The Latest Legal Changes to Employment

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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

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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.

Is Your Business Ready for Ramadan?

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For many Muslims, Ramadan is a period of religious observance, which includes fasting from sunrise to sunset. To help make sure your business is ready, here is a checklist for employers that will help you support any of your employees who observe religious festivals.

  1. Have a policy on religious observance

Your managers should familiarise themselves with your employer’s policy on religious observance during working hours. Making allowances for observance to employees of one religion, but refusing to provide equivalent benefits to employees of a different one, will amount to direct religious discrimination.

Having a policy on religious observance during working hours should have a positive impact on your employees. An absence of such a policy, together with a failure to be supportive towards employees whose religious beliefs require them to observe certain practices, could lead to accusations of religious discrimination.

  1. Show tolerance on reduced productivity levels

It is likely that the productivity of an employee who is fasting will be affected, particularly towards the latter part of the working day. You and your managers should be aware of this and not unduly penalise or criticise an employee whose productivity has suffered because he or she is fasting during a period of religious observance.

  1. Find a way to accommodate annual leave requests

You may experience high demand for holiday requests for a certain period from employees observing religious festivals. The end of Ramadan is marked by the Islamic holiday of Eid, which also signals an end to the fasting period. As an employer, you may, as a result, receive a large number of requests to take holiday towards the end of Ramadan.

It may be impractical for you to grant all of the requests. However, you should be supportive towards employees who observe religions other than Christianity, particularly because the majority of Christian holidays are provided for in the UK as bank holidays.

  1. Consider the effects of training events, conferences and offsite meetings

You may find that some of your employees who are in a period of religious observance are reluctant to attend training events, conferences or offsite meetings.

During Ramadan, Muslims are obliged to abstain from all food and drink between dawn and sunset. This means that you should consider carefully an employee’s request to be excused from attending work conferences, offsite locations, training and similar events during Ramadan because a failure to do so might amount to direct and indirect religious discrimination.

Your managers should arrange to meet with the employee concerned to explore fully his or her reservations about attending an event and determine whether or not a compromise can be reached. For example, the presence of food and drink at the event might be one of the concerns for the employee.

The Islamic holy month of Ramadan begins on Monday 6 June 2016 and it ends 30 days later on Tuesday 5 July 2016.

If you need help developing a policy for religious observance or holidays for your business, please contact us and we can provide one for you. Call 0118 940 3032 or email sueferguson@optionshr.co.uk.

This information was provided by Xperthr.

Shared Parental Leave Take-Up Could Be 30%

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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

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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

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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?

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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.

Poor Performance – Can You Prove It?

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Sometimes as a manager you need to deliver bad news or negative feedback to a member of your staff. You might need to pick them up on an issue of performance that you’re not happy with, or where they are not meeting your standards.

This is not a comfortable thing to do. You need to be quite assertive about it, to be taken seriously, so that your member of staff doesn’t just argue with you! To help you discuss the issue in the right way, you need evidence of the poor performance. You have to be able to show your team member what they’ve been doing wrong or below standard. Just telling them that they’re not doing what you want them to do, won’t have any impact, if you can’t prove it.

You need to collect the evidence, so your team member can really understand what they’ve done wrong and how you want them to change. It’s not about collecting evidence just to use against someone – you really need it in order to get the message across and to make a difference.

Is one of your team repeatedly late coming into work? If so, you need a recording system that shows them when they came it late and how often it happens. If your staff clock in and out every day, you have your system. If not, you need to look for another way of recording the time.

Does a member of your staff keep making errors in their work? How many times have they made a mistake and what was the result of it? Again, you need to create a way of recording the error rate and the consequences.

Do some of your clients repeatedly complain about one of your employees? If so, you need to keep all the emails or letters of complaint that you receive. When a customer complains over the phone, ask them if they would mind emailing you the details for your records, so that you improve the situation for them.

When you can show proof of poor performance, it is much easier to discuss the issue with the particular member of staff and, between you, work out what needs to be done in order to improve their performance.

We discussed the importance of collecting evidence at one of my interactive workshops. Click here to watch the short video and find out more.

How Do You Deal With Redundancies?

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Making people redundant is never an easy thing to do. However, sometimes, for the future of your business, you may find yourself facing this situation. How do you deal with it? What are you required to do by law? What’s the best way to look after your staff and make the process easier for them?

All these questions will be answered in this blog, so do read on.

What do we mean by ‘redundancy’? It is a potentially fair reason for dismissing an employee, but should only be caused by the closure of a business, the closure of a particular workplace, or a diminished need for employees to carry out work of a particular kind.

Carrying out a proper selection process is crucial if unfair dismissals are to be avoided. When you’re selecting employees for redundancy, you must ensure that the “pool” for selection is identified correctly and that the selection criteria used are objective and fairly applied. If your company is closing down the whole business or a particular place of work, the issue of the “pool” for selection will not usually arise since all the employees in that place will potentially be redundant. Where this is not the case, you should consider the following selection criteria:

Redundancy Table

It is good practice for more than one person to be involved in the selection process, to reduce the risk of perceived bias or discrimination. It is sensible to have two people, both of whom know the individual employees concerned, carry out the assessment.

As an employer you are not under a legal obligation to seek volunteers for redundancy, but it is good practice to do so. Enhanced redundancy payments may be used as an incentive for employees to volunteer for redundancy. Early retirement can also be an acceptable alternative to redundancy for both employees and trade unions.

Individual consultation with employees is essential. If you do not carry out such consultation, any subsequent dismissal will almost certainly be unfair. Start with an initial meeting with staff, to announce the likelihood that redundancies will be necessary. You will then need to carry out individual meetings with the employees selected for redundancy. Finally you will need to hold individual meetings at which your employees’ selection for redundancy is confirmed, before writing to those affected.

Making people redundant, for whatever reason, is not easy. There are many pitfalls to be avoided. As it is such a big subject, we have put together a fuller guide on how best to deal with redundancies. You can download it for free from our website by clicking here. If you have any immediate questions concerning your business and redundancies, please click here to email me or call me on 0118 940 3032.

Modern Slavery Act 2015 – What Do You Need to Know?

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Modern slavery refers to the institutions of slavery that continue to exist in the present day. Estimates of the number of slaves today range from around 21 million to 29 million. While the majority of slaves are found in developing countries, slavery also exists on a smaller scale in advanced democratic nations, for example the UK, where Home Office estimates suggest 10,000 to 13,000 victims.

In order to combat this situation, large commercial companies with a turnover of at least £36 million per year now have to prepare a slavery and human trafficking statement for each financial year. The statement must set out the steps that the company has taken during that year to make sure that slavery and human trafficking is not taking place in any of its supply chains, or in any part of its own business. If the company has not taken any such steps, it must still publish a statement to that effect. The duty to produce a statement applies to financial years ending on or after 31 March 2016.

While this might not apply directly to your business – if your turnover is below £36 million – you might still want to know about it, when considering larger businesses to trade with.

While you might not have to produce a statement, you might like to produce one to show to potential clients.  There is no set template for a slavery and human trafficking statement yet, but we recommend that your statement covers issues such as your countries of operation and supply, the process by which your company assesses whether or not particular activities or countries are high risk in relation to slavery or human trafficking and which of your company’s activities are considered to be at high risk of slavery or human trafficking. The statement should also cover any training that your company requires your staff who are working in specific countries or with certain supply chain managers to complete, to make them aware of the issues of modern slavery and how to prevent it.

If you would like some help in putting together the most appropriate statement for your business, call us on 0118 940 3032 or click here to email us.