Cultural Adaptation – What are the current and upcoming workplace tensions?

Change rarely happen in a vacuum. Adaptation in the workplace often occurs in many varying but interconnected ways, prompted by regulatory, legislative and political changes as well as shifts in societal expectations. In this article we explore where our clients might experience some competing tensions in the workplace in the future, and how employers and employees alike must be ready to adapt.

Diversity and inclusion

DEI (diversity, equity and inclusion) issues continue to be high on board agendas, made more complicated by different regulatory and legislative changes across some jurisdictions, and shifts in approach in other jurisdictions.

Across Europe, there is a new focus on transparency and compliance with new reporting obligations at a European level, as a result of the Pay Transparency Regulations. In the UK, the new Labour government has signalled its intention to introduce pay gap reporting obligations on race and disability, as well as extending the equal pay regime to those areas. This may be a longer term change, but a much sooner expected change is the obligation to include data relating to employees of outsourced service providers in gender pay gap reporting. Employers operating across the UK and Europe may want to start auditing their current data collection methods and planning how to extend and improve data capture and quality (subject to data protection obligations), along with considering possible steps to reduce gaps.

However, for multi-national organisations with operations in the US, recent case law has created a confusing situation for employer’s DEI initiatives. At a very high level, early cases suggest diversity initiatives involving specific numerical goals or quotas are improper, but employers can continue to conduct targeted outreach to increase diversity of applicant pools, sponsor voluntary employee affinity groups, and provide mentorship and training opportunities for all applicants. While some US employers have scaled back their DEI initiatives, others are still pursuing expansive initiatives despite this uncertain environment. 

Effect of changes in political landscape

A change in governments also plays a part in changing the landscape for workplaces.

The 2022 election of a new administration in Australia resulted in a revised legislative agenda including the introduction of a new law to prevent sexual harassment as well as a right for workers to disconnect from work to encourage work life balance.

The recent UK general election will result in significant revisions to employment law in the UK. For example, the proposal for unfair dismissal protection from Day 1 rights would require employers to adapt how they deal with poor performers, likely needing more stringent processes akin to the position in New Zealand. Additionally, a combination of proposed changes to employment status categories (ie, workers becoming employees), restrictions on zero hours contracts and prohibitions on 'fire and rehire' all point to the need to audit workforce structure so that organisations can identify what changes they need to make to how they run their organisations from a personnel perspective.

Irrespective of which candidate secures victory in the US presidential elections, a conservative majority Supreme Court is likely to remain in place for the foreseeable future, and their opinions tend to lean to more employer friendly outcomes.

Mismatch of employer and employee expectations?

Within the workplace, there appear to be increasing tensions between how employers want employees to do their job and employees' expectations of work.

The trend towards flexible working continues apace, particularly in the battle for talent. However, some banks like other employers are looking to be more strident in their efforts to bring employees back to the office more often, including using various levers at their disposal (impacting bonus where minimum office days are not met and not allowing promotions in those cases) and reserving disciplinary action for extreme cases.

In contrast, many employees do not want to give up the working from home arrangements that have developed since the pandemic even where those have not been formalised. Some employees are going further and making flexible working requests to formalise their current arrangements in contracts, potentially pulling in the opposite direction to their employer.

In France, the "right to disconnect" has been in place since 1 January 2017 and provides certain rights for employees on "forfait jours" working time arrangements to benefit from mandatory daily and weekly rest periods, by formalising a right not to be constantly contactable on electronic devices. 

In Australia, similar changes to employment legislation will shortly provide Australian employees with the right to refuse to monitor, read or respond to contact (or attempted contact) from their employer or third parties, such as investors, outside their work hours, unless it’s unreasonable to do so. Whether the refusal to monitor, read or respond to contact is unreasonable will depend on a range of circumstances specific to the working relationship (including the employee’s seniority, work responsibilities, compensation and the level of disruption imposed by the contact).

Managers and team leaders in Australia should be clear with employees about their expected working hours and consider minimising any unnecessary and non-urgent contact outside of working hours.

We anticipate that the right to disconnect conversations with managers in Australia will inevitably overlap with psychological risk management. Therefore, if an employee refuses work, it is important that managers engage in a conversation with the employee to understand why they are seeking to exercise the right to disconnect and then consider developing and implementing control measures to mitigate the risks. It may also be necessary to consider how work is being delegated and divided among team members and reallocate to the extent reasonably practicable.

The new UK Labour government has indicated a desire to bring in a right to disconnect in the UK within the first Employment Bill. This has been a Labour Party policy since 2021 and at this stage it is likely that any initial employment legislation in the UK will include some kind of proposal, most likely akin to position in Ireland, which has a voluntary code that can be referred to in claims for breaches of other employment law.

AI: Help or hindrance to employees?

It is well-known that new technology in the workplace comes with many advantages, providing the tools to adapt and meet some of the challenges described above. New technologies enable the audits and collection of data necessary to meet ESG and pay transparency disclosure obligations. Technology can provide new ways of communicating, allowing employees to work more flexibility, or automating tasks, freeing employees up to carry out tasks that technology cannot replicate.

However, new technologies may themselves be the cause of new challenges in the workplace. "Technostress" (ie, stress experienced by workers in organisations as a result of their use of technology) has been reported as one of the main negative outcomes associated with the rise in remote work during and following the Covid-19 pandemic¹. It is believed to be caused by a variety of factors such as blurred boundaries between work and family as a result of constant connectivity as well as potentially worker's fear of being replaced by technology.

The obligation to consult with representatives if the introduction of new technologies would result in redundancies may go some way in assuaging workers' fears, although this is only a requirement in certain jurisdictions, such as France and the UK.

Many organisations will be closely watching the class action in California for use of Workday's AI-powered hiring tools in recruitment exercises, both against the recruiting employer and Workday. This case has the potential to expand the scope of liability for both employers and the AI vendors themselves under US anti-discrimination laws. In light of this decision, employers should be cautious when using AI in any employment related decisions, and carefully review their vendor contracts for liability and indemnification provisions. 

Conclusion

Given the variety of changes, flexibility will be key for organisations seeking to adapt to the changing wider landscape. However, that's not to say organisations cannot take preparatory steps.

This is the opportunity for organisations to understand the structure of their workforce properly, so that any necessary adaptations can be identified and implemented efficiently, keeping any impact on workers to the minimum possible.

¹ "How and When May Technostress Impact Workers’ Psycho-Physical Health and Work-Family Interface? A Study during the COVID-19 Pandemic in Italy" Sommovigo et al., Jan 2023