Category Archives: Employment Law

How Will the Apprenticeship Levy Affect Employers?

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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!)

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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

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.

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.

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.

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.

Zero Hours Update – the Latest Developments

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A zero-hour contract is the name given to a type of contract, where an employer has the discretion to vary employee’s working hours, usually anywhere from full-time to “zero hours”. The employer typically asserts that they have no obligation to provide work for the employee.

There have been a number of changes made to the rules governing these contracts in recent months and the Department of Business, Innovation and Skills (BIS) has published some guidelines for employers, suggesting the following:

  • Zero hour contracts are only appropriate in situations where an employee is engaged in seasonal work or a one-off event
  • When recruiting, you should clearly advertise the job as a zero hour contract and inform any applicant that hours are not guaranteed
  • You should include within the contract whether you deem the individual an ‘employee’ or a ‘worker’, what rights they are entitled to, how work will be offered to them, and how the contract can be terminated
  • As an employer you should give as much notice as possible when you can’t offer work
  • This is addition to the fact that exclusivity clauses have been prohibited since May 2015. There is more about this in a previous blog here.

In addition to this guidance, the BIS’s Exclusivity Terms in Zero Hour Contracts (Redress) Regulations 2015 give more protection for employees on zero hours contracts. They will have a right not to be unfairly dismissed if the reason is that they have failed to comply with an exclusivity clause. There is no qualifying period of employment needed to bring such a claim. Zero hour workers have the right not to be subjected to detriment because of non-compliance with an exclusivity clause and if you breach these rights, a worker may issue a claim and seek a declaration or compensation.

What does this mean for you as an employer?

If you use zero hours contracts, then you should do the following:

  • Review your employment contracts
  • Audit your workforce to see if zero hours contracts are the appropriate contracts to use, in line with the BIS guidance.
  • Contact us if you need any help with sorting this out! Call us on 0118 940 3032 or click here to email me.

Changes to the National Minimum Wages

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The National Minimum Wage Act 1998 lays down minimum levels of hourly pay for certain employees. The current rate for those aged 21 and over is £6.70 per hour. From 1 April 2016, the National Minimum Wage (Amendment) Regulations 2016 introduce the national living wage, set at £7.20 per hour, for workers aged 25 and over.

The National Minimum Wage Regulations 2015 make sure that the hourly rate, at which a worker is entitled to be paid in respect of his or her work in any pay reference period, is the rate that is in force on the first day of that period. The pay reference period is a month or, in the case of a worker who is paid wages by reference to a period shorter than a month, that period. Therefore, where a pay reference period begins before 1 April 2016, the old rate of the national minimum wage will apply for that pay reference period.

From 1 April 2016, the National Minimum Wage (Amendment) Regulations 2016 introduce a compulsory national living wage of £7.20 per hour for all workers aged 25 and over. The Regulations also double the financial penalties for which employers will be liable if they are found to have paid any workers below the national minimum wage. The penalty is increased from 100% to 200% of the total underpayment for all workers specified in the HMRC notice of underpayment.

If you need to know more about these changes, how they affect your business and your employees, or how to handle the changes, come to our next Employment Law Update workshop. It is being held on 12 April 2016 in Wargrave, Berkshire and costs just £20 +VAT. Click here for details and online booking.

The Year Ahead – Expected Changes to Employment Law

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In 2016, employers will see a number of key Employment Law changes. Here is a summary of those agreed so far, to help you prepare for how they might affect your business.

January 2016

Redress for workers punished for breaching exclusivity clause – Regulations came into force on 11 January 2016 to enable workers who suffer a detriment, or are dismissed as a result of breaching an exclusivity clause in a zero hours contract, to make a complaint to an employment tribunal.

March 2016

Gender pay reporting details revealed – Regulations must be introduced by 26 March 2016 that will require employers with 250 or more employees to publish information about their gender pay gaps.

April 2016

National living wage introduced – A new compulsory national living wage, which works as the top rate of the national minimum wage, will be introduced on 1 April 2016 for workers aged 25 and over.

Duty to prepare modern slavery statement takes effect – The duty to prepare a slavery and human trafficking statement (which has been in force since 29 October 2015) will apply in relation to financial years ending on or after 31 March 2016, for companies with a turnover of at least £36 million per year. This will begin to take effect for employers from 1 April 2016, depending on the timing of their financial year.

Penalty for failure to pay national minimum wage doubled – Draft Regulations double the penalty for non-payment of the national minimum wage and the national living wage for pay reference periods starting on or after 1 April 2016.

Statutory pay changes – The maximum amount of a week’s pay for the purposes of calculating statutory redundancy pay, and other awards such as the basic award for unfair dismissal, is likely to increase on 6 April 2016. The weekly rates of statutory sick pay, maternity pay, paternity pay, adoption pay and shared parental pay will not increase for 2016/17.

October 2016

National minimum wage – This may rise on 1 October 2016, subject to the prevailing economic conditions and the Low Pay Commission’s report, which is due to be delivered to the Government in February 2016.

There are many other changes that are yet to be confirmed, including the Trade Union Bill coming into force, a cap on public-sector exit payments being introduced and new rules on apprenticeships. We’ll bring you news of all these and other changes as they are confirmed. If you have any questions about these changes and how they affect your employees and your business, do get in touch by calling 0118 940 3032 or by clicking here to email us. We will be running our next Employment Law Update workshop on 12 April 2016. Click here for details and online booking.