Initial Report on Naturally Cold Case Study | Employment Relations Problems

1. You are required to write a 2000-word Initial Report on the Naturally cold Case Study.

2. You are required to structure your Initial Report in two parts.

Part 1 where you will examine and explain the nature of the employment relationship at Naturally cold (500).

Part 2 where you will examine and explain identify and explain the main employment relations problems at Naturally cold (1500 words).

3. Your report must make use of relevant employment relations models, tools and concepts, and empirical evidence where appropriate.

4. Collusion. This is an individual piece of work so do not collude with others on your answers as this is an academic offence.

5. Plagiarism and collusion detection software will be in use. Where the University believes that academic misconduct has taken place the University will investigate the case and apply academic penalties as published in Section 10 Academic Misconduct regulations.

6. Once completed please submit your paper via the submission link provided on Blackboard.

7. You can only submit ONCE so please ensure you submit the correct and complete document.

NaturallyCold, the organic ice cream and sorbet manufacturer, distributor and retailer offers beautifully presented, delicious and healthy ice creams and sorbets. The business was established in 2015 in Cambridge by husband and wife Alessandro (CEO) and Paula Bosetti (Head of Finance).

It has an annual turnover of £39m and 482 employees. The business has grown quickly and the founders/owners feel that they are getting closer to achieving their vision and become the UK’s largest independent organic ice cream retail outlet. In 2018 NaturallyCold embarked on an expansion programme which involved introducing a fleet of 92 nationwide ice cream vans, opening another processing plant and setting up a further 20 retail outlets, making 107 outlets and three plants in total.

In order to staff the new manufacturing plant as well as the new stores and ice cream vans a recruitment drive had been essential. Employees at Naturally Cold are typically young, often single, Caucasian, well-educated and often committed to healthy ‘organic’ lifestyles. It is assumed that because many of them see their work as a way of financing their lifestyle, rather than as part of a planned career progression, that they are content with the way things are.

A nationwide recruitment campaign was initiated, and in keeping with the company ethos, young graduates were targeted. The salary levels were kept low, ranging from £25-29,000 per year. The thinking behind this strategy was that those who opted to work with natural products would be concerned more with a healthy lifestyle than with money and therefore happy to accept lower rates of pay.

Instructions:

In addition a need for extra managerial and vehicle maintenance staff was identified. Managers within the company are paid slightly more than graduate employees. Salaries for this group range from £33,000 to £42,000 at the top of the scale, and handful of senior staff get more than this. But instead of recruiting externally, which is costly for this group, the Head of Finance, Paula Bosetti, decided that the cheapest way to increase the numbers of managerial staff would be to train them in-house. In this way, the company would keep staff sufficiently motivated to ensure that they considered a long-term management career with the organisation.

Accordingly a training and development programme was designed specifically with the management of Naturally Cold in mind. The scheme, named ‘Hot Opportunity’ by the company and nicknamed ‘not opportunity’ by the employees, was launched with an interactive page on the company intranet. A number of staff, all of whom were considered to have managerial potential, were then told that they had been put on this management training programme even if they hadn’t expressed an interest.

The programme required their compulsory attendance at training sessions on two afternoons and one evening a week for a period of two years, together with several weeklong residential courses. Paula was surprised when a number of female employees refused to take part in the scheme claiming they weren’t interested in development. She felt that the benefits of ‘hot opportunity’ must not have been explained adequately and blamed her colleagues for poor communication. After some thought she decided to offer an incentive and announced that the managerial salary following a successful training period would be £38,000. Existing, experienced managers were not happy.

Simultaneously, the company acquired a distribution warehouse that was being sold by an organic juice company, ‘Slake’, based in Wolverhampton. This family-based Asian company had made a point of employing local people, many of whom were Asian, not many of whom were graduates. Mr Singh, founder and CEO of Slake for over four decades, sold the company reluctantly and not after having secured a deal for ‘his people.’ A pillar of the community, Mr Singh considered the well-being of his employees a key responsibility, and made sure that all 36 drivers and administrative staff from Slake were transferred to Naturally Cold in the spring of 2018. Because many of their terms and conditions exceeded those offered by Naturally Cold the company reluctantly agreed to ‘ring fence’ them and continued to pay them at a higher rate. The assumption was that, after about five years, comparable employees in the rest of the organisation would have caught up with these higher levels of pay.

Nature of Employment Relationship at Naturally Cold

Other distribution drivers across the rest of the organisation have discovered this and, unsurprisingly, are not happy: they grumble amongst themselves when they meet in the depots but have done nothing formally as they don’t know quite who to complain to. Their grumbling to others, for example when they deliver to the retail outlets, has led to a surge of discontent with the way in which a number of staff seem to be taken for granted while others are apparently granted privileges.

To make matters worse, the newly recruited ice cream van drivers are also unhappy. They have heard the grumbles and feel that their pay, currently £10.50 an hour, is too low in comparison, particularly when they have to drive and additionally sell ice cream, keep scrupulous accounts of the money they handle and maintain hygienic conditions in their vehicles.

Furthermore, some of these drivers, particularly those covering regions at considerable distance from the distribution depots, are spending a lot of time traveling, not selling, in order to keep their vans re-stocked with ice cream. When the weather is hot this involves particularly long days on the road. Chris the production director is aware of this, but thinks it unimportant, as he says, ‘they are not driving all the time but only for the periods in between bouts of selling… I mean, I relax when I drive, don’t you? It’s not like you’re working at all.’

Discontent among staff is nothing new but has never spilt over into direct confrontation or dispute. However, everyone recognises that there might be a problem under the surface. There have been one or two “incidents” in most of the business units over the years which have usually resolved themselves when the employee involved found themselves other jobs.

There are no trade unions recognised in the firm and there has never been a claim for a union to be recognised. Without some prospect of increased wages, stability or promotion, staff will not stay. But by the end of the spring, cracks in the ways in which the company operated began to appear. The organisation experienced unusually high rates of staff turnover (around 57-78% in their metropolitan branches) which Alessandro dismissed initially when he pointed out that “no one is irreplaceable” and that most low level employees could easily be replaced with ‘temps’, ‘ideally young women because they work harder and grumble less’.

Worse still, during the summer, the company experienced a food scare, when several people who had purchased ice cream from the company contracted food poisoning. The link to the company was never confirmed, but the publicity generated ensured a drop in sales and, just as importantly, a drop in the number of job applicants.

Main Employment Relations Problems at Naturally Cold

As a consequence of this, the health and safety procedures within the organisation were enforced with a rigour that at times verged on the draconian. It was during this period that a managerial trainee, Kevin, noticed that one of the process workers in the main flavour-mixing department wore a Kara. (A Kara is a metal bracelet worn by Sikhs as a protection against evil. Their symbolic significance is such that the bracelets are worn continuously and never removed.)

Kevin decided to ‘make an example’ of the employee in question, Ms. Anand. She, however, refused to remove the bracelet even when he insisted that it was a health hazard. She pointed out that her co-workers wore rings and none of them had been told to remove their jewellery even although this could easily fall off into the mixtures destined to be added to the basic ice cream ingredients (unlike her Kara that would have to be cut off if she wanted to remove it).

She was not working in an area where the bracelet could get caught in machinery and it was highly unlikely that germs would cluster beneath her bracelet ready to leap into the food at the soonest opportunity. Furthermore she had worked for the company for two and a half years and in all of this time no one had said she, or her Kara, was a health hazard.  After a number of verbal scoldings by her line manager, which Miss Anand did not heed, she was summarily transferred from the flavour-mixing department to the packaging department.

This department was, of necessity, extremely cold and Miss Anand was the only employee required to work there for her entire daily shift. (Other employees working in this department only did so for short periods of time, none for more than two hours duration.) She was so distressed by this turn of events that she became ill and was signed off sick by her GP. Protests to the company from the Sikh Foundation, insisting that the bracelet was not a health hazard, fell on deaf ears and were seen as intrusive. Ms Anand resigned.

As a consequence of this four other employees in the department had to cover her work and were told, with no notice, that they each had to work for an additional 2 hours in the packaging department on top of their normal hours. This meant that two of the staff were expected to come into work at 8am instead of 10am in the morning and two had to work until 8pm instead of 6pm.

Julie, a mother of school aged children was upset by this, she began looking for other work and, in desperation, contacted her local MP who put her in touch with the Bakers Food and Allied Workers Union renowned for its claim that it is ‘at the forefront of protecting workers from situations and substances that can damage their health’. Julie shared her concerns with the union who shared with her a report about wages in the industry. The article said that the latest up-grading of the national minimum wage had come into force on 1 October. Julie was shocked to see that these rates were higher than what NaturallyCold paid its lower-paid staff.

The union began distributing leaflets to those at the processing and distribution plants immediately. A number of staff, including most of those working in the freezing, flavouring and packaging departments, joined the union.

Three days later, Alessandro and Paula were confronted by a demonstration outside company headquarters. In an statement to the local newspaper, the demonstrators stated that ‘we didn’t want things to end up like this but there was no other way (…)’. Then the BFAWU sent a letter to Alessandro and Paula asking for a meeting, with the Union, pointing out that its expertise in employee relations matters would be beneficial to the company.

Alessandro was beside himself. He angrily spoke to each manager accusing the workforce of disloyalty. ‘I am so disappointed. Who do they think they are? We’ve given them work, to some of them for years, and this is how they pay us back? Traitors! I feel like quitting this whole thing: the more I do, the worse it gets; the more money we make, everyone wants a cut!’ Paula was so upset that she put up notices saying that anyone joining the union would be dismissed on the spot. She did not reply to BFAWU, and wrote to company solicitors asking what could be done about the union intervening in company affairs in this way and is awaiting a reply.