EurWORK European Observatory of Working Life

British American Tobacco, Cyprus: Redeployment

About

Case study name: 
Ageing workforce
Organisation Size: 
Small
Sectors: 
Food beverage and tobacco
Target Groups: 
Unskilled Manual
Initiative Types: 
Changing attitudesExit PolicyRedeployment
Scope: 
All

 

Organisational background

 

British American Tobacco (BAT) emphasises non-discrimination in its company policy. Its need for downsizing was achieved by giving support to older workers in redeployment.

BAT, part of a global enterprise, is a well-established company in Cyprus, where for many years it had a manufacturing unit as well as a distribution network. In 2006, it closed its factory and halved the number of staff. It put social plans in place to ensure that these employees, many of whom were older workers on account of the age of the company, obtained other work where possible. It cooperated with the Employers' Federation to help find job placements, while also providing good redundancy packages, career advice, financial advice, psychological support and retraining. It employed a special outplacement/recruitment agency to provide this support.

Further redundancies are planned in 2007 in order to strengthen the company, with the remodelling and centralisation of its marketing and distribution sections. The company’s generous redundancy payments and support means that half of the current employees have volunteered to be on the list for the next round of downsizing.

BAT’s personnel policy is strictly against age discrimination. It now employs 84 people, 16 of whom are women. About 30 employees have a university-level education and 16 employees are over 50 years of age. The company has good relations with the two major trade unions and debated the redundancy and outplacement packages with them. There is a low staff turnover, with people only leaving (other than under redundancy conditions) to go to what is considered an 'even better employer', such as the civil service, or for personal reasons. People rarely leave to get better wages elsewhere.

Good practice today

BAT has a well-developed and explicit set of HR practices and policies, which are distributed to all employees. Internally, it applies the UK-style position, now EU law, on non-discrimination on the basis of age. Thus, in recruiting staff, no mention is made of age at all, not even as additional information, since this is illegal and inappropriate. The company’s job advertisements state what experience and skills are needed, while vacancy specification templates do not ask for age. Staff development occurs through talent review meetings, mainly affecting those in management but also others who show potential. Again, explicit materials are distributed to all those participating on age discrimination.

BAT also implements its global policy on 'Dignity and Respect at Work', which covers age-related issues. This involves cultivating positive attitudes and creating a different organisational culture. Attitudes are the key to the positive employment of older workers in the labour force, rather than dealing with age itself. Considerable work is done by the HR managers to correct ageist attitudes, not infrequent, even among the managers themselves. Thus, in talent reviews undertaken by managers on employees’ promotion and career development, the issue of the age of the employee has been removed. Discussions concerning age are avoided and any documentation used to back up talent review discussions do not include any age references. Eligibility for promotion opportunities is not dependant on age-related criteria, but is based rather on the skills and personal attributes required to do the job. The HR manager safeguards these principles during the talent review meeting and similar discussions; in order to increase awareness among senior management locally, a specific document, entitled 'Talent Review — Age Discrimination Paper', has been distributed for reference.

Unionised employees work under collective agreements that provide wage increases in line with years of service. In market terms, these cost a lot, so to a certain degree the company pays over the average for wages. A practice, rather than a policy, is to give employees long-service awards, after 15, 25 and 35 years of service (e.g. a gold-plated watch).

In 2006, the company employed 200 people. But this number was halved through the closure of the factory, where many older workers were employed. All 97 employees in the factory were made redundant, of whom 3-4 were managerial personnel and another 3-4 were supervisory-level staff. The company decided to put social redeployment plans in place to ensure that employees could be helped into new jobs as far as possible. A Greek consultancy company was used for this purpose. It worked on site with the employees for two months, coaching them on how to develop personal employment strategies so they would know what to do even when the direct support period of six months ended. The consultants used group discussions and individual interviews, teaching people how best to prepare CVs and finding out which employees wanted to be retrained. At the same time, BAT received considerable help and support from the Employers' Federation in trying to locate other employers who would be interested in hiring those who were to become redundant.

Many of the employees affected preferred to remain unemployed on unemployment benefits for six months. In reality, the company pays more than the market rate, so it was difficult for the ex-employees to adjust to the outside labour market, especially since the majority of them were unskilled labourers. Those with skills, and a handful of managers, immediately found work, including those aged 40-50, some through the Employers' Federation. For those who were over 50, the redundancy package enabled them to stop looking for work, while many just did not want to go straight into another job. Some older workers established their own micro or family businesses; others remained unwilling to go into other factory work, while still others joined existing family enterprises.

BAT conducted a follow-up in 2006 after the programme to see what 72 ex-employees were doing: 4 had retired; 18 had found other work, of which 7 were self-employed or in family enterprises; 9 were going to interviews; 3 were not working for medical reasons; and the remainder were not going to look for work until after Easter. There was another follow-up six months later, in October 2006. This process was satisfactory for the ex-employees, who reported that they felt that BAT really cared what happened to them.

Although initially despondent, many of the older workers were unwilling to go back into other factory work with other practices, such as shift work. Several innovations were tried, including retraining in, for example, information technology, fork-lift truck driving and even in cooking (so that someone could work in a bakery). The company provided advice on what the ex-employees could do with their redundancy money, bringing in a banker to give investment advice. The amounts given in redundancy were substantial for those who had been with the company for some years, mostly older workers, giving them the opportunity to invest in land or start their own businesses. Some older ex-workers of BAT are now providing services to the company itself (e.g. catering, messenger service, gardening, electrical services).

The future reduction of a further 22 staff will not be so shocking, given that people often want the capital sum and the freedom to make other new employment choices. Again, the redundancies will not be done on an age basis, but primarily on performance and on willingness to leave, especially among those where the downsizing is considered necessary, specifically the sales representatives, who are mainly male white-collar workers with secondary-level education. The issue of gender and recruitment in the sales area has been discussed in the company and steps have been taken to make the filling of such posts non-gender biased.

Recruitment is seen by the company as an expensive process since it involves not just an interview, but organising psychometric tests in assessment centres. The company therefore looks internally before recruiting externally and this system helps to promote those who have experience with the company, including older workers.

The company has good relations with the trade unions, the two largest of which represent two different political parties. With the company’s negotiation, they agreed to appoint one spokesperson, although all the unions can and do bring forward issues. The General Manager, HR Manager and Finance Director are involved in these meetings. Prior to the factory closure, one of the factory mechanics was also the company’s works council representative. Since the factory closed and employee numbers were halved, it was considered unnecessary to have a representative at local level and the works council representative from BAT Hellas will be liaising with the Cyprus Trade Union representatives.

Further information

Contact: Kiki Kalli, Human Resources Manager

E-mail: Kiki_Kalli@bat.com

Website: www.bat.com

 

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