ABC HR Legal Issues
Often, managers of big organizations find themselves in the dilemma of selecting the most suitable and fitting candidate from a pool of many worthy candidates (Sargeant, 2014). Challenges arise when the recruiting team cannot choose between the forces of wanting a preferred candidate against a qualifying yet not a favorable candidate. Sometimes, the panel may expose the company to legal risks through unlawful recruitment practices. These include rejecting an application for reasons such as gender, race, or tribe, which amounts to discrimination I n the hiring process. At times, an organization may engage in inappropriate recruitment processes by failing to advertise vacancies to all potential candidates or using an irregular selection criterion (Gennard and Judge, 2005). A dissatisfied candidate can decide to bring a tribunal case against the company. With a particular focus on the ABC Ltd. case study, it is evident that a company may unknowingly engage in inappropriate recruitment processes that expose it to significant law-related perils. Thus, the needed assessment of the recruitment and selection process gets done.
Legal Issues Identified In the Case Study: Legal Risk
- Unlawful recruitment practices that amount to legal risks on the side of the company. The first candidate, Joan Keenan application is inappropriately declined.
- Although a competent and good team player in Keenan gets rejected because of her young age; her age makes her unqualified to handle a team she is supposed to manage. The company executive is worried that appointing Keenan may have an adverse impact on the company relationship with customers especially those that make up the user group: she may not be able to entertain the customers in the frequent social events held in night pubs, clubs, and restaurants.
- The team is predominantly comprised of male employees because there is only one other woman on the team other than Keenan. The recruitment team is concerned that the sales department employees, majorly men, may not take the issue of being managed by a young woman kindly. Denying anyone a job opportunity based on gender is unacceptable and unlawful according to (Cabrelli & Zahn, 2013) and the (Levinson, 2013).
- The third Candidate called David Constant is also inappropriately rejected by being aged and almost reaching the retirement age. David's age of 61 prevents him from attaining the job. Other than the factor of age, which is contrary to the Employment Equality (Age) Regulations Act of 2006 (Sargeant, 2006), the panel considers him less fit for the position because his wife is sick. Constant recently told the executive in confidence that his wife got diagnosed with multiple sclerosis and they are not comfortable with the fact that he will have to care for the sick wife soon. Since this would mean Constant has less energy and time for the senior role, the panel dismisses his application. It is inappropriate and unlawful to deny and implementation by age or the health situation of the applicant’s relatives (Franca and Zirnstein, 2014).
- The appointment of the fourth candidate Mike Replica as Steve’s successor is flawed and amounts to a legal risk. Replica is married to the Finance Director’s niece and regularly plays golf with the Chief Executive, Paul MacBarrel. The panel ignores these facts, yet it is indisputably true that they influence the decision. Although the candidate may be the best fit, his relationships with the board members should have necessitated the involvement of an external recruiting team. Possibly, the dilemma arising from these relationships would get resolved by contacting an outside and independent recruitment team much as the candidate has the innovative ideas required to take the sales team forward and improve its performance. External recruitment agencies are usually less biased (Bosch et al., 2010).
- The management decided to recruit solely from within the organization; particularly the sales team members to take over Steve’s jobs. According to the International Labour Organisation (1999), internal recruitment involves the reassigning of present employees to a new position through an internal transfer or promotion. While this qualifies as a method of rewarding effort and encouragement among the employees, the failure to advertise the position openly amounts to a legal risk on the side of the company (Cradden, 2014). An employee not necessarily interested in a job position may decide to sue the company for denying potential applicants the opportunity because the hiring team failed to advertise the position publicly.
- Unlawful practices arising from Mike Replica’s ideas
- Mike intends to implement a 100% commission based method of payment for employees in the sales department. At present, the sales team adds, on average, 20% or so to their monthly salaries in commission payments. With the new arrangement, all pay to be at risk so that 100% of earnings were dependent on sales targets; hence, employees may not get a salary if they do not make any sales. For instance, an employee who absents for reasons such as sick leave will not receive remuneration.
- Mike intends to implement a policy to dismiss underperforming members of the sales team every year, which will depend on the value of new sales achieved or not achieved within the year. According to Great Britain’s employment act (1999), an employer has the right to dismiss an employee where performance fails to meet the company’s expectation, though the employer is required to prove that he/she made reasonable effort to set a standard of return. Before implementing the dismissal policy, Mike would have to demonstrate that the employees he intends on dismissing did not make reasonable effort to meet the performance standards set by the company. The implementation of the policy translates to disregard of the workers’ rights to appropriate recruitment and dismissal process according to the existing laws. Much as the policy may have desired short-term benefits, its implementation, however, amounts to a legal risk on the side of the company.
- Although the plan to undergo regular medical checkups is a commendable decision and move, the requirement that overweight employees be forced to diet and maintain the required fitness level amount to infringement into their privacy regarding health. Barmes, (2007) explicates that encouraging fitness among staff reduces absenteeism since employees are less likely to fall ill. Though, Mike’s idea to enforce a fitness program which stipulates that obese workers would be required to diet until they reach a target weight implies that some workers face segregation contrary to the Equality Act 2006 (Kahn, 2010).
Defenses Available For ABC Ltd in a Tribunal Case
A bold employee, already working for the company or one to be, may decide to sue the company for failing to advertise the position openly. From the case study, the company's decision to conduct an internal recruitment process, and Steve’s job would not get advertised outside the enterprise. When an organization opts to undertake internal recruitment, a present employee gets reassigned to the new post through an internal promotion or transfer (International Labor Organisation, 1999).While the company is justified to recruit from within before considering an outside applicant, the management failed to notify employees working in other sectors. Instead, a meeting of the twelve sales staff takes the course at which Steve Brown’s retirement gets announced by the Chief Executive, Paul MacBarrel. Resultantly, potential team leaders who could qualify for the position were locked out. The company, however, can adequately defend the move before a tribunal. Usually, it is legally allowed to consider promoting existing employees if they qualify for a position that is left vacant within their department or organization (Bureau of National Affairs, 1993). Since the company sought to promote an existing sales team member to take over Steve’s position, it did not make any sense to advertise to all employees or outside the organization. The advertisement meant to reach out to employees only.
Indisputably, companies should be gender sensitive by having a workforce that meets the minimum male to female ratio in compliance with the 2003 Employment Equality Sexual Orientation Regulations (Haas, 2003). From the cases study, the sales staff comprises of men, which is contrary to the law on gender balance and representation in all places of work. Out of twelve members, only two are female. However, the company can sufficiently defend itself that the nature of the sales work requires a certain level of aggressiveness (Sparrow et al., 2013). Since men are ordinarily more aggressive compared to women, then the sales team is best placed by having many male employees rather than having more female salespeople. Also, the company can have a policy that approves the prevailing situation. The balance, however, can be achieved by having more female workers in other departments; hence, the relevant July 2006 Directive 2006/54 regulating the ratio of female to male employees in overall observed by the company (Sheffield, 2017).
Joan Keenan, the first applicant, can decide to sue the company for segregating her based on gender and age. The UK’s equality act 2010 explicates that employers and employees in the private and public sector have a legal responsibility of preventing and eliminating discrimination by promoting equality and equal opportunities between individuals with distinct characteristics (McColgan, 2011).While appreciating that male members make up a larger number, the panel is concerned that majority may not take her appointment lightly or positively, which will affect the team performance. The selection committee further considers Keenan as too young for the position much as she is a competent and good team player; she is a good deal younger than most of the team she is supposed to manage. Since the panel is interested in the company’s welfare, the decision to reject Keenan is justified and has the right to get representation. Consequently, it does not make sense to appoint an employee if the appointment will only lead to chaos in the team (Dickens & Neal, 2006). Otherwise, the selection is meant to ensure continual cooperation among team members for the sake of the company’s future. The candidate fails to meet the criteria because being a woman she may not maintain the relationship with customers especially those that make up the user group. These clients are usually taken out for entertainment in social events held in night pubs, clubs, and restaurants.
The company may need to defend itself for rejecting David Constant’s bid for the position of Sales Director. Constant is 61 years old, and his application gets inappropriately dismissed by being aged and almost reaching the retirement age. Other than the factor of age used to deny his request, the panel considers him less fit for the position because his wife is sick: he has recently told the executive in confidence that his wife got diagnosed with multiple sclerosis. If these reasons for rejection get revealed to Constant, he may sue the company for dismissal based on age and health status of a relative. A consideration of the company’s welfare and interests, however, provides a justification for the rejection. The company needs a highly committed sales director to meet the standards as already set by the friendly manager. Appointing a person whose attention will possibly be distracted by family issues, therefore, does not serve the best interests of the company. Constant may have less energy and time for the senior role; hence, the panel dismisses his application. Nevertheless, age is an important consideration because the company executive may not want to engage in various selection and recruitment by appointing an almost retiring employee into the sales director position.
A current or an employee to be may decide to challenge the management’s decision by suing the company for irregularly appointing Mike Replica as Steve’s successor. Replica is married to the Finance Director’s niece and regularly plays golf with the Chief Executive, Paul MacBarrel. His relationship with the two affects and influences the recruitment process. Where an applicant has a relationship with a part of the recruiting panel, is only fair to consider alternative recruitment methods to avoid biases and favoritism (Dickens, 2000). The company, though, can defend itself that the process was independent because members other than the Chief Executive Paul MacBarrel and the Finance Director were also involved in the selection and appointment process. The involvement of other members provides a justification that the panel was not biased; hence, the right candidate got appointed. Otherwise, it would have been unfair to turn down his application especially considering the fact the chosen candidate poses the necessary skills to work with the sales team and improve their performance.
Employment Relations Issues That Could Arise from Mike Replica’s Ideas
Upon assuming the role of the Director of Sales, Replica intends to implement three major changes aimed at improving performance. Firstly, he plans to abolish the existing remuneration policy where employees are entitled to an outstanding amount and a commission of 20% of their monthly sales. With the adoption and implementation of the new system, employees earnings will be entirely commission based and will be determined depending on whether the sales targets get achieved. While the implementation of the new payment arrangement may help to boost the sales, it will possibly affect the employer to employee relationship. Employees will feel insecure, and a majority will indulge in job hunting (Martin et al., 2010). Often, workers seek employment where they are guaranteed of a retainer even when the earnings partially depend on sales.
The implementation of Mike’s ideas means that the management will implement a policy allowing the dismissal of sales team employees who underperform for various reasons. Underperforming employees get dismissed and replaced every year for failure to meet the organizations set sales targets. Possibly, implementing the policy will lead to increased sales because employees will strive to meet set targets under all circumstances. However, it will have negative implications on the relationship between workers and the employer considering that they will be working in fear of dismissal for underperformance. A good relation with employees prevails when everyone has a sense of ownership and gets driven by the desire to succeed rather than the fear of being retrenched for underperformance. Just as the case with the proposed remuneration arrangement, the policy will only instill fear in existing sales team members and even scare away potential ones.
In his second proposal meant to improve the performance of the sales teams, Mike proposes the implementation of a regular medical checkup plan to assess the fitness levels of salespersons. Those found to be overweight will be required to diet until they reach a target weight. Although this is an excellent plan for guaranteed employee health, the chances are high that it will affect their relationship with the company. Unless it is voluntary, people disregard any medical checkup, especially if imposed, as an infringement into their personal lives and confidentiality (Ram et al., 2010). Also, overweight employees will certainly feel oppressed by being pushed around typo cut their weight when they do not have any problem with it. Therefore, the implementation of the three recommendations will affect the worker's perceptions and relations with the company detrimentally. The majority will feel insecure and possibly seek employment elsewhere before they get fired.
In summary, ABC Ltd. is undoubtedly in facing a challenge in choosing the right person to succeed Steve Brown who is retiring from the sales director position. Brown has continually performed his roles diligently that the management is worried whether the incoming will competently match his performance. While trying to find a suitable candidate, the management resolves to conduct an informal recruitment process that would see one of the twelve staffs promoted to the sales director position. Four staff members express interest in the position, and three get rejected for various controversial reasons. For instance, Joan Keenan’s application gets dismissed because she is a young woman whereas management also denies David Constant's job application because he is nearing the retirement age and has a sick wife. The recruitment team settles for Mike Replica although overlooking the fact he has a close relationship with the Finance Director and Paul MacBarrel the company CEO. The decision and choice of Mike Replica, therefore, may have been informed by biases considering that the other applicants were turned down for controversial reasons. Apparently, the plaintiffs can sue the company for rejecting their bids unfairly and for offering the job to Mike with favoritism and contrary to the Equality Act 2006. The selection committee rejects Keenan because she is too young for the position; given that she is younger than most members who are predominantly males. Other than the factor of age used to reject David Constant’s application, the panel considers him less fit for the position because his wife is sick.
Like many other organizations, ABC Ltd. should focus on a gender-balanced. From the case, it is certain that the organization’s recruitment process is biased and informed by gender, which should not be the case. Sadly, the team predominantly comprises of men, and the hiring panel is concerned that the sales team may reject a young lady's leadership. A gender equality policy throughout retention processes ensures that essential consideration and determinant should be competency based rather than a person's sex (Hepple, 2010). The implementation of the ideas proposed by Mike will certainly have negative implications on the employee-to-employer relations. Many of the sales team members may opt to quit and find employment elsewhere because the proposals amount to imposing policies on the workers. As discussed, this will lead to a lack of confidence in the company and even instill fear in employees. For instance, the policy that underperforming sales team members face dismissal and new ones hired every year are likely to scare some employees away. Similarly, the proposed remuneration arrangement does not serve the interests of the workers much as it may seem commendable. The management should engage the sales team in deliberations that will lead to fair and mutually beneficial strategies rather than building pressure or creating fear on the workers. Consultation with employees begins with the Directive 2002/14/EC that employers must disclose and share information on probable developments on the organization’s activities (International Labour Organization, 2002).
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