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| How We Operate | ||
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| Employee Relations | ||
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Our relationship with our people and their trade union
representatives is key to business success. It is important
that we treat our employees well and create a strong business
so we can continue to provide employment in the future.
Here John Wall, General Secretary of the Confederation of Shipbuilding and Engineering Unions (CSEU) and Alison Wood, BAE Systems Group Strategic Development Director, give their thoughts on current and future workplace issues for our business. Our response to the issues they raise can be found below*. * This commentary does not imply approval or otherwise for the content of this report. |
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Stakeholder positionA Trade Union view:John Wall General Secretary, Confederation of Shipbuilding and Engineering Unions (CSEU) “Stability and the long-term future of the business are the real issues for employees at BAE Systems. Over the next five years, the introduction of the Defence Industrial Strategy and the Company’s increasing growth in the US will both present significant challenges. Redundancies can’t always be avoided. BAE Systems can reduce redundancies by being fully transparent in their approach and their Company strategy. If management work with unions, compulsory redundancies can often be avoided through retraining, relocation and voluntary redundancy. Chadderton is a good example. Here local management and unions worked together to reduce the workforce and relocate the business within a year without any compulsory redundancies. Training is vital to equip employees with the skills they need to adapt to new roles. Both the Company and unions are responsible for this. Unions must encourage members to take part in training. They must also sit down with companies, see what is on offer for employees and look at how training schemes can be improved. BAE Systems is investing heavily in training and is committed to working with SEMTA, the sector skills council for science, engineering and manufacturing, but this programme is in its infancy. It needs to be developed and given more resources. Good workers are not just those that are white, male, middle-aged – they can be any colour, any gender. We need the multicultural mix and must encourage ethnic minorities to come in. We must blow away completely the myth that manufacturing is a man’s job or that it is about making boys’ toys. Why can’t women get involved? BAE Systems is not yet doing enough in this area. They should make a specific effort to cast their net wider to find more young women and more ethnic minorities. A Company pension is a vitally important part of any good compensation package from any good employer. We have been dealing with BAE Systems on current pension issues for over a year and have now recommended their latest offer to our members as the best which can be realistically achieved given the very difficult circumstances we find ourselves in. If these circumstances improve we will expect this to be reflected by management in future pension negotiations. Partnership between companies and unions works best if the views and values of both sides are as visible as possible. The unions need to recognise that a successful Company is essential to create jobs and the Company needs to recognise that they can only be successful with the full support of the unions. We’ve made a lot of progress since 1990 but still have work to do. I’ve been dealing with this Company since 1976. BAE Systems is hugely important to the economy and people of the UK. Unfortunately that’s not always recognised by the UK at large or UK governments of any political persuasion.” A strategic view: Alison Wood Group Strategic Development Director, BAE Systems “BAE Systems faces several challenges in the next decade relating to employment. The first is the long-term future of our UK business. As we recruit apprentices and young engineers we want to be able to show them that the defence industry offers a stable and rewarding career. This is an agenda we share with the UK Ministry of Defence (MOD). In the US, defence is a fast-growing business – we must ensure that we have the people and the talent to take advantage of this opportunity. As we strive to become a truly multinational company the third issue is finding the right people to expand our business overseas. Restructuring is also a challenge that will continue for at least the next decade; it would be unfair to employees to suggest otherwise. To meet these challenges we must adapt our capabilities to align with customer requirements. This means attracting a highly skilled workforce that can not only design and develop innovative products but also support them in service and sell them into the export market. Training will give employees the new skill sets they need for these changing roles. We must motivate them to seek more training and take personal responsibility for developing their skills. To minimise redundancies we must also work with our supply chain and plan for fluctuations in demand. The new Defence Industrial Strategy will help us do this in the UK. Jobs will also be secured and created if we can increase our exports. There are many other employment issues we need to manage as part of being a responsible employer, for example pensions and employee diversity. Performing well against a successful business strategy will give us the resources we need to meet our pension obligations. Achieving a diverse workforce is not easy given our history as an engineering and defence business, and will take time. National security places constraints on who can work for us which makes ethnic diversity more challenging. Working with the trade unions is important for the Company. A testament to this is the role that the trade unions took in the development of the Defence Industrial Strategy. We need to continue sharing views on what skills and support the workforce needs. We could both do more on reaching out to the supply chain. By working together we can demonstrate that defence is a major contributor to the economy and national security, creating highly skilled and value-added jobs.” Our responseThe success of our business depends on the skills, innovation and contribution of all our employees. We aim to get the best from our employees by treating them with respect, creating a supportive work environment, and providing opportunities for training and development.We employ over 100,000* employees across five continents. Most of our employees are based in the UK, the US, Saudi Arabia and Australia. * Includes share of joint ventures. Our people policies are written into our Operational Framework and define our principles for managing employees across BAE Systems. We are continually working with trade unions and employee representatives to review employment practices. Our people policies cover the following areas: Diversity and inclusion We are committed to equality of opportunity for all employees and to creating a workplace where everyone is treated with respect. Diversity supports our objective to maintain competitive advantage by attracting and retaining a disproportionate share of the world’s most talented people. In 2004, our Executive Committee agreed five diversity and inclusion objectives for 2005 and key actions for achieving these. Our objectives were to:
In 2005 we:
Diversity plans for 2006 Gender will be the key focus for our diversity and inclusion efforts during 2006. We have also set objectives for ethnic diversity and are looking for opportunities to partner with the UK Ministry of Defence (MoD) on diversity issues. These objectives have been agreed with our Executive Committee. During 2006 we will:
We will provide updates on progress against these objectives on our website and in our next report. Training and development BAE Systems invests in the training and development of employees at all levels of the Company. Training helps our people develop their skills and capabilities. It enables us to keep pace with changing technologies and continue to improve our customer service. We have a range of global training programmes including e-learning courses, graduate training programmes, apprenticeships and professional and leadership development. 40,000 e-learning courses were taken in 2005 (equating to 17,000 hours of online training time), compared with 26,000 in 2004. Our Virtual University allows employees and their families to access 3,000 courses, many of which are developed and run in partnership with colleges and universities. We employ over 1,000 apprentices in the UK, of whom 276 joined the Company in 2005. During the year, 148 graduates joined our graduate programme as full time employees and 44 students took part in industrial placements. In 2005,we extended our Performance Centred Leadership (PCL) programme to 5,200 managers. PCL includes a Behavioural Performance Feedback (BPF) tool, through which managers receive feedback from peers, managers and team members. In 2005, 95% of those eligible took part in BPF. BAE Systems is a partner in the marine and aerospace sector groups of the Science, Engineering, Manufacturing Technologies Alliance (SEMTA), a UK Sector Skills Council. Initial research has identified several areas where these sectors would benefit from greater investment in skills training – these include leadership, productivity/business improvement and technical skills. We are advising SEMTA on how to channel the Learning and Skills Council funding to bring maximum benefit. Our Chairman’s Awards recognise BAE Systems employees and industry partners for excellence and innovation. Over 3,000 nominations were received for 2005. Winners included a team from Air Systems which developed a low-cost system to transmit battlefield imagery at high speed and a team from our Customer Solutions & Support business which established an upgrade and maintenance facility to improve the availability of Harrier aircraft to the front line at significantly reduced cost. A team from BAE Systems’ Electronics & Integrated Solutions also won a Gold Award for the development of new labour-saving technology for the production of printed circuit boards and for making sure that it was shared across the Company. Industrial relations Good industrial relationships with employees and their trade unions are strategically important, helping us to remain productive, motivated and competitive. We consult and partner with trade unions to develop our employment policies and to compete for new contracts. In the UK, the Chief Executive meets with senior union representatives twice a year. We also hold quarterly Corporate Consultative Committee meetings for union representatives to meet with senior managers. In 2005, topics discussed at these meetings included pensions, job loss mitigation, diversity, health, safety and environment, lobbying and government relations, apprentice training and education partnerships. Pensions In common with many other Companies, we are addressing significant shortfalls in our UK pension funds due to lower than expected returns on investment and increased life expectancy. We have announced funding shortfalls in our UK pension schemes which will require changes to future service benefits and in some cases contribution increases. We continue to consult or negotiate, where appropriate, with our trade unions, pension representatives and employees to achieve mutually acceptable solutions to the funding shortfalls, with the objective of retaining affordable and sustainable pension schemes for our employees. Redundancies We continue to grow and restructure our business. During 2005 we recruited 8,789 new employees worldwide. Restructuring also led to 1,992 job losses. We work with trade unions in the UK to minimise involuntary job losses. In 2005, 66% of employees who lost their jobs left the Company or changed jobs voluntarily through voluntary redundancy, retraining, re-deployment elsewhere at BAE Systems or early retirement. Redundancy programmes announced late in the year account for a further 21% of potential job losses and work is ongoing to minimise the amount of job losses that have to be achieved through involuntary means. Health and safety Our employees and contractors are exposed to a range of safety risks. At our manufacturing sites these include risks from manual handling, working at height, noise, hand-arm vibration syndrome (HAVS) and respiratory and skin irritation. Employees in officebased jobs are exposed to different types of risks including potential ergonomic issues associated with working with computers. The health and safety of our employees and the communities around our facilities is very important. During 2005, a tragic incident at our Chorley site in the UK resulted in the death of one of our employees. No fatality or injury is acceptable to us. We are rigorously investigating this event internally and working with the authorities to understand and address the causes of this accident. In April 2005, Mike Turner, our Chief Executive, met with the Director General of the UK Health & Safety Executive (HSE), Timothy Walker, to reaffirm the commitment of both organisations to working in partnership to improve our safety performance. A copy of the joint statement can be found on page 31. In 2005 we reduced the overall number of incidents resulting in injuries as well as the number of people that are exposed to environmental risk or occupational health hazards. We have a health and safety team and management system within each business to identify, manage and control risks, and to ensure that employees understand health and safety risks and how to reduce them. Targets are set for each business unit to monitor and reduce the number of accidents, injuries and work-related diseases. Additional safety processes, risk assessments and emergency plans are in place for our sites in the UK and the US that handle explosives. In 2005, the senior director for each of our Business Units and operating groups agreed a consistent approach to setting and reporting health and safety targets. This will enable us to report our health and safety performance in greater detail in future years. Health and safety improvement targets are now included in the performance objectives for our Chief Executive and other members of the Executive Committee. In the UK we established a Trade Union Communication and Information Forum to strengthen our relationship with trade union health and safety representatives. In 2005, the Environment, Safety & Health Council for our North American operations was formally given a higher profile at the most senior level. We also recognise that the line managers play a key role in ensuring that high safety standards are maintained in our sites. Accordingly, in the UK our Manufacturing Council has accepted responsibility for improving health and safety through operational and line management across the business. |
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