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It is extremely important for all organisations to record and store data for a number of reasons, one significant reason being to satisfy legal requirements. Government agencies such as HMRC, Department of Work & Pensions and the Health & Safety Executive to name but a few, can demand information from organisations at any time. Pay, tax and employee data needs to be accurately recorded and monitored by HR, in order to ensure employees are being treated fairly and organisations are compliant.
Relevant legislation would include the National Minimum Wage Act 1998 with regard to pay, working hours are restricted under the Working Time regulations and safe working practices and conditions are outlined under the Health & Safety at work Act 1974. Failure to comply with this legislation can lead to errors, accidents, increased absence, breakdown of the psychological contract, poor employee engagement, poor retention rates, a bad corporate reputation and can result in serious financial consequences such as fines, legal action or closure of business in extreme cases.
Another reason that organisations collect HR data is for monitoring levels of employee sickness and absence. According to the CIPD’s 2013 Annual Survey Report on Absence Management, organisations reported employees absent between 6 and 8. 7 days each per annum at an average annual cost to the business of ? 595 per employee due to a lack of resource and productivity.
As can be seen, hours lost due to sickness and absence can cost organisations a huge amount of time and money every year and attendance data collected can be used for Occupational Health investigations or capability reviews with the employee, especially should multiple instances of absence occur or a pattern emerges. Attendance data can also help to spot patterns and trends which can pinpoint other less obvious causes for absence.
Poor line management, workplace bullying, poor motivation, a training need or a welfare issue can often be the cause of recurrent, short term absence and once highlighted, HR can intervene to offer practical support, advice and guidance to both employees and line managers in order to rectify these issues before they escalate further. Organisations store data collected in two ways. Before the technology boom in the late nineties, manual files (that are written or printed) were widely used but are now less popular, specially in large organisations that are heavily reliant upon technology.
The benefits of manual files are that they are cheap to compile with little or no training required to extract information from them. However the downside being they take a large amount of space to store, they have little or no security and if they are destroyed or damaged, the information is permanently lost. Electronic storage on computer hard drives, shared drives, memory sticks, internet, intranet, dvd and so on is now the preferred method due to the many benefits.
It is easier to input and update information on a computer, the information can be quickly distributed to a vast amount of recipients via email, can be easily manipulated and formatted for reporting purposes in various applications, doesn’t take up any physical office space and can be secured and protected via encryption programmes or passwords. Of course, data can be highly sensitive, confidential and valuable and therefore it is crucial organisations are responsible and compliant when collecting, storing and using this information.
There are many pieces of legislation that relate to this such as Limitation Act 1980, The Data Protection Act 1998, Human Rights Act 1998, Regulation of Investigatory Powers Act 2000, Freedom of Information Act 2000, Anti-Terrorism, Crime and Security Act 2001 Part 11, Information and Consultation of Employees Regulations 2004, the Immigration, Asylum and Nationality Act 2006 and the UK Borders Act 2007. Two pieces of legislation in particular which are relevant to the everyday uses of HR data within organisations are the Data Protection Act 1998 (DPA) and Freedom of Information Act 2000 (FOIA).
The DPA states that the processing of automated and manual data must comply with seven principles; the data must be used fairly and lawfully, used for limited, specifically stated purposes, used in a way that is relevant and not excessive, must be accurate and up to date, kept no longer than necessary, handled according to data protection rights, kept safe & secure and must not be transferred outside the UK without adequate protection.
There are guidelines produced by the Information Commissioner detailing the best practice for handling data and maintaining compliance in four areas; Recruitment & Selection, Employment records, Monitoring at work and Information about workers health. Subject to certain exceptions (as detailed in Schedule 7 of the Data Protection Act 1998) employees have the right to access their records and also employers must seek the permission of he individual concerned before releasing any information to a 3rd party. Under the DPA, employers must keep certain data for specific statutory periods of time and once this has expired destruction of data must take place securely and effectively. The FOIA 2000 relates only to information gathered, stored and used in the Public sector (NHS, Government departments, Local Authorities, Police forces etc) and information held in the private sector on behalf of public organisations.
It aims to improve accountability and provide transparency within organisations that spend public money. This gives the public the right to access all information including emails, documents, letters and notes, without any relation to themselves and without needing to provide a reason. The request can be denied only if it contravenes the Data Protection Act, harms national security or is not in the ‘public interest’ but even then a refusal has to be valid, reasonable, explained and an edited version released.
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