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Blog  »  June 2014
Jun 14

Posted by
Laura Murphy

New Flexible Working Structure

On 30th June 2014, Flexible Working Regulations will be extended giving the right to request flexible working arrangements to all employees with 26 weeks service. Up until now only parents with children under 17 years, or 18 if the child is disabled, and certain carers were eligible to request flexible working.

Flexible working is a way of working that suits the employee’s needs e.g. having flexible start and finish times, working from home, part-time etc.

With the changes, the formal procedure for applying for flexible working has also been reduced to a minimum. However, some key requirements will still apply:

• Employees may only submit one written request in a 12 month period

• All requests must be dealt with in a “reasonable manner”

• All requests, including any appeals, must be fully dealt with within three months of receiving the initial application

• Any change to an employee’s terms and conditions will be a permanent change, with no right to revert to their original terms

• Employers can decline requests on eight (very wide) business grounds:

o Extra costs which will damage the business
o The business won’t be able to meet customer demand
o The work can’t be re-organised among other staff
o People can’t be recruited to do the work
o Flexible working will have an effect on quality and performance
o There’s a lack of work to do during the proposed working times
o The business is planning changes to the workforce

Generally, a tribunal will not investigate the rights and wrongs of a refusal, however they will look to see whether proper procedures have been followed. Maximum compensation for a failure to comply is eight weeks’ pay (currently capped at £464 per week).

Employers should be reviewing their internal policies and procedures to ensure that they comply with the amended legislation.

Bright Contracts – Employment Contracts and Handbooks.
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Posted in Company handbook, Contract of employment

Jun 14

Posted by
Ann Tighe

Thousands of underpaid workers benefit from HMRC NMW investigation 6 June 2014

More than 22,000 workers denied the National Minimum Wage (NMW) have received £4.6m in unpaid wages following an HMRC crackdown.

HMRC conducted 1,455 NMW investigations in 2013/14 and found arrears in 47% of cases – the highest strike rate since NMW was introduced.

During the period, HMRC issued 652 financial penalties worth £815,269 and recovered average arrears of around £205 per worker.

Jennie Granger, director of enforcement and compliance at HMRC, said: “Paying the National Minimum Wage is not a choice – it’s the law. HMRC will continue to ensure that workers get at least the wage to which they are legally entitled.

“Where an employer ignores these rules, we will ensure that any arrears are paid out in full and the employer is fined. Rogue employers be warned – we will find you and you will pay.”

In one case a social care provider had not paid its staff for travelling time and other hours worked and was told to repay over £600,000 to almost 3,000 workers.

And a recruitment agency was ordered to pay £167,000 to workers, including some it had classified as unpaid interns.

As a result of the investigations, TUC general secretary Frances O’Grady is calling for further action to be taken by the government and for employers that knowingly underpay their staff to be named and shamed.

“Nearly a million UK workers rely on the national minimum wage, which has become a vital lifeline. There must be no hiding places for companies who flout it.

“The action taken by HMRC is a welcome step but must be the beginning of a concerted campaign that also raises awareness about the right to a legal wage among those being exploited.”

Bright Contracts – Employment contracts and handbooks.
BrightPay – Payroll & Auto Enrolment Software.

Posted in HMRC, Payroll

Jun 14

Posted by
Laura Murphy

Changes to Holiday Pay Calculations

As we enter the summer holiday season employers need to ensure that they are paying their employees correctly during annual leave.

A recent decision by the European Court of Justice (ECJ) will impact how some annual leave pay is calculated.
Do you pay employee’s commission? Is the commission calculated based on the amount of sales made or actual work carried out? If yes, according to the ECJ, holiday pay should include commission pay.

The decision was made in the case of Locke v British Gas Trading and Others. Locke was a Sales Representative whose commission made up approximately 60% of his remuneration. After taking two weeks leave in 2011, Locke suffered financially as he was unable to generate sales for the period he was on annual leave.

The ECJ ruled that the purpose of annual leave is to allow a worker to enjoy a period of rest and relaxation with sufficient pay. By not including commission payments with holiday pay, employees are less likely to take annual leave so as to avoid financial hardship.

It has been left to the national courts to determine how to calculate the commission to which a worker is entitled, however the court did suggest that taking an average amount of commission earned over a certain period, e.g. the previous 12 months.

Employers are advised to review their commission policies to establish which, if any, payments need to be included in annual leave pay.

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Posted in Annual Leave, Contract of employment, Employment Update, Pay/Wage


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