Monthly Archives: June 2014

Pensions auto-enrolment – a reminder

SUMMARY: Pensions auto-enrolment – don’t let it take you by surprise.

The provisions in relation to the requirement to automatically enrol workers into workplace pension schemes under the auto-enrolment regime came into force in June 2012.  The new duties are being implemented month by month over a five and a half year staging period that started on 1 October 2012.

Staging dates

Organisations have different staging dates, depending partially on the size of the business.  For some businesses, their staging date will not be until 2017. Larger employers passed their staging dates first. However, for many businesses the staging date is in 2014, 2015 or 2016.

As a guide, the position is as follows:

  • Between 50 and 249 employees: staging dates between 1 April 2014 and 1 April 2015.
  • Fewer than 50 employees: staging dates between 1 June 2015 and 1 April 2017.
  • New employers set up between 1 April 2012 and 30 September 2017: staging dates between 1 May 2017 and 1 February 2018.

If you are unsure of your staging date, it is important to check this.  Most businesses will be able to check their staging date by entering their PAYE reference into a staging date tool on The Pensions Regulator’s website.

There is useful information about the staging date on this webpage: http://www.thepensionsregulator.gov.uk/employers/what-is-my-staging-date.aspx#s9429

Contributions

After the staging date, an employer must contribute to its chosen pension scheme on behalf of its workers.  The minimum level of pension contributions that both the employer and worker will have to make will be phased in, increasing to allow time for adjustment.  For example, for employers in the case of money purchase schemes this will be from 1% to 3% with full contributions  having to be paid from 1 October 2018.

Existing schemes

An employer who already has existing pension arrangements in place for some or all of its staff must not assume that those arrangements satisfy its duties under the new regime. Some common areas that will need to be reviewed are waiting period rules, eligibility conditions linked to status or pay thresholds or contribution rules.  If changes are to be made to existing arrangements so that they satisfy the qualifying criteria the processes for doing so will need to be built into the implementation timetable, which may involve consultation with its existing members.

Seek advice

A deliberate failure to comply with the auto-enrolment requirements is a criminal offence punishable by a fine or imprisonment, for which individual directors and other company officers can be held liable.

Employers should not delay and should seek advice from a financial adviser to decide what the most appropriate arrangements are and whether current arrangements can be used.

Contact Details

For more details about these changes please contact:

fgmedia@fgsolicitors.co.uk

+44 (0) 1604 871143

This update is for general guidance only and does not constitute definitive advice. 

World Cup 2014… what should employers do to prepare?

With just a few days to go before the World Cup kicks off, if they have not done so already employers should be considering the potential effects of this latest major sporting event on their business.  The main issues for employers will be requests for annual leave, sickness absence, and website use during working hours.

What can employers do to prepare?

  • Decide on a policy for dealing with annual leave requests.  If the normal holiday request procedure is to apply, employers should remind employees of this.  If new procedures are to be put in place temporarily, highlight these to employees in good time and ensure that they are applied consistently.
  • Remind employees of the absence notification/management procedures and the potential that they could be subject to disciplinary procedures if they are not genuinely sick but provide sickness as the reason for their absence.  Absence levels should be monitored during this period to identify particularly high levels of sickness absence or even post match hangovers.
  • Flexible working may be a consideration, allowing employees to come in later or finish sooner but agreeing when this time can be made up. Employees should also be permitted to swap shifts. This approach should be applied consistently and employees should be made aware that any change to their normal working arrangements should be agreed in advance.
  • Allow staff to watch the television or listen to the radio in a communal area.  This could offer an alternative to employees tempted to either “pull a sickie” to watch the games or to view them at work on the internet.
  • There may be an increased use of Social Media such as Facebook or Twitter or websites covering the World Cup. Employers should ensure that they have a clear policy regarding web use setting out that monitoring will take place, what use is permitted and what the likely sanctions are for a breach of the policy.
  • Whilst watching a match some employees may enjoy a drink or two. Employees should be reminded that if they are found to be under the influence of alcohol or drinking at work, they will be subject to disciplinary action.  Any no alcohol policy should be clearly publicised.

In summary…

In aiming for business continuity, it makes sense for employers to be:

  • Flexible – in altering working hours to accommodate viewing.
  • Clear – in relation to expectations of leave requests, absence and performance.
  • Communicative – discuss these matters with employees as soon as possible and continue to remind them of policies.
  • Fair - in particular with respect to the way in which requests for time off are dealt with.

Finally, we would emphasise that employers should ensure consistency in their treatment of employees.

Contact Information

If you would like any further advice on absence management or disciplinary procedures please contact:

fgmedia@fgsolicitors.co.uk

+44 (0) 1604 871143

This update is for general guidance only and does not constitute definitive advice.

Counting the cost of discrimination

Megaphone - Hot Off the Press (123rf ref 8981071)The cost of litigation is always a concern for employers and never so more than in discrimination claims. Employers should never underestimate the cost and disruption a discrimination claim can give rise to. Discrimination claims are often complex and take more than a single day to be heard.  On top of the legal costs involved in defending a claim, there are the hidden costs of absent managers who have to attend to give evidence and reputational damage to the business itself.

In order for employers to assess their attitude towards risk and what the approach should be to preventing discrimination in the workplace it is helpful to understand the consequences of getting it wrong.   Compensation awarded in a discrimination claim is not subject to the statutory financial limit, which a standard unfair dismissal claim is subject to and is uncapped in relation to financial loss.  Compensation may also include a separate award for injury to feelings; the amount awarded depends upon the severity of the case. The maximum award usually sits at £30,000 for the most serious of cases, with cases involving one off minor incidents achieving up from £600.   Damages for personal injury can also be claimed as part of a discrimination claim; for employers who have been found to have acted in a high handed or oppressive way aggravated damages can be awarded.

This is not the end of the matter.  In cases presented on or after 6 April 2014, the Employment Tribunal will have the power to impose financial penalties on employers who lose in the following specified circumstances:

  • where the employer’s breach has “one or more aggravating features“; and
  • even if a financial award has not been made.

It is not clear how the employment tribunal will determine what amounts to “aggravating features”. The government has suggested penalties would be imposed where “the breach involves unreasonable behaviour, for example where there has been negligence or malice involved”. Further guidance has suggested that relevant factors could include the circumstances of the case, the size of the employer, the duration of the breach of the employment right, and the employee and employer’s behaviour.

The minimum penalty will be £100 and the maximum £5,000.  If a financial award has been made, the financial penalty must be 50% of the amount of the award (subject to the minimum and maximum caps).  An employer will not have to pay the full penalty if it pays 50% of the penalty within 21 days.  Employment tribunals will be required to take account of the employer’s ability to pay.

The penalty will be paid to the Secretary of State, who will pay the money into the Consolidated Fund (the government’s general bank account in the Bank of England).

Whilst financial penalties may be awarded in any type of claim, by their very nature discrimination claims are likely to present employment tribunals with their first opportunity to issue the new penalty.

On the upside employment tribunal claims are down. The introduction of tribunal fees from 29 July 2013 may deter some individuals from pursuing a claim.  In a discrimination claim, claimants have to pay an issue fee followed by a hearing fee (usually £250 and £950 respectively).

There is some comfort for employers as from 6 May 2014, claimants will not be able to automatically bring a claim. Claimants will have to utilise the new compulsory pre-claim Acas conciliation process by submitting details of their dispute to Acas before bringing their claims, at which point they will be offered pre-claim early conciliation (“EC”) for a period of one month. If it is refused by either party, or is unsuccessful, the claimant will be able to go ahead and present their claim to the employment tribunal. If the parties enter into EC this will “stop the clock” on the limitation period to present the claim to the employment tribunal.

If things do go wrong, which sometimes happens, EC may provide an employer with an early opportunity to settle the dispute more cost effectively on a confidential basis and at the same time avoid stressful costly litigation and the possibility of a financial penalty.  EC is free to both parties.

No employer can prevent a disgruntled employee or ex-employee from pursuing a discrimination claim. Likewise, an employer does not want to have to pay a financial penalty to the government.  Whilst EC may be one option for resolving a workplace dispute, there are many measures that can be implemented to reduce the risk of the business having to take the full force of a successful claim.  Zero tolerance on discrimination, bullying and harassment in the workplace, supported by clear consistently applied policies and procedures and training can go a long way to assist an employer to defeat a claim.