Category Archives: Government

Apprenticeships – Make Them Work For You!

79035611 - teacher with students in metallurgy workshop

SUMMARY: With the Government championing apprenticeships in the UK, the uptake of these working arrangements by employers is at an all-time high.  The pitfalls however of getting the arrangement wrong can prove extremely costly.  These can be avoided very easily by following a few simple do’s and don’ts.

DON’T use an ordinary contract of employment.

Using an ordinary contract of employment for an apprentice makes it much harder and far more costly for an employer to terminate the agreement.  Apprentices should sign an appropriate apprenticeship agreement which sets out the terms of their engagement.

DO be aware of the minimum durations for apprenticeship agreements.

From 1 August 2012, the minimum duration for apprenticeships for 16 to 18 year olds is 12 months.  For apprentices aged 19 and above, apprenticeships must last between one and four years, unless prior learning or attainment has been undertaken.

DON’T get caught out by the National Minimum Wage Act.

The apprenticeship rate, which was introduced in 2010, applies only if the correct agreement is in place and the apprentice is in their first year of apprenticeship or is under 19 years of age.  In all other instances, apprentices will be entitled to either the development or adult rate.

DO be aware of young workers’ rights under the Working Time Regulations.

Apprentices under the age of 18, but over compulsory school age, have additional working time rights. These rights include stringent daily and weekly limits, and greater rest break entitlements.

A child ceases to be of compulsory school age on the last Friday in June in the academic year in which he/she reaches the age of 16 or if he/she reaches 16 after the last Friday in June, but before the start of the new school year.

Get it right and apprenticeships can play a vital role in the long term development of your workforce as well as contributing to enhanced productivity.

Contact Details

For more details about apprenticeships please contact:

fgmedia@fgsolicitors.co.uk

+44 (0) 808 172 93 22

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

National Minimum Wage Increases

national-living-wage

SUMMARY: The government has announced that from 1 October 2016 changes to the National Minimum Wage will come into effect.

THE CHANGES

The following changes to the national minimum wage will take effect from 1 October 2016:

1 April 2016 From 1 October 2016
National Living Wage £7.20

£7.20

Standard Adult Rate £6.70

£6.95

Development Rate £5.30

£5.55

Young Workers Rate £3.87

£4.00

Apprenticeship Rate £3.30

£3.40

THE CATEGORIES

THE NATIONAL LIVING WAGE

This rate applies to workers aged 25 or over.

THE STANDARD ADULT RATE

This rate applies to workers aged 21 or over.

THE DEVELOPMENT RATE 

This rate applies to workers aged between 18 and 20 inclusive.

THE YOUNG WORKERS’ RATE

This rate applies to workers aged below 18 but above the compulsory school age but who are not apprentices.

APPRENTICESHIP RATE

This rate was introduced in October 2010 and applies to all apprentices under 19 years of age or those aged 19 and over but in the first year of their apprenticeship.

CONTACT DETAILS

For more details about the national minimum wage changes please contact:

fgmedia@fgsolicitors.co.uk

+44 (0) 1604 871143

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

Sports Direct: Use of Zero Hours Contracts – A Business Model With Exploitation at its Heart? (Part 2)

11578822 - 3d human charcter holding green zero, 3d render, isolated on whiteSUMMARY: The Sports Direct founder Mike Ashley faced the Business Innovation and Skills (“BIS”) Select Committee on 7 June 2016 for an evidence session into the working practices adopted by Sports Direct. A month later, it was widely reported that Sports Direct’s profits had been hit. Mr Ashley’s fortunes have not improved as, at the beginning of this month, it was announced that shareholders will be asked to vote on whether there should be an independent workplace review; and this week it was reported that Sports Direct is to pay £1million to its workers for breaches of the minimum wage legislation.

But how did it come to this?

To recap, Mr Ashley received intense criticism stemming from the Guardian Newspaper’s investigation at the end of 2015, which uncovered allegations that his Company:

1. Failed to pay its workers the minimum wage;

2. Engaged a significant proportion of staff via zero hours contracts and short term hours agency worker agreements;

3. Created a culture of fear throughout its workforce due to arbitrary and outdated disciplinary practices; and

4. Conducted daily physical security searches of employees.

In the first article of a two part series, we deal with the allegation concerning a breach of national minimum wage legislation; the first article can be accessed here.

In this second article, we explore the allegation that Sports Direct sought to increase its profit margins by engaging workers on zero hours contracts and short term hours agency agreements in order to avoid many of the legal obligations of employing staff. We also review the legal considerations that your business should take into account when using either zero hours contracts or being supplied with temporary workers via an agency.

THE ALLEGATIONS

Reports revealed that nearly 80% of Sports Direct’s workers are not employees but, instead, workers engaged via zero hours contracts or short term hours agency worker agreements. During the Select Committee’s evidence session on 7 June 2016, Steven Turner, the Assistant General Secretary of the Unite Union, remarked that this practice has created a “business model that has exploitation at its heart.”

In May 2015 the Government banned exclusivity clauses in zero hours contracts; clauses that prohibit a worker from taking up work under another contract, or which require the worker to get the company’s consent beforehand can no longer be included.

However, alternative work arrangements, specifically the arrangements adopted by Transline and the Best Connection Group, who supply Sports Direct with agency workers, could be placing workers in a worse position compared to if they had been engaged via a zero hours contract post the May 2015 change.

The reason behind this claim is that the Transline and the Best Connection Group do not have an obligation to offer these agency workers any work over and above a minimum of 336 hours over a 12 month period.

However, the agency workers must accept any suitable assignment offered to them unless there is “just cause,” and if assignments are not accepted, it is likely that the worker will not be offered another.

In addition, the workers are effectively forbidden for looking for additional hours elsewhere; workers who have done so have not been offered any further assignments – this is effectively an exclusivity clause in disguise.

WHAT IS A ZERO HOURS CONTRACT?

Zero hours contracts are contracts between a company and a worker and/or an employee, which specifies that the company is not obliged to provide the worker or employee with any minimum working hours, and that the company only pays for work undertaken. Similarly, the worker or employee is not obliged to accept any of the hours offered to them.

CAN ZERO HOURS CONTRACTS STILL BE USED?

Yes, zero hours contracts can still be used by companies.

The change in the law in May 2015 did not ban companies using zero hours contracts completely, instead it prohibits zero hours contracts containing exclusivity clauses.

WHY WOULD A COMPANY USE A ZERO HOURS CONTRACT & WHEN IS IT APPROPRIATE TO DO SO?

The key benefits of a zero hours contract are that a company using these contracts:

  • does not have to guarantee a minimum amount of work, and
  • only pays for work undertaken.

This is useful if your company is a start-up business and you are unsure of your people requirements. Alternatively, zero hours contracts may be useful if a company wishes to engage staff for seasonal work, or to cover absence and holidays.

The other benefit to companies is that the relationship between the company and the worker does not have to be one of employment. However, the worker will still benefit from the right to receive the National Minimum Wage, paid annual leave, rest breaks and will be protected from discrimination.

WHAT SHOULD THE BUSINESS CONSIDER WHEN ENGAGING AGENCY WORKERS?

If like Sports Direct, your company is supplied with workers via an external agency, you should be very clear as to the employment status of these workers because this will affect their rights.

Usually, the arrangement dictates that workers supplied by an agency are classed as workers of the end user client and not as their employees.

From day 1, agency workers are entitled to access to collective facilities (such as canteen facilities, child care facilities and transport facilities) and access to information about employment vacancies. Agency workers are also entitled to take rest breaks, receive the National Minimum Wage, receive Statutory Sick Pay (if they satisfy the relevant qualifying conditions set out in the legislation), take paid annual leave and benefit from protection against discrimination.

Following 12 weeks with the Company, agency workers are entitled to receive the same pay and other basic working conditions as equivalent permanent staff; this can include the auto enrolment pension obligations.

This is a relationship which often gives rise to uncertainty of employment status and, consequently, there are many reported cases on this very issue. Companies are therefore advised to ensure that, when engaging agency workers, they have in place the appropriate documentation with both the agency supplying the worker and the agency worker.

COMMENT:

Exclusivity clauses in zero hours contracts, which could exploit the most vulnerable of workers, are now unenforceable. However, this protection does not address the real issue for zero hours workers, which is the practice of ceasing to use workers who have turned down an assignment because they have accepted an alternative assignment and are unavailable.

In addition, as is evident from the Sports Direct review, Companies are now taking advantage of other working models such as the arrangements adopted by Transline and the Best Connection Group; although these arrangements are not prohibited by law, they raise questions of morality.

Only time will tell if the ongoing review by the BIS Select Committee will result in recommendations for change. In the meantime, we would recommend carrying out a review of the arrangement that your Company adopts for the supply of its staff to ensure that any legal obligations are being met.

CONTACT DETAILS:

If you would like more information on this topic or would like to discuss a specific concern in relation to your business, please contact us:

Call: +44 (0) 808 172 93 22     Email: fgmedia@fgsolicitors.co.uk

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

Absenteeism – What’s the impact on your business?

Contact Details

For more information please contact:

fgmedia@fgsolicitors.co.uk

+44 (0) 808 172 93 22

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

Apprentices – Four Reasons and a Risk

160607 Apprenticeship Training CareerSUMMARY: Four reasons to engage an apprentice and how to overcome the main risk

The government has been encouraging employers to engage apprentices and many employers are now seeing the benefits of them.

Four key benefits

1. National Insurance Contributions (“NICs”)

Since 6 April 2016, employers do not have to pay class 1 NICs for apprentices who are earning less than £827 a week (£43,000 a year) and are:

  1. under age 25; and
  2. following an approved UK government statutory apprenticeship framework.

Specific evidence is needed to show that these two requirements are satisfied. For example, an appropriate agreement.

 2. Apprentice rate minimum wage

If the apprentice is in the first year of their apprenticeship or is under the age of 19, employers can pay the apprenticeship rate, which is currently £3.30 per hour.

3. Gain skills in areas your organisation needs to grow

Organisations will be constantly considering and implementing new ways to grow.  Apprentices can be a cost effective way of supporting the larger strategic aim.

4. Funding

There could be funding available from the Skills Funding Agency to your business to support apprenticeship programmes.  Further information can be found at www.gov.uk/government/organisations/skills-funding-agency

Risks

The intention is for the apprenticeship relationship to be a positive and beneficial one for the organisation and the individual. However, not all working relationships will be harmonious.  If things do not work out, employers need to be able to address problems and ultimately dismiss individuals both fairly and lawfully if problems subsist; this is often where the risk lies.  Why?  Apprentices can have enhanced rights on dismissal, which limits the ability to terminate the agreement without potentially a significant financial liability.

Having the right agreement in place lowers the risk by ensuring an apprentice can be dismissed in the same way as an employee.

More Information

For more information on apprenticeships and how you can make them work for you, please visit: http://www.fgsolicitors.co.uk/news/apprenticeships-make-them-work-for-you/

Alternatively, if you would like more information on other contract essentials, please visit: http://www.fgsolicitors.co.uk/news/contract-essentials/

Contact Details

If you are considering recruiting an apprentice and want to benefit from the above advantages, without worrying about the risk, please contact us:

fgmedia@fgsolicitors.co.uk

+44 (0) 808 172 93 22

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

FGazette July 2015

FGazette NewsletterFor all the latest updates on government actions in regards to trade unions, employment tribunals with a focus on settlement agreements and engaging your workforce please follow the link in the image.

Please forward the FGazette to any of your colleagues and contacts to whom you feel it may be of benefit.

If you have any problems viewing this link, please contact us on 0808 172 93 22 or fgmedia@fgsolicitors.co.uk

Biggest National Minimum Wage Increases Planned for October 2015

 

National Minimum WageSUMMARY: From 1 October 2015 changes to the national minimum wage will come into effect. The biggest real-term rise in 7 years to the adult rate.

The Changes

The Government has announced the following changes to the national minimum wage which will take effect from 1 October 2015:

From 1 October 2014 to 30 September 2015 From 1 October 2015
Standard Adult Rate £6.50 £6.70
Development Rate £5.13 £5.30
Young Workers Rate £3.79 £3.87
Apprenticeship Rate £2.73 £3.30

The increase in the adult national minimum wage rate is reported to be the biggest real-terms rise in 7 years.

The Categories

The Standard Adult Rate
This rate applies to workers aged 21 or over.

The Development Rate
This rate applies to workers aged between 18 and 20 inclusive.

The Young Workers’ Rate
This rate applies to workers aged below 18 but above the compulsory school age but who are not apprentices.

Apprenticeship Rate
This rate was introduced in October 2010 and applies to all apprentices under 19 years of age or those aged 19 and over but in the first year of their apprenticeship.

Contact Details

For more details about the national minimum wage changes please contact:

fgmedia@floydgraham.co.uk

+44 (0) 1604 871143

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

STOP PRESS: Updated Guidance on Fit Notes

Megaphone - Hot Off the Press (123rf ref 8981071)In the October 2014 edition of FGazette – the quarterly newsletter of FG Solicitors, we reported on the launch of the government’s new Health and Work Service. To read this article please click here.

The government has since published updated guidance for employers and line managers on what to do when given a fit note by an employee.

The guidance document takes you through the different sections of the fit note and how the notes can be used to help your business.

To view the document, please click on the link below:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/400128/fitnote-employers-line_managers-jan-2015.pdf