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Pay tensions continue in the workplace

The workplace will continue to provide the backdrop to a number of potential areas of tension in 2013, with pay restraints and employee motivation and engagement providing on-going challenges for employers.

Employment relations

According to John Taylor, Chief Executive of the employment relations service Acas, pay issues will cause tension as austerity measures continue to bite.

“The struggling economy will continue to influence Britain’s workplaces,” he explains. “With forecasts for continuing long-term austerity measures and a possible triple-dip we may very well see increasing tensions and conflict around pay. Pressure on employers to keep wage costs under control could clash with the desire by employees to catch up with the cost of living – inflation has been outstripping median pay awards for the last three years.”

He warns that if there is an increase in inflation and interest rates, this will have an impact on wage demands.

Employee engagement

Taylor suggests that employers should look beyond pay for other ways to motivate and engage staff. One possible option is offering more flexible working arrangements, which could coincide with the Government’s plan to extend the right to request flexible working to all employees, not just parents and carers.


Another challenge is the growth of outsourcing. The trend looks set to continue and will mean that employers have to manage groups of employees with different terms and conditions. It also creates problems for employers further down the subcontracting chain, who are likely to have less control over the terms and conditions of their direct employees.

Taylor warns that disputes in these sort of situations tend to take longer, as the negotiations have to include more people. He advises that in this situation it is better to give employees a good communications channel, in order to deal with potential conflict early on.

Resolving disputes earlier

According to Taylor, Acas’s main focus over the course of the next year will be on preparing to introduce its Early Conciliation service in April 2014.

The introduction of Early Conciliation (EC) was announced by the Government in November 2011 as the first step in its move to simplify and streamline the employment tribunal process.

Under EC, it will be mandatory for employees intending to lodge an employment tribunal claim to contact Acas with details of their claim before proceeding to the tribunal. Acas will then offer both parties the opportunity to resolve the dispute through EC rather than resorting to a tribunal. However, neither party will be obliged to agree to the conciliation.

In 2012, Acas’s voluntary Pre Claim Conciliation service helped to resolve over 21,000 workplace disputes without the need to go to a tribunal. Taylor believes that the introduction of EC will allow the organisation to help even more people resolve their disputes early.

“At Acas our advice is always that it is better to resolve disputes at the earliest possible stage, ideally in the workplace itself,” he said.