Industrial Relations in Practice is a new series intended for personnel

Transcription

1 MANAGING RELOCATION

2 INDUSTRIAL RELATIONS IN PRACTICE General Editor: Jim Matthewman Industrial Relations in Practice is a new series intended for personnel managers, union negotiators, employees, welfare advisers and lawyers. With an emphasis on current practice in leading British organisations and trade unions, the series takes an overall independent stance, with titles aimed at both sides of industry. The various authors, who have been selected from management, independent research groups and labour organisations, address themselves to topics of immediate and practical concern to the work-force of today and those responsible for its management. Edward Benson A GUIDE TO REDUNDANCY LAW THE LAW OF INDUSTRIAL CONFLICT Gary Bowker DISCRIMINATION AT WORK Alastair Evans and Stephen Palmer NEGOTIATING SHORTER WORKING HOURS Philip James UNDERSTANDING SHOP STEWARDS: Their Role and Legal Rights Susan Johnstone and James Hillage CONTROLLING INDUSTRIAL ACTION David Murray-Bruce PROMOTING EMPLOYEE HEALTH Susan M. Shortland MANAGING RELOCATION Peter Wickens THE NISSAN PROJECT Series Standina Order If you would like to receive future titles in this series as they are published, you can make use of our standing order facility. To place a standing order please contact your bookseller or, in case of difficulty, write to us at the address below with your name and address and the name of the series. Please state with which title you wish to begin your standing order. (If you live outside the UK we may not have the rights for your area, in which case we will forward your order to the publisher concerned.) Standing Order Service, Macmillan Distribution Ud, Houndmills, Basingstoke, Hampshire, RG 21 2XS, England.

3 Managing Relocation Susan M. Shortland M MACMILLAN PRESS

4 Susan M. Shortland 1987 Softcover reprint of the hardcover 1st edition All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright Act 1956 (as amended). Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. First published 1987 Published by THE MACMILLAN PRESS LTD Houndmills, Basingstoke, Hampshire RG21 2XS and London Companies and representatives throughout the world Typeset by Wessex Typesetters (Division of The Eastern Press Ltd) Frome, Somerset British Library Cataloguing in Publication Data Shortland, Susan M. Managing relocation.-(industrial relations in practice) 1. Employees, Relocation of I. Title II. Series '7 HF R47 ISBN DOI / ISBN (ebook)

5 Contents List of Tables Acknowledgements Introduction 1 Employee Attitudes to Relocation Company relocation Mobility Individual employee transfers Individual employee transfers abroad 2 The Relocation of Companies Why relocate? Planning Employees and relocation Communication Allowances Redundancy payments Problems R.S. Components Ltd STC pic American Can (UK) Ltd Blue Circle Industries pic Sun Life Assurance 3 Relocation Allowances Allowances for existing individuals transferred at company request House hunting Temporary accommodation allowances Removals Storage and insurance Travel and hotel costs Special leave School fees/school uniforms Disturbance allowances Factors affecting the level of payments viii lx X v

6 Vl Contents Removal grants 58 VAT returns 59 Taxation 60 When payment is made 61 Bridging loans 62 House purchase schemes 63 Moves from low-cost to high-cost areas 63 Excess mortgage allowance schemes 64 Protection against financial loss 67 High-cost to low-cost moves 68 Right of appeal 69 Clawback of relocation costs 69 Transfer of job but not home 70 Costs of relocation 72 Relocation allowances for new recruits 72 4 Relocation and the Law 77 Contract of employment 77 Imposing new terms 85 Direct, indirect and marriage discrimination 87 List of cases 90 5 International Relocation 92 Why relocate staff abroad? 92 Employee selection 93 Briefing 96 Reasons for failure 105 Compensation and benefits 107 Other benefits 111 Expatriates employed on fixed-term contracts 113 Relocating individual staff to Britain Relocation and Tax 121 Relocation within the UK 121 Moves to high-cost areas 124 International relocation 127 Taxes on individuals 130 British expatriates working abroad 131 Foreign expatriates coming to the UK 133

7 Contents vii 7 Specialist Relocation Companies 137 Why use a specialist? 137 Bridging loans 138 Buying the property 138 Hotels 139 House hunting 140 Using an outside specialist 140 Home-sale programmes within Britain 141 Home search within Britain 145 International relocation 148 Advantages and disadvantages Removals 153 Domestic removals for employees 153 Overseas removals 154 Company moves 159 Appendix 1 Company Relocation Policies 165 Appendix 2 The Relocation Company Contract 194 Appendix 3 Specialist Relocation Companies 200 Appendix 4 Sources of Advice 202 Appendix 5 Regional Aid 210 Bibliography 216 Index 219

8 List of Tables 1.1. Willingness to move by age (1983) Willingness to move by sex (1977 and 1983) Willingness to move by socio-economic group (1977 ~1~) Willingness to move by region (1983) Mobility- current and future jobs (1981) Relocation assistance for staff transferring to Weldon from London, Hertford and Northfield (R.S. Components Ltd) Severance arrangements for staff not transferring to Weldon from London, Hertford and Northfield (R.S. Components Ltd) Home removal allowances and expenses for existing employees at STC Type of assistance provided when employee buys a ~~~~~~00 ~ 3.2. Provision for house hunting Temporary accommodation allowances Level of disturbance allowances Mortgage compensation Relocation assistance for existing and new executives Extra-statutory concession AS Removal expenses not generally taxed Statement of practice 125 viii

9 Acknowledgements I would like to express my thanks to Edward Benson and Anthony Korn of Industrial Relations Services (Chapter 4), Diana Pont of Black Horse Relocation (Chapter 5), Malcolm Gammie, Leonard Spencer and Lois de Lord of KMG Thomson McLintock (Chapter 6), Stuart Mitchell of Black Horse Relocation (Chapter 7), Peter Carter of North American Van Lines (Chapter 8) and Steve Hartley of Merrill Lynch Relocation (Appendix 2). I am also grateful to all the industrial relations' personnel and relocation managers who supplied information and gave up their time to help me in my research for this book and to the management and staff of Industrial Relations Services, Incomes Data Services and AGB Business Publications' Personnel Executive, whose journals provided a valuable source of information. I am especially indebted to my colleague Vicky Hibbert and my father George Shortland for their assistance with the preparation of the text and to my mother Kathleen Shortland for her excellent typing of the manuscript. SusAN M. SHORTLAND ix

10 Introduction Relocation is increasingly becoming a fact of business life. To reduce overheads and improve their competitiveness, many firms are relocating out of highly priced areas - such as central London - into more suitable locations. Moving can provide the opportunity to consolidate business activities carried out in diverse locations. By moving into bigger premises, a business can expand and relocation may aid an organisation's recruitment programme by offering a pleasant environment and cheaper housing for employees. As the pressure to improve efficiency and profits grows, so employers are placing more emphasis on the value of their human resources. Key staff can be asked to move to another part of the country or to go abroad, for instance to head up a subsidiary operation, to train other employees or perhaps to solve particular problems which require their specialist knowledge and skills. To get the best person for the job, employers often have to recruit nationally. As a result, new employees may need to move to take up their appointments. Recognising this, more organisations are offering relocation expenses to recruits. Employers face a number of potential problems when relocating staff. For instance, in the event of a company move, it can be difficult to predict which staff will choose to relocate with their jobs. The allowances given need to be pitched at the right level so that those employees of greatest value to the organisation move with it and a suitable redundancy package (or alternative work if it is available) should be offered to those to be left behind. And, firms transferring individual staff need to make sure that the level of compensation given enables them to make their decision on whether to accept the job in the new area without the worry of financial pressures. Relocation expenses should be agreed with the Inland Revenue so that employees are not taxed on them. Employers will need to pay attention to legal issues too, so as to avoid claims of, for example, redundancy or sex discrimination at an industrial tribunal. Employers will need to supply information to staff about to relocate. Employees - and their families - will want to know details of housing, schooling and general amenities in their new area. They may require counselling as well. Employees who are asked to work X

11 Introduction Xl overseas will need to be thoroughly briefed before departure. They will probably need assistance in finding homes and schools and help with transporting their personal possessions abroad. Managing relocation - be it transferring individual staff within Britain or abroad or moving an entire company to a new site - can be a daunting prospect. Employers in the United States have had the benefit of the Empluyee Relocation Council (ERC) - which acts as a forum and a lobby for those involved in moving employees - for some 22 years. The Washington-based Council has a membership of over including more than 1300 corporate members. Another ERC was set up in Canada a few years ago and it now has about 200 corporate members. The American ERC gives assistance to its members in a number of ways. It provides: - A clearing house for advice and contact with other organisations; - A forum for information exchange; - Information on trends in relocation at home and abroad; -Help with the development of relocation policies; -Conferences, research assistance and publications. The Council represents the collective views of employers on questions of policy and it has achieved significant improvements in the tax treatment of relocation expenses. It has also encouraged a more cohesive response to industry problems and helped with the control of costs. And, as a result of members sharing their ideas, it has promoted a more sophisticated approach to employee relocation. Britain now has the benefit of its own Employee Relocation Council. Stuart Mitchell, the managing director of Black Horse Relocation and a member of the US Council, suggested to the Confederation of British Industry that a British ERC be formed and in the autumn of 1985, a meeting was held in the CBI's London headquarters. It was attended by over 100 company representatives and general agreement was reached that a British equivalent of the American ERC should be set up here. So, in April 1986 the CBI's Employee Relocation Council was launched. The CBI believes that to benefit UK companies an ERC in the UK will have to: - 'Collect information from members about problems and solutions in the field of employee relocation;

12 xii Introduction - 'Provide a directory of employers who relocate employees so that members can share experiences; - 'Publish regular bulletins on developments including relocation trends and housing; - 'Make representations to Government and other agencies on behalf of members of the ERC; - 'Provide an enquiry system to answer or pass on queries to appropriate experts within or outside the CBI.' Membership of the ERC is in two categories: corporate membership (for employers who relocate existing or potential employees); and affiliate membership (for relocation management companies and professional associations providing relocation-related services). To date, relatively little has been written on the practical aspects of relocating staff. This book, which is based on specific research carried out during 1985 and on my findings as a research journalist over the past seven years, aims to provide a source of practical help on various aspects of relocation - from determining staff mobility to dealing with the removal of employees' household effects. However, the subject is broad and certain areas - such as the tax treatment of international personnel - can be minefields where specialist advice will be necessary. However, in any event, relocation requires careful planning and handling so as to cause the minimum amount of disruption to the business and the employees who serve it.