free movement within the UK, retail and consumer businesses should continue to be thinking about future proofing their business. The retail sector has historically relied heavily on EU nationals to meet its workforce needs so understanding the new immigration regime and the requirement for sponsor licenses is of crucial importance. 

Employers need to consider the international status of a greater cross section of employees, and continue to grapple with understanding the rights and obligations of individuals from outside of the UK. Brexit has already caused labour shortages and the increasing immobility has created inflexibilities in workforces. As the full impact of Brexit on immigration and working rights manifests itself manifest, employers must be resilient to the challenges that they will face.

Across the retail and consumer sector, businesses are re-examining the decision to outsource certain services as retailers are re-considering their current operative models. The effects of the COVID-19 pandemic and Brexit have highlighted operative weaknesses and inefficient areas. Businesses may want to bring certain services in-house to gain more control and stability over their workforces. This will require engaging in a cost-benefit analysis and risk assessment to determine whether it is appropriate. Bringing services in-house will also bring additional obligations on employers which must be fully understood and with which they will need to comply.