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Would your SME benefit from abolishing job titles?

3rd October, 2014

It has been suggested in the national media that removing job titles from SME’s will encourage a better quality of employee by promoting freedom and flexibility within the workplace.

The theory is that by removing competitiveness within the workplace, the SME employees can focus on working together to compete against their business rivals.

It is stated that one problem with job titles is that “employees within a company compete against each other for promotion or job titles or perceived importance.” However, without competiveness within the workplace, many workers, particularly those who are competitive, may not strive to better themselves in order to progress their career.

The firm referred to in the report employs 101 members of staff, none of whom have job titles. It obviously works for this particular firm, but it would have been beneficial to know how that firm deals with grievances and disciplinary without a hierarchy.

I would advise that employers who wish to adopt this interesting approach to running an SME seek legal advice in advance. Section 1 of the Employment Rights Act 1996 (“the Act”) stipulates that certain information must be given to the employee before or within 2 months of their employment commencing. Specifically, Section 1 (4) (f) of the Act provides that the employee must be given a job title or description of the work for which they are employed. Failure to give the information in Section 1 of the Act can result in the employee being awarded up to 4 weeks pay in compensation by an Employment Tribunal.

Additionally, an employer should carefully consider the impact imposing this structure would have upon current employees. Practically, would current employees (particularly those with more authority) accept such a change to the terms of their contract of employment? As employers, we should ensure that correct procedures are followed when changing employment terms and conditions in order to avoid claims from employees to an Employment Tribunal. We would advise that prior to changing any employees’ terms and conditions of employment, the employer should seek expert legal advice.

For further information and advice in relation to information which must be given to employees and changing an employees terms and conditions, please contact Paul Bennett on 01743 453 685 or send an email to [email protected]

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