How Will the Apprenticeship Levy Affect Employers?

The apprenticeship levy, which the Government hopes will help create three million new apprentices by 2020, is due to come into force in 2017, with a view to creating millions of apprenticeships across the UK. The levy is expected to raise an estimated £3 billion by the end of this Parliament.

If your business has an annual payroll cost of less than £3 million, then you will not be required to pay the levy. If you have more than this, however, there will be a 0.5% tax on your payroll bill, which will be paid through PAYE.

The Government estimates that approximately 22,000 organisations will be required to pay the levy. Many smaller employers will be impacted as well as the large companies, as a workforce of 100 people and an average salary of just over £30,000 will take businesses over the threshold.

Employers that do not pay the levy will still be able to access government support for apprenticeships through the Digital Apprenticeship Service (DAS). Employers in England that pay the levy and provide apprenticeship training will receive a ‘top-up’ to a digital account. The training must be provided through an accredited provider and, at this point, it is presumed that HRMC will be responsible for enforcing the payment from the employer and ensuring payment to the training provider.

Some employers have voiced concerns over how funding will be distributed, as each course will need different periods of training time and different evaluation methods. For example, an apprenticeship in engineering may need 12 months, while some apprenticeships in sectors such as retail may need less time.

Potentially, it will be difficult to make a one-size-fits-all scheme translate into meaningful and empowering apprenticeships that benefit both employer and employee.

How Can You Use the Apprenticeship Levy?

Consider the areas in your business where training is most needed, to ensure that the apprenticeship levy works in favour of your organisation. It is possible that many employers will not recoup the levy that they pay, and will therefore simply see it as another employment tax.

What Should Employers Do to Prepare?

One of the key parts of preparation for employers is ensuring that you have the financial capability to pay the levy.

Start to think more broadly than the immediate view of an ‘apprenticeship’ as something for young starters. Consider what training your business has put off because of the possible cost, and ascertain what could be done as an apprenticeship so that you can get the best value.

If you’re not sure how best to prepare for the Apprenticeship Levy, or you’d like some advice taking on an apprentice, contact us by calling 0118 940 3032 or emailing sueferguson@optionshr.co.uk.

Top Five Employment Law Cases in 2016 (So Far!)

Here are the top five employment law cases of 2016 so far, some of which have fairly far reaching implications.

Commission and holiday pay – Lock and another v British Gas Trading Ltd (No.2) (EAT)

This Employment Appeal Tribunal (EAT) agreed with the employment tribunal that the Working Time Regulations 1998 can be interpreted to require employers to include a worker’s commission payments in the calculation of his or her holiday pay.

The case went to the Court of Appeal and was heard on 11 July 2016. The Court of Appeal judgment is awaited.

Childcare vouchers during maternity leave – Peninsula Business Services Ltd v Donaldson (EAT)

HM Revenue & Customs (HMRC) advice has traditionally been that it is unlawful for an employer to make the suspension of childcare vouchers scheme membership during maternity leave a prerequisite of joining.

Official HMRC guidance stated that “non-cash benefits, such as childcare vouchers that can be used only by the employee and are not transferable…must continue to be provided during ordinary maternity leave and additional maternity leave”.

Peninsula’s childcare vouchers scheme was the subject of a legal challenge because its scheme requires employees to agree to suspend their membership during maternity leave.

An employment tribunal decision that Peninsula’s childcare vouchers scheme was discriminatory was overturned by the EAT. The EAT found that employers that make deductions from an employee’s salary in return for childcare vouchers do not have to continue to provide the vouchers during maternity leave.

Monitoring employees’ social media – Barbulescu v Romania (ECHR)

In this Romanian case, the European Court of Human Rights (ECHR) examined the scope of employees’ right to a private life in relation to social media activity.

An engineer who was dismissed for using Yahoo Messenger to chat with his family, as well as professional contacts, challenged his employer’s actions as a breach of the European Convention on Human Rights.

However, the ECHR held that the employer’s actions were justified because it was seeking to verify that the employee was using his work computer and social media account for work purposes only.

This case will now go to the ECHR’s Grand Chamber. The hearing is scheduled to take place on 30 November 2016.

Misconduct dismissal for “pulling a sickie” – Metroline West Ltd v Ajaj (EAT)

The EAT affirmed that an employee who makes up, or exaggerates the effects of, an injury or illness to take fraudulent sick leave is fundamentally breaching the implied term of trust and confidence and can be dismissed for misconduct.

This case reiterates for employers that “pulling a sickie” is a misconduct, rather than a capability, issue. This means that a dismissal for fraudulent sick leave must be based on reasonable grounds, following a reasonable investigation.

Reasonable adjustments for disabled people – Carreras v United First Partners Research (EAT)

When considering the duty to make reasonable adjustments, employers need to pay particular attention to disabled workers’ hours of work.

In this case, the disabled employee believed that he was disadvantaged because there was an expectation in his workplace that employees work late, even though there was no strict requirement to do so.

In upholding the reasonable adjustments claim, the EAT held that working late does not have to be presented as an instruction to cause a disadvantage.

In practice, workplaces can put pressure on employees to conform, even if there is no written rule or direct management instruction.

If you think any of these issues could affect your business, do get in touch with us. Call us on 0118 940 3032 or email sueferguson@optionshr.co.uk.

On 18 October 2016 we’ll be running our next Employment Law Update workshop, to bring you right up to speed on any changes that might affect your business. You can book your place online here.

 

Source: XpertHR

What Impact Will Brexit Have on Employment Law?

Although much UK employment law is derived from EU law, the UK’s withdrawal from the EU is unlikely in itself to have an immediate impact on employment law as most EU Directives are implemented in the UK by regulations or Acts of Parliament. It will be for Parliament to decide whether to retain, amend or repeal domestic legislation.

It is possible that the UK will be required to continue to implement elements of EU legislation as a condition of a negotiated trade deal between the UK and EU.

Many areas of domestic law that are derived from EU law have been heavily influenced by decisions of the European Court of Justice (ECJ), for example working time, TUPE and discrimination law. ECJ decisions will continue to apply in the UK until the Government or the UK courts determine otherwise.

What impact will Brexit have on EU nationals currently working in the UK?

It is not yet known what rules on immigration and free movement of people will be in place following the UK’s withdrawal from the EU. However, employers can reassure employees who are EU nationals that there will be no immediate change in their right to live and work in the UK. The same is true of nationals of the other countries of the European Economic Area (EEA) (Iceland, Norway and Liechtenstein) and of Switzerland.

EEA and Swiss nationals who have lived in the UK for five years or more as a “qualified person” have acquired the right to permanent residence. A qualified person is someone who is working, studying, self-employed, self-sufficient or looking for work. A person who has qualified for permanent residence can apply for a document certifying this.

The UK will have a period of up to two years within which to negotiate the terms of its withdrawal. The rights of EU nationals to come to the UK to live and work in the future will be a key element of the negotiations. It is likely that EU nationals who are already living in the UK will be afforded special status, with reciprocal arrangements for UK nationals living in EU countries.

One option for an immigration framework, in the absence of a negotiated deal allowing freedom of movement between the UK and the EU, is that the current points-based system that applies to workers from countries outside of the EEA could be extended to EEA nationals. For most employers, the main route for employing foreign workers under this system is by sponsoring skilled workers, where they can show that there is a shortage of suitably qualified applicants within the resident labour market. There is scope for a points-based system to be extended to allow the employment of non-skilled workers as well as skilled workers.

On 18 October 2016 we’ll be running our next Employment Law Update workshop, to bring you right up to speed on any changes that might affect your business. You can book your place online here.

 

Information Source: XpertHR

How Do You Deal with Poor Staff Performance?

What do you do when you first think that one of your members of staff isn’t doing as well as you would like them to?

Whatever you do, don’t ignore it and just hope that the situation will improve!

For some tips on how to deal with the early stages of poor performance, watch this short video.

If you still have any questions about how to help your staff to perform better, or you have a more difficult situation to deal with, call us 0118 940 3032 or email sueferguson@optionshr.co.uk for some confidential advice.

The Latest Legal Changes to Employment

Every year around April and October, changes are made to Employment Law that will affect some, if not all of your employees. In April we ran one of our popular Employment Law update workshops, to tell our clients and contacts what they need to know. If you missed it, here’s a summary of what we covered.

More changes will be happening later this year, so we’re running our autumn event on 18 October 2016 and we’ll send you a reminder nearer the time. In the meantime, if you have any questions about the latest changes and what you need to do about them, do get in touch.

Here are some of the issues we discussed at the recent workshop:

Statutory Rates – these usually change, but this year, statutory family-related pay and sick pay rates were frozen.

Postponing a Tribunal – under rule 30A of the Employment Tribunals Regulations 2013 for proceedings presented on or after 6 April 2016, changes have been made, in order to limit the number of postponements and adjournments that can be granted in a single case in the employment tribunal and introduce a deadline after which applications for a postponement will not be allowed. Employment tribunals must also consider making an award for costs where postponements are granted at late notice.

National Living Wage – this applies to all employees over 25 years of age. The new rate from 1 April 2016 is £7.20 per hour, and is expected to increase to £9 per hour from April 2020. Also from 1 April 2016, the penalty was set at 200% for the total underpayment, for each employee who has been underpaid. 300,000 employees will benefit from this increase, with employers needing to find an estimated £3 billion by 2020. The Government intends to align when the national minimum wage and national living wage rates are amended, to be April for both with effect from April 2017. It has asked the Low Pay Commission to recommend the rate of the national living wage and the national minimum wage for April 2017 and to provide an indicative rate of the national living wage for April 2018. The Commission is due to report back on its findings in October 2016.

Zero Hours Contracts – legislation came into force on 11 January 2016, which states that individuals on a zero hours’ contract must not be unfairly dismissed or subjected to a detriment for breaching an exclusivity clause.

National Insurance for under 25s – employer NICs have been abolished for apprentices under the age of 25. As part of the Government’s drive to encourage employers to create more apprenticeships for young people, from 6 April 2016, employers will not pay employer national insurance contributions for apprentices aged under 25.

New State Pension – a single-tier state pension was introduced on 6 April 2016, replacing the previous basic state pension and additional state pension. Employer-provided pension schemes will no longer be able to contract out of the state pension and receive a national insurance rebate. This means that, where an employer provides a previously contracted-out scheme, its employer and employee national insurance contribution liability will increase. Employers should ensure that employees are aware that there may be an impact on their pay.

The Gender Pay Gap – these new regulations will apply from 1 October 2016, for all private-sector and voluntary-sector employers with 250+ employees. Companies will be required to publish the gender pay gap as it is in the pay period in which 30 April 2017 falls.

If you think that your company and your employees will be affected by any of these changes, please do get in touch for a confidential chat. Call 0118 940 3032 or email sueferguson@optionshr.co.uk.

Staff Accuse B&Q of Using the National Living Wage as an ‘Excuse’ to Cut Pay and Benefits

Employers are being warned to avoid kneejerk moves when introducing measures to offset increased wage costs.

A petition drafted by a B&Q manager, accusing the DIY retailer of slashing employee benefits in an effort to offset the costs of the national living wage (NLW), has so far attracted more than 120,000 signatures. As an employer you could face a similar negative reaction if you attempt to alter terms and conditions as a result of the law to increase salaries for your lowest paid staff. The £7.20 an hour wage came into force on Friday 1 April.

As part of the change, the B&Q employees say that the retailer has suggested time-and-a-half pay for working Sundays and double time for working bank holidays; a restructuring of allowances for employees working in parts of the UK where the cost of living is higher; and the removal of a summer and winter bonus, which equates to 6% of annual salary.

The petition says that B&Q staff are required to accept the new terms and conditions of employment, or face losing their job.

“Big businesses like B&Q are using the NLW as an excuse to cut overall pay and rewards for the people who need it the most,” the petition reads.

B&Q denies that the changes to terms and conditions are as a result of the NLW, stating that a review of its pay and reward framework was launched “long before” the new wage was announced.

A B&Q spokesman said: “Our aim is to reward all of our people fairly so that employees who are doing the same job receive the same pay. That isn’t the case at the moment, as some have been benefitting from allowances for a long time when others have not, and that can’t continue.”

A survey from the Federation of Small Business found that 54% of SMEs believe they have been negatively impacted by the 50p an hour increase in pay, and will put off hiring new staff as a result. 41% will cut staff hours, while 26% plan to erode pay differentials by freezing or cutting the wages of higher paid staff.

According to analysis by the FT, employers are actively are actively considering increasing the number of self-employed individuals or apprentices – all of whom are exempt from the NLW – in their staffing mix.

But Esther Smith, employment partner at UK law firm TLT, warned that this could leave employers open to discrimination claims.

“Employers may, consciously or unconsciously, look to employ younger people to avoid the higher wage costs.  Also, if they operate zero hours’ contracts, they may elect to offer less work to those people over 25,” she said. “Both of these actions would expose the employer to age discrimination claims.”

Before you make any major decisions which could affect your business and your employees, get in touch by contacting us on 0118 940 3032 or emailing sueferguson@optionshr.co.uk.

Shared Parental Leave Take-Up Could Be 30%

Two surveys published to mark the anniversary of the introduction of shared parental leave suggest that its take-up could be around 30%, although more in-depth research is needed.

Widespread reporting that the take-up of shared parental leave was just 1% has demonstrated much of the media’s appetite for an extreme headline, but may also have hidden much higher take-up than anticipated.

Shared parental leave became available for parents of babies born on or after 5 April 2015. It allows working parents to share leave and pay, provided they qualify.

Research from My Family Care and the Women’s Business council suggested that 1% of men in the organisations surveyed – not 1% of fathers as was widely reported – had taken up the opportunity of shared parental leave.

The combined survey of more than 1,000 individuals and 200 HR directors found that opting to take shared parental leave was deeply dependant on individual circumstances, particularly on their financial situations and levels of pay on offer from employers.

The 1% figure was based on data from 200 HR directors about their organisations’ employees and was given as a proportion of all men employed, not a percentage of fathers eligible to take shared parental leave.

Of the 1,000 employees surveyed, 10% had had a baby or adopted a child in the past 12 months. Of this group, 24% of women and 30% of men said they had taken shared parental leave.

While the subset is small, another piece of research by Totaljobs among 628 respondents revealed similar findings.

Out of its 86 respondents that had a child in the past year, 31% said they are using or had used their right to shared parental leave; 48% did not use their right; and 21% said they were not eligible.

With sample sizes of new parents so low though, experts warned that it is difficult to place too much confidence in the data, although the fact the two surveys had similar figures for take-up among fathers was encouraging.

Mark Crail, content director at XpertHR, said: “If the 30% figures are correct then take-up has been higher than expected – it’s good news, not the shock-horror story that much of the media has been running about these research findings.

“The problem is, many employers simply will not know whether or not men are eligible for shared parental leave unless and until they apply. If someone’s partner has a baby and they choose not to tell their employer, they won’t show up in the records. That makes it extremely difficult to get a good overview of what’s really happening. The research should be taken with a pinch of salt.”

The two surveys also appeared to tally when respondents answered questions around what might stop parents taking advantage of shared parental leave.

In the Totaljobs research, most (85%) of those surveyed said families could not afford to take advantage of shared parental leave; 81% feared there would be an impact on their career; and 78% said that lack of awareness was a factor.

Nearly three-fifths of women (58%) and slightly fewer men (53%) said mothers preferring to be the main carer was a factor in not taking advantage of shared parental leave.

In My Family Care’s research, a factor why respondents – both mothers and fathers – had chosen not to take up shared parental leave was financial affordability, with 55% citing this as the main reason. Nearly half (47%) said it was because their partners did not want to share the leave, while a lack of awareness about the options was cited by 46% of respondents.

Of the 200 employers questioned, the majority said they enhanced maternity pay (77%) and paternity pay (65%), but just under half (47%) enhanced shared parental pay.  The same number offered statutory benefits only.

An impact assessment by the Government on the introduction of shared parental leave also assumed that take up would be low (between 2% and 8%) reflecting the minimal take-up of additional paternity leave, which was introduced in 2011.

Reporting the Gender Pay and Gender Bonus Gap Data

The draft Equality Act 2010 (Gender Pay Gap Information) Regulations 2016 require employers, with more than 250 employees, to publish their first gender pay gap report by 30 April 2018, giving you up to 12 months from the pay period covered by the report to do this. The report must appear on your website, in English, in a manner that is accessible to all your employees and to the public. Once published it must remain there for at least three years.

Employers will have to publish the results, but not the raw data on which the calculations are based, for each of the benchmarks set out below:

  • The mean gender pay gap
  • The median gender pay gap
  • The mean bonus pay gap
  • The proportion of men and women receiving a bonus payment and
  • The number of men and women in each of the four pay bands.

Your report will have to include a written statement confirming that the information is accurate. This must be signed by a director, partner or member of your organisation’s governing body.

As an employer you will also be expected to upload the information to a government website, where the intention is to create a publicly available league table or database.

There will be no legal obligation on you to publish any form of commentary on the figures or to set out any actions that it may be taking to address the gender pay gap. However, ministers have made clear that the Government will strongly encourage you to do so.

You should be particularly aware of the potential damage to your reputation, especially among potential future employees, of failing to set the data in context or to provide an explanation. Where you can report a gender pay gap that is narrower than that generally seen in the wider economy, and/or within its industry, this could enhance your organisation in the eyes of both job applicants and existing employees. However, you cannot assume that a job applicant will automatically be aware that your gender pay gap is better than average. This needs to be spelled out.

If your company’s gender pay gap is wider that the average, additional explanation will help to protect your reputation. Is the gap wide because of the industry in which you operate or the types of roles that exist within it?  For example, women make up only 14.4% of all employees in science and technology occupations and represented just 15% of undergraduate entrants to engineering and technology courses in 2014/15. Employers with a large number of well-paid roles in these areas may struggle to recruit women to them.

Additionally, you may wish to use the opportunity to set out what you are doing to ensure that you recruit, develop, reward and promote women as well as men. This is particularly important if there are few mitigation factors to explain a wide pay gap within your organisation.

Need help with writing your first gender pay gap report? Get in touch to find out how we can help by contacting us on 0118 940 3032 or emailing sueferguson@optionshr.co.uk.

One in Five Employees ‘Regularly’ Uses Drugs

One in five UK employees admits to regularly taking drugs, and a third suspect that a colleague may have a drug problem, according to new research that suggests the increase in the use of illegal substances may be starting to make itself felt in the workplace.

The study of 500 employers, from Crossland Employment Solicitors, found that just two in five firms (40%) have a drugs policy, and only 23 per cent have tested their staff for drug use.

However employers must have ‘good reason’ to justify testing their employees for drug use. Because of the intrusive nature of drug testing, you must have a good reason to justify a policy of testing staff, and should always consider whether there is a less intrusive means of monitoring employees.

As an employer you also need to exercise caution when dealing with employees who they suspect of using drugs. It is vital that you have a ‘sensible’ drug misuse policy in place. Under the Health and Safety at Work Act 1974, employers have a duty to ensure a safe place of work for their staff. With respect to substance misuse, this should include having clear rules about coming to work under the influence of alcohol or drugs, and about drinking alcohol or taking drugs while at work.

The Crossland figures are higher than official estimates of drug use. A Home Office survey in 2015 found that 19.4% of 15 to 24-year-olds had taken an illegal substance over the previous 12 months, and 7.6% had used a Class A drug. The Global Drugs Survey 2015 found that 31% of the UK population as a whole had used drugs at least once.

According to Crossland’s survey, 45% of employees who use drugs feel it has affected their work performance. A similar proportion (46%) say they are aware of potential disciplinary action for substance abuse, but another 35% are unsure of the exact grounds and consequences of their actions.

In view of your Health and Safety obligations, as an employer you are able to take action to deal with employees who use drugs outside of work in certain circumstances. If you need any advice on this issue, or dealing with your own employees, please contact us on 0118 940 3032 or email sueferguson@optionshr.co.uk.

What Do You Do if an Employee Appeals Your Decision?

If you’ve had to make a decision about one of your employees and an issue such as their flexible working request or a disciplinary situation, your employee has the right to appeal against your decision.

What do you do next? How should you handle their appeal?

Your employee can appeal against a disciplinary decision on both conduct and performance matters, or any other employment decision, but they must do so in writing. They need to set out the grounds for their appeal within the number of days set out in your own policy, of you giving them your decision.

You should then hear their appeal without delay. Where possible this should be done by a manager, preferably more senior and not previously involved in the case. This is not always possible in a smaller business, so the same manager or owner may have to hear the appeal, and they must be objective. At this meeting you need to hear what your employee has to say, and consider it against all the facts. You may need to carry out further investigations in order to reach your conclusion, before making your final decision.

Following the meeting, you should write to your employee to tell them the outcome of the appeal, and how the decision was reached. Examples of all the letters for all stages of the formal disciplinary process are available from the Disciplining staff section of the Acas website.

Whatever decision is made regarding the appeal, you must keep a confidential written record of the case.

If you run a small business and need someone impartial to handle appeals, or initial disciplinary meetings for you, do get in touch to talk about how we can do this for you. Call us on 0118 940 3032 or email sueferguson@optionshr.co.uk.