2015 - What’s in Store for UK Employers?
2015 looks set to be a busy year for employment changes. Some of the most significant changes that employers need to be aware of include:
1. Family Friendly Changes
a. Shared Parental Leave & Pay
This is brand new legislation which will apply to parents with babies due to be born/placed for adoption on or after 5th April 2015. These parents will have the flexibility to share leave in the child’s first year, something which historically only a mother/primary adopter could take. The mechanics of the new regime are complicated and employers are well advised to familiarise themselves with the regulations early. Further details are available here.
b. Changes to Statutory Adoption Leave & Pay
From 5 April 2015 there will be no service requirement in order to be eligible for adoptive leave. Adoptive pay rates will also be increased in-line with maternity pay levels. Finally, primary adopters will now be entitled to paid time off to attend up to five adoption appointments.
c. Rise of child’s age limit for parental leave
The current right to take 18 weeks’ unpaid parental leave before a child’s 5th birthday is to be extended from 5 April 2015, so that leave can be taken up to the child’s eighteenth birthday.
2. New Fit for Work Service
The new service aims to assist employees on long-term sick leave back to work, with the ultimate aim of reducing sick leave levels across the UK. Due to be rolled out during the year, the Fit for Work Service will offer employers access to free occupational assistance for employees who have been off sick for four weeks or more. Employers will also be able to claim up to £500 tax relief on payments for medical treatment for their employees where the treatment has been recommended under the new scheme.
3. Statutory Pay Rates
The usual shifts in statutory rates of pay are scheduled for 2015. Rates for statutory maternity, paternity, and adoption pay will increase from 5 April 2015, as too will statutory sick pay rates. Any changes to the national minimum wage rates will be effective from 1 October 2015.
With the general elections fast approaching in May there are a number of other topics which will either gain momentum, or possibly lose momentum over the coming months. Topics to watch out for:
1. Zero Hours Contracts
Employers should expect to hear more about Zero Hours Contracts in the press during 2015. Labour have promised that should they be voted into power in the May elections they will put in place further restrictions around the use of Zero Hours Contracts. Employers should definitely watch this space!
2. Apprenticeships
The current Government has plans to simplify the regulations surrounding apprenticeships. Further details are due; however whether this initiative will survive the May elections remains to be seen.
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
What Small Employers Need to Know about Hiring New Employees
Congratulations, you’ve found the perfect candidate to join your company. Growing your company is an exciting time for any business owner, however many employers get bogged down and worried about employment legislation.
To help you get on top of employment legislation right from the start we’ve put together some key points that you need to be aware of.
• Eligibility to Work in the UK
Always request to see the individual’s passport or proof of eligibility to work in the UK. Employers found to be employing illegal workers could face fines of up to £20,000
• Contract of Employment
Employees must receive a written statement of their terms of conditions of employment within 2 months of commencing employment. Under legislation specific information must be set out in the written terms. This is most commonly issued through the contract of employment.
• Pay
New employers need to familiarise themselves with minimum wage legislation. HMRC have recently started naming and shaming employers paying less than minimum wage. Appearing on this list is likely to seriously damage any employer’s reputation.
• Payroll
Request a P45 from your new employee to assist you in setting them up on your payroll. Using payroll software is a cost efficient way of processing your payroll and will ensure that you are fully compliant with legislative requirements such as Real Time Information (RTI).
• Holidays
Under legislation all workers start to accrue annual leave as soon as they start employment. The statutory minimum holiday entitlement is 5.6 weeks (28 days), for full-time employees, pro-rata for part-time employees. Unless an employee is leaving employment, it is unlawful to pay employees in lieu of statutory holidays.
• Hours of Work & Rest Breaks
Under the Working Time Regulations any individual who works more than 6 hours a day is entitled to a 20 minute rest break. Rest breaks are generally unpaid.
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
Shared Parental Leave - UK
Shared Parental Leave became law in the UK on Monday 1 December 2014 and will apply to all parents of babies due to be born or placed for adoption on or after 5 April 2015. The new legislation will allow parents to share leave and childcare arrangements in the first year a child is born/placed for adoption.
With an expected 285,000 couples due to be eligible for Shared Parental Leave, it is expected that the new rules will kick start a culture of change in workplaces where fathers feel more confident in taking time off for childcare.
The Main Rules
Parents will be allowed to share a total of 50 weeks off work after having a baby. Leave may be taken at the same time or separately. Parents may take continuous or discontinuous blocks of leave.
Employers must approve requests for continuous periods of leave. Consideration and alternative arrangements can be given to requests for discontinuous blocks of leave.
Maternity/Adoption leave must be curtailed before Shared Parental Leave can commence.
Employees may submit a maximum three leave request notices, this may be increased at the discretion of the employer.
The only slightly negative aspect to the new rules is the onerous statutory notification and implementation process, which employers and employees will initially have to sift through.
What Employers Need to Do?
Whilst uptake for Additional Parental Leave (APL) was very low, it is expected that with Shared Parental Leave replacing APL the uptake will increase considerably as a result of the enhanced flexibility Shared Parental Leave offers. Whilst it is unlikely that there will be an immediate rush of requests, it is anticipated that they will gradually increase in the coming years.
In preparation, employers are recommended to revise their existing Maternity, Paternity and Adoption Policies as well as introduce a new Shared Parental Leave Policy.
In addition to a Shared Parental Leave Policy, Bright Contracts will also be providing template notification forms and producing guidance notes for managers on handling requests. Follow us on Twitter @BContractsUK for updates.
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
New 2015 Living Wage Rate announced
The UK "living wage" - an hourly rate based on the amount needed to cover the basic costs of living - has been raised by 20p to £7.85, whilst The London Living Wage has been raised from 8.80 an hour to £9.15.
What is the difference between the Living wage and the national minimum wage?
The living wage is an informal benchmark, not a legally enforceable minimum level of pay line the national minimum wage. The national minimum wage is set by the business secretary each year on the advice of the Low Pay Commission. Unlike the living wage, the national minimum wage is enforced by HM Revenue and Customs (HMRC).
The basic idea of the living wage is that these are minimum pay rates needed to let workers lead a decent life.
Does this effect employers?
The living wage is a voluntary wage so employers are not legally obliged to pay it. Nevertheless, it has been adopted by more than 1,000 employers across the country benefitting 25,000 workers. Citizens UK, the community behind the living wage project say that the number of companies paying the rate has doubled in the last year. However, some business groups are not happy with the increase saying some employers might struggle to pay it.
The advice to employers should be to seriously consider the living wage, but only implement it if it is affordable.
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
Holiday Pay – UK Landmark Ruling!
Earlier this year the European Court of Justice (ECJ) ruled that holiday pay must correspond with normal pay which may be made up of additional amounts such as commission or overtime payments.
Whilst UK legislation would have to follow the ECJ, the ECJ did leave it up to national courts to decide how commission and overtime payments should be calculated. Employer groups have since been anxiously awaiting the UK’s decision, with fears that they could face:
• Billions of pounds in higher wage billons
• Costly claims for underpaid leave as far back as 1998
Yesterday, 4th November, the EAT finally made its long awaited judgement, ruling that:
• Many elements of pay which are currently excluded from holiday pay calculations now must be included e.g. commission and overtime payments. This will ultimately lead to higher wage bills for many employers.
• However, more positively limits have been put in place for back pay liability. Any claims in respect of underpaid holiday pay in the past will only be possible where no more than three months has elapsed between any such underpayments – in practice this is likely to mean that employees can only claim in respect of one year’s leave.
What Action Should Employers Take?
• Now: look at precisely what needs to be included in the calculation of holiday pay
• In the long term it will be worth reviewing how to structure working arrangements in order to minimise the increased liability for holiday pay. For example:
o Offering voluntary overtime rather than guaranteed overtime
o Using agency staff to cover periods of increased demand rather than offering overtime
o Revising commission plan payment schedules
o Preventing leave from being taken at certain times of the year
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
Should employers pay sick pay?
If an employee is out of work sick in the UK, employers are legally obliged to pay the employee Statutory Sick Pay (SSP) from the 4th day of absence for a maximum of 28 weeks. SSP is currently set at £87.55 per week.
However, many employers offer additional sick pay to their employees, known as company or contractual sick pay.
The recommended rate of company sick pay will very much vary from industry to industry and from company to company.
Employers must specify to their employees in the contract of employment whether or not a company sick pay policy is in place. However it can be advisable to retain the specific details of the policy within the staff handbook.
It is quite normal for employers to specify different levels of sick pay between employees e.g. many employers will graduate sick pay amounts based on length of service, or at a minimum require that an employee pass their probation before becoming eligible. Employers just need to be mindful not to fall foul of discriminating against any employees.
If an employee is eligible for contractual sick pay and the employer does not pay it, the employee may be able to bring a claim for breach of contract and/or claim for the unlawful deduction from wages by the employer.
Amending Company Sick Pay Policies
Employers commonly ask whether or not they can amend company sick pay details.
Changing sick pay policies for any new recruits is generally an easy, straightforward process. For existing staff it could constitute a change to their terms and conditions. It is therefore advisable to get the employees written agreement. In order to encourage staff to willingly accept the new terms, it might be worthwhile to simultaneously introduce enhancements to their terms and conditions. For example, a pay rise, introduction of a new or improved pension scheme, a medical insurance scheme or increased holidays.
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
New rights for expectant fathers & partners
From today, 1 October 2014 fathers/mother’s partners have the right to take time off to accompany the pregnant woman to ante-natal classes.
Under the new regulations, fathers/partners across England, Scotland and Wales, may take unpaid time off for up to two ante-natal classes. The time off is capped at six and a half hours for each appointment, giving the employee enough time to travel to and from the appointment.
The Government has issued guidance on the change which is available here.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/351413/bis-14-1063-time-off-to-accompany-a-pregnant-woman-to-ante-natal-appointments-employer-guide.pdf
This change forms part of the Governments plans to introduce shared parental leave. Shared parental leave, which will come into effect for births/adoptions that fall on or after 5 April 2014, will allow mothers, fathers, partners and adopters to choose how to share time off work after their child is born or placed.
Employers need to ensure their policies and procedures are kept up-to-date with these policies.
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
Four UK Employment Law Changes from 1st October 2014
2014 has been a busy year already for employers with the changes in flexible working and the introduction of early conciliation by ACAS. October sees the introduction of further amendments:
1. Antenatal rights for fathers and partners
Fathers and partners will have the right to unpaid time off to accompany a pregnant woman to an antenatal appointment on up to two occasions.
2. National minimum hourly wage increase
a. The adult rate will increase from £6.31 to £6.50
b. The rate for 18 – 20 year olds will increase from £5.03 to £5.13
c. The rate for 16 – 17 year olds will increase from £3.72 to £3.79
d. The rate for apprentices will increase from £2.68 to £2.73
3. Employment Tribunals must order equal pay audits
Where a tribunal finds an employer in breach of equal pay, they must order the employer to carry out an equal pay audit unless an exception applies
4. Increased protection against unfair dismissals for Reservists
From 1 October, where an employee is dismissed because they are a member of a reserve force, the normal two-year service requirement for bringing an unfair dismissal claim does not apply, and an employee may bring a claim immediately in these circumstances.
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
Giving an employee reference - be careful!
Writing a reference for an ex-employee may at the outset seem straight forward, however employers need to be cautious.
What Can Go Wrong
If you provide a reference you have a duty to take reasonable care to ensure it is true, accurate, and fair and not misleading.
• If you provide a bad reference that you can’t substantiate, you run the risk of your former employee suing you for damages if they did not get the job.
• If you provide a glowing reference for an employee who has not been satisfactory and that employee goes on to perform badly in their new job, the new employer could claim damages against you.
Your Options
• Do not give references as a matter of policy. Employers are generally under no obligation to provide references. If you decide on this option as policy it is advisable to reply to reference requests with a statement that it is not your policy to give them, particularly to avoid misunderstandings perhaps with employers believing that you had problems with the employee.
• Give the bare facts: many employers provide the minimum details e.g. the employee’s position and dates of employment. Again if this is your policy it is advisable to state that it is your policy not to provide further details.
• Providing a full reference. You may decide to give a full reference giving details for example about the employees attitude, timekeeping, drive etc. If you decide on this option remember you have a duty to ensure the content is true, accurate, and fair.
• Do not include sensitive personal data in a reference, e.g. information about the individual’s health, race or trade union membership, without first obtaining the ex-employee’s consent.
• Include a disclaimer: many companies aim to limit liability by adding a disclaimer stating that they cannot accept any liability for errors or omissions in the reference. However, in reality, how much protection a disclaimer will provide may be limited.
Whatever option you decide to go with the key is to be consistent. Inconsistency could lead to a claim of discrimination from a disgruntled employee. It is best to establish a policy clearly stating whether you give references, if you do, who should give them and what they should contain.
Bright Contracts - Employment Contracts and Handbooks
ACAS early conciliation scheme - is it a success?
Since 6th May 2014 any employee who lodges an employment claim must have made an Early Conciliation notification to ACAS. On receipt, ACAS begin a process of trying to resolve the dispute, and must issue an Early Conciliation certificate before the claim can progress to an employment tribunal.
Although employees must notify ACAS of their intention to bring a claim to an employment tribunal, actual participation in any early conciliation efforts is voluntarily. Equally, if ACAS contacts the Company regarding early conciliation their participation is also optional.
Results to Date
Over the first two months that the service was operations ACAS received between 6,500 and 7,000 notifications per month.
Interestingly 10% of notifications brought to ACAS were from employers rather than employees. This is a canning move by employers seeking to pre-empt possible tribunal claims from employees. By raising a notification to ACAS, employers are hoping to save money on legal and tribunal fees by resolving the issue with the employee early.
The success of the scheme is still very much in the balance. ACAS have, very positively, quoted that only 7% of employees and 9% of employers did not want to participate in early conciliation, however on further inspection only a very small percentage of notifications have been successfully resolved during the Early Conciliation Process. Some of the reasons given for failed processes included: the ACAS conciliator was ineffective and that the process was poor.
Time will tell whether or not this scheme is a success, what does seem apparent is that the scheme is very much at an early teething stage.
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
