Comment: Hobson’s Choice

Back in the days when HR policies were all too often roughly thrown together in paper form, I recall an employee coming in from the shop floor of a factory I managed and pointing to a clause somewhere in the midst of the tome he was carrying, indicating that he could get paid time off for health and safety training. I pointed out that this was a benefit reserved for the plant’s health and safety officer – but then realised that, due to a printing error, everyone could claim the time off.

Digitisation of HR policies has allowed them now to sit on intranets and be viewed, reviewed, and revised online. But how regularly does a review actually happen and what triggers it? Do companies with scattered workforces across national borders have comprehensive policies where their staff numbers in each country are in single figures?

There are a number of services in the USA that offer online employee handbooks that are automatically updated on a state-by-state basis, but elsewhere in the world such a facility is unknown. In common law, jurisdictions like the UK and USA HR policies published separately from an employment contract are not automatically part of it. But this is not the case, for instance, in Germany where policies are automatically integral to the contract. For this reason, the wording of all documents needs to be very precise and a clause stating that an employer may change a policy without consultation at any time will probably lead a judge to invalidate the policy altogether. Moreover, all kinds of other binding influences can be brought to bear – like factory rules, collective agreements, and court precedents. In fact, a statement of company principles transferred innocently from a US HR policy to a German employee handbook can suddenly extend employee rights in ways that the employer had not intended.

Some companies have chosen to avoid the difficulties of constant updating to comply with legal changes by just stating in employment contracts and HR policies that the company automatically complies with all statutory requirements – without specifying what they are. This produces a two-fold problem.

All managers still need to know what legal rights and obligations actually exist in order to apply them. Avoiding any mention of them only increases the chances that a wrong decision will be made based on ignorance of the law.

Moreover, a company’s rules and policies cannot just be confined by statutory requirements – especially in common-law jurisdictions and where collective agreements are the norm. In France, 95% of employees are covered by a collective agreement – at least at sectoral level. In fact, there are a special set of principles established by jurisprudence to determine which rules apply when laws, collective agreements, and employee contracts clash. Generally speaking, the terms and conditions that are most favourable to the employee generally apply. It has only been fairly recently that a company can enter into a company-wide agreement to vary the sectoral agreement on issues like working time and paid leave. But ever since the introduction of the 35-hour basic working week, senior executives can escape hours restrictions by counting their working time in days and not hours (forfait jours). With so many subjugation clauses, provisos and options, what meaning will general compliance clauses have? A company must take action to place itself in a particular legal situation, otherwise a default statutory position will remain elusive.

There is unfortunately no practical alternative except to operate with fully explicit HR policies and constantly keep them up to date. This is a vast task and the only real option to reduce the burden is to keep policies to a minimum. However, operating without written policies – or only the most essential of them – is no solution either as it will mean that when particular situations arise that are not covered by an employment contract, collective agreement or works rules (where mandatory), a decision will have to be made in a vacuum. In order to remain consistent, the decision and circumstances leading to it will need to be documented and, after a while, the company will end back up with a set of comprehensive HR policies – all heavily qualified by individual circumstances and difficult to reapply. Bring on the really smart AI systems!

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