The employee contract (Part 1)

We think it’s fair to say that the relationship between employees and their employer can often feel strained. With the employee feeling overworked and underpaid, while the employer feels frustrated with the standard of work carried out by their employees.

This isn’t anything new, and we doubt it’s ever really going to change all that much either. The fact is that both parties want the biggest return on their investment.

That being said, we do feel that steps can be taken to vastly improve this relationship for both parties. However, to do that, we feel that both sides need to think less about what they have a right to and more about what they have a responsibility for.

Before we go into that, we first want to take a look at the relationship between employee and employer, in what we feel is its most basic form.

When an employee takes a position within a company, they are, in essence, agreeing to perform a set of tasks, for a set duration at a set place for a set amount of money.

In many cases, the reality of this is a bit different in that some people will work remotely or in a hybrid role. There are also things like bonuses and/or commission. Some people are also paid on a per-contract basis; the amount they earn depends upon the work they carry out.

That being said, the basic idea is still the same whether you work in one place or whether you travel for work. Whether you’re paid an hourly rate, a salary or on a per-contract basis.

The employee is still carrying out specific tasks for a length of time to a certain standard for a specific amount of money.

While doing this, they have certain rights and responsibilities, so things that they’re entitled to, and things are required to do. On the other side of this the employer also has certain rights and responsibilities. In many cases things one party has a right to the other has a responsibility to provide.

If we take the employees pay for example, prior to the employee starting their employment, the employer agrees to pay the employee £12.50 per hour; placing them above the UK minimum wage. That means that for every hour of work carried out by the employee, the employer must pay the employee £12.50.

So, the employee has a right to expect that they will be paid on this basis. The employer has a responsibility to make sure that this happens.

What about the other side of the equation? Does the employer not have certain rights as part of this as well? Does the employee not have a responsibility to deliver something in return for this payment?

The simple answer is that the employer has the right to expect that the employee does the job they’re being paid to do, for the length of time required and to the expected standard.

This is as we’ve already established where things start to unravel. Despite what looks like a simple agreement, both parties often have different views on what’s actually required from the other party.

Often the employer will hold the stance that the employee should do what they are told and/or asked to do by the employer as they’re the ones paying employees wages. The employee then counters this with that they aren’t being paid enough for what they’re being asked to do.

If we look at this from a different and hopefully more balanced perspective, while the employer is indeed paying the employees wages. They are doing so using money the employee has earned for the business.

In some instances, this is fairly straightforward, if an employee is involved in sales and marketing activities then their contributions are often fairly easy to work out. You will typically see an increase in brand awareness, sales and revenue.

For employees working in supporting roles, such as HR, Finance, Customer Support and other after-sales services this is often a bit trickier to resolve.

If we take customer services and after-sales services for example, if a company provides a high standard of service, then customers are more likely to make future purchases. They're also more likely to pay for after-sales services such as support and maintenance or additional warranties/insurance. If the company however fails in this, it can and will impact the company’s ability to sell their goods and/or services further down the line.

Now how does this all fit in with the idea of rights and responsibilities? Well, firstly regardless of whatever position a person holds within a company if they do not feel that they are getting what they have a right to then they are less likely to try and produce what they are responsible for.

This often leads to issues where one employee has to deal with the consequences of another employees failings. Which in turn, often leads to them feeling that they’re being expected to pick up other people’s slack. That their reward for doing a better job is to simply be given more work for the same pay.

Which then begs the question why strive for excellence if you’re never going to have the opportunity to rise above those of who are content with mediocrity? In other words, why bother putting the effort in if you’re not going to be rewarded in any meaningful way? Why bother to take the time to keep things nice, neat and orderly if other people are just going to make a mess of everything?

Another way to look at this is that, whenever someone doesn’t do something or doesn’t do it correctly you start to accrue (build) debt. This can take many forms, such as:

• Having to do a deep clean.
• Having to have equipment repaired or taken offline.
• Having to waste time reorganising stock/inventory.
• Having to go through and reorganise files in a cabinet or on a computer or device.

Now some of the above can and will happen regardless of whether some has or hasn’t done their job correctly. The fact is though, is that such issues can arise more frequently if they don’t. Not only that it can also take significantly longer to address said issues.

If we take the second example, if equipment isn’t looked after and properly maintained what’s likely to happen? Chances are it's going to:

• No longer operate the way it should.
• Breakdown completely.
• Become a health and safety hazard.

Then if we take the third, stock and/or inventory items that are stored in a correct place in an organised manner is often easier to locate, they’re also less likely to get damaged. On the opposite side of things, if such items are just thrown on a shelf or in a cupboard, they’re often harder to find. Not only that it often makes it harder to keep track of stock/inventory items, resulting in incorrect stock counts and or/damaged goods.

Once again in many cases, one employee is often left dealing with the consequences of another employees failings; this can also affect the company’s image, as it looks unorganised and inefficient.

In such cases many people often argue that Employee A shouldn’t worry about Employee B doing their job, they should just put their head down, and get on with it. While we’re not opposed to the idea, we do feel that’s not really fair if the action or lack of action on the part of Employee B is impacting Employee A’s work.

If what one employee is doing is detrimental to the work of another is it not the responsibility of the employer to rectify this? Does Employee A not have the right to be frustrated with both Employee B and their employer? After all, they’re both failing to deliver on what they’re responsible for.

Such issues are often at the heart of many employees complaints, so many people are getting paid the same wage regardless of whether they’re doing what they’re supposed to or not.

Another major issue, which often comes from a lack of perspective on the employees part is when they see their employer doing well. By which we mean when they have nice things, such as a big house, a new car and holidays abroad.

Rightly or wrongly people will often take issues with others, if they feel that the gap between where they are and where the other person is, is too wide. Especially if they don’t feel that the other person has earned it.

If their employer turns up to work in their new car later than everyone else, walks in and goes and sits in the office all day it’s often not going to go down well with the workforce.

Ultimately this comes down to perspective or lack thereof, people often don’t see what it took someone to build their business. They don’t see all the extra effort that goes into running a business or the risks that come with it. All some people will see is that their employer was late to work, not that they spent their entire evening doing the work they didn’t get done during the day.

Again, you may wonder how this all ties into the idea of rights and responsibilities. Well, we would argue that employees to a degree have a right to wonder just how well they’re compensated for their efforts relative to the people they work with and or/for.

Time and time again we see reports of the people at the top of a company earning significantly more than the lowest level of employee within the business. In some cases, the top-level employees are earning over 100 to 200 times more than the lowest level.

This may not be true of the majority of businesses, but once again it’s down to perspective people will often operate under the assumption that the person they're working for is “absolutely loaded” or “rolling in it”.

So, if we’re arguing that employees have certain rights, just what responsibilities does the employer have?

Well one could argue that employers have a responsibility to periodically review just how well their employees are compensated for their efforts. Both in relation to, their fellow team members and people higher or lower in the company hierarchy.

Once again, we find ourselves running into the same problem, just what is fair compensation? How much work should someone be expected to do, and to what standard should that work be done to?

Fortunately for us, in the UK, our government has this taken care of in the form of the national minimum and national living wage. Which at the time of writing, according to the government website, is:

• April 2024:
  • 21 and over: £11.44
  • 18 to 21: £8.60
  • Under 18: £6.40
  • Apprentice: £6.40
• April 2025:
  • 21 and over: £12.21
  • 18 to 21: £10.00
  • Under 18: £7.55
  • Apprentice: £7.55

Based on the above an 18 year old can and often will be paid more than a 17 year old, a 21 year old can and often will be paid more than a 20 year old.

Once again, we find ourselves faced with something that is very much down to perspective. On one hand, a younger person will typically have less experience in both work and life in general than someone who’s older. Therefore, it's not unreasonable for them to be paid less.

Though just how much more work/life experience will an 18 year old have over a 17 year old and 21 year old have over a 20 year old? We all grow up and mature at different rates, for one reason or another some people are forced to grow up far sooner than they should ever be expected to.

To add to this younger people are often more excited about starting work as they see this as a way of gaining independence. They’re at that age for the first time where they actually have their own money, outside of celebratory events such as birthdays, not only that they’re not often tied down with the same level of responsibility that comes with living on your own etc.

Now to some extent, this seems to be something that the Living Wage Foundation has tried to address. Looking at their website, they argue that not only should the living wage be higher than what the government has determined. The wage should also be the same across the board regardless of age.

Now we can definitely see an argument for paying less experienced employees a lower rate, though we're not really convinced that age should be such a big factor. Sure, having to pay the younger arguably less experienced generation the same wage might put some employers off from hiring them. Paying them less also opens them up to a higher risk of being exploited as a form of cheap and expendable labour.

If then we’re in favour of paying less experienced employees less money, why then are so many employees still on the same rate of pay they we’re when they passed their probationary period despite working for a company for over 2-3 years?

Sure, you could argue that they’ve had their yearly pay rise in line with the minimum/living wage, but does that really count?

For example, if we take the cost of some basic essentials (bread and milk etc) from one year to the next. In the first year the cost is £10.00, the second year the cost has increased to £11.00.

If we then take an employees rate of pay from one year to the next. In the first year, the employee is paid £10.00 per hour which is then increased to £11.00 per hour.

In real terms would we say that this is an increase in either the cost of goods or the employees wages? The employee can still afford the same essential items by working the same number of hours, so we’re going to say no.

If we take the same example only the cost of the essential items is £11.00, and the employees wage is now £10.50. In real terms has the employee had a pay rise? Well, they’re going to have to work longer to afford those same essentials or they’re going to have to look to a cheaper alternative, so we’re going to say no they haven’t.

In both scenarios, the employees wages have increased, or at least the number in the second year is greater than it was in the first. Yet in neither scenario has the value of the employees time increased, if anything in the second example the employee has basically taken a pay cut as their time is now worth less than it was the previous year.

To us, this highlights an important point, so much of what we've written about is a result of perspective or lack thereof. Like most relationships, so many issues can be resolved by just taking the time the view things from the other persons perspective. Or by taking the time to actually listen to other persons views.

Now this isn’t exactly a new idea, you may have even rolled your eyes while reading that, but the point still stands. While the employer may have a business run, the employees aren't just there to serve the needs of the business. They have their own lives, their own wants and needs etc.

While there’s a lot more we could, and hopefully will, go into around this idea of rights and responsibilities, we’re going to opt to leave it there for now.

Before you go, however, we're going to ask you just one question. Are you as an individual, regardless of where you sit in the company hierarchy honouring your side of the agreement?