2016 MARCH
With the latest updates on tribunal awards, avoiding discrimination and employer liability, we are excited to share the latest edition of our FGWorks newsletter!
Please feel free to forward FGWorks to any of your colleagues and contacts who it may be of interest to.
Your feedback is always important to us as we continually strive to improve and develop the services we offer. Please send any feedback to: fgmedia@fgsolicitors.co.uk
To view further news updates or for any other information, please visit: www.fgsolicitors.co.uk
2016 MARCH
SUMMARY: Many employers give their employees discretionary bonuses or commission. However, “discretionary” does not mean that employers can pay whatever amount they choose.
In a recent case, the Court of Appeal agreed with the High Court that the amount of “discretionary” commission paid to an employee should be increased.
This case is a useful reminder that an employer should be able to show that the way in which it has exercised its discretion is not irrational or perverse.
Here are our top tips for employers who want to avoid challenges by employees about how they have exercised their discretion:
- Have in place an appropriately worded clause in the contract of employment setting out that a bonus/commission is discretionary.
- Consider the reason(s) for the amount of bonus/commission you are giving to an employee.
- Record your reason(s) in writing at the date the bonus/commission decision is made so that you have evidence ready in the event of a challenge. Your record should show why and how you have reached a decision. Flipping a coin is not a rational decision-making process!
- If you want a bonus/commission scheme in place, ensure that this is suitably worded to give you flexibility. For example, the flexibility to vary or withdraw a scheme can be a useful tool.
- If you tell employees there are factors that will be taken into account in decision making (for example, in a commission scheme), ensure these factors are taken into account. If the factors change, tell employees in advance of them carrying out the work.
- Treat staff consistently. If an employee feels that they have been awarded a lower commission/bonus than others, they may claim this is on the basis of a protected characteristic (such as age, sex or disability). This could leave an employer facing a discrimination, as well as a breach of contract, claim.
If you follow these tips, you should be able to motivate your workforce with the possibility of a bonus/commission payment, but avoid claims from employees when you want or need to pay less.
Case
Hills v Niksum Inc [2016] EWCA Civ 115
Contact Details
For more details about how to set up and implement bonus or commission schemes 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.
2016 MARCH
When does it come into force?
1 April 2016.
How much is it?
£7.20 per hour.
Is there a small employer exemption?
No. All employers will be obliged to pay the National Living Wage.
Who does it apply to?
Workers aged 25 or over.
Where has this come from?
It falls under the National Minimum Wage legislation.
Is it the same as the Living Wage?
No, organisations must pay workers the National Living Wage, but the Living Wage is voluntary, set by the Living Wage Foundation and calculated according to the basic cost of living in the UK. The current UK Living Wage is £8.25 per hour and the current London Living Wage is £9.40 per hour.
What payments can be taken into account when deciding if the correct rate is being paid?
There are a number of elements of pay that can be taken into account. These include basic pay, bonus, commission, piecework and accommodation allowances.
Are pension payments made by the employer taken into account when deciding if the correct rate is being paid?
No.
What about tips?
Tips cannot be taken into account when calculating whether the correct rate has been paid to the worker. This is even if the tip is paid through the payroll system.
Is there an easy way of checking if I am paying the correct amount?
The Government has published an online calculator which can be used by employers and employees to determine whether the correct amount is being paid. This can be accessed at:
https://www.gov.uk/am-i-getting-minimum-wage
What happens if I fail to pay the correct amount from 1 April 2016?
The rates are enforced by the HMRC and those employers who fail to pay the correct rates will face financial penalties.
Contact Details
For more details about the National Living Wage please contact a member of our Employment Law team:
fgmedia@fgsolicitors.co.uk
+44 (0) 808 172 93 22
This update is for general guidance only and does not constitute definitive advice.
2016 MARCH
Date: Wednesday 13 April 2016
Time: 8:00 – 10:00 am
Cost: Free including breakfast
Venue: FG Solicitors Offices, 2 Deanery Court, Grange Farm, Preston Deanery, Northampton, NN7 2DT
In our continuing series focusing on optimising staff management we invite you to our latest seminar – Building a High Performance Work Culture.
To see how your business goals can be achieved through maximising staff engagement and productivity, join us on 13 April when we will cover:
- Tools for evaluating your existing performance management strategy
- Building and maintaining a high performance culture
- Creating an effective performance management process
- A practical insight for managing poor performers
- Reward and performance strategies
Please e-mail us to reserve your spot: info@fgsolicitors.co.uk
To discuss our next event or for any other enquiries, please contact us:
fgmedia@fgsolicitors.co.uk
+44 (0) 808 172 93 22
2016 MARCH
Thank you for all of your feedback for our next seminar topic!
We are happy to announce that your choice is… Building A High Performance Work Culture!
Below are the final results:
Don’t wait!
More information about the topic to be covered will be provided soon, but there is no time like the present to book your place!
Please e-mail us to reserve your spot: info@fgsolicitors.co.uk
Contact Details
To discuss our next event or for any other enquiries, please contact us:
fgmedia@fgsolicitors.co.uk
+44 (0) 808 172 93 22
2016 MARCH
Assist Insurance Services have been using the services of FG Solicitors for over 3 years now, following a personal recommendation. We have utilised their services for a variety of HR issues, from the designing of our new employee handbook and contracts of employment, through to the most complex of disciplinary cases and dismissals.
The advice provided by FG Solicitors has not only been ‘sensible’ legal HR advice but very timely and prompt, and they have advised throughout the process whatever the issue we have had to face.
The service has been so good, we have been happy to recommend FG Solicitors to others.
We would recommend the services of FG Solicitors to any business who wants the most up-to-date legal advice on any HR issue.
Steve Leech, Managing Director, Assist Insurance Services Ltd
2016 MARCH
SUMMARY: From 6 April 2016 employers will see a small increase to the limit on tribunal awards and statutory payments.
New limits have been introduced for dismissals which occur on or after 6 April 2016. The old limits will apply to those dismissals before 6 April 2016. The changes are summarised as follows:
| Compensation Limit |
Current Figure |
From 6 April 2016 |
Comment |
| Maximum compensatory award for unfair dismissal. |
£78,335 |
£78,962 |
…or 52 weeks’ gross pay, if lower. |
| Maximum limit on a week’s pay. |
£475 |
£479 |
This figure is used for calculating:
- the basic award in unfair dismissal claims; and
- statutory redundancy payments.
|
| Minimum basic award for certain types of unfair dismissal. |
£5,807 |
£5,853 |
This level of award applies to dismissals in relation to:
- trade union membership or activities;
- health and safety duties;
- pension scheme trustees duties; or
- acting as an employee or workforce representative.
|
Contact Details
For more details about Employment Tribunal claims and these limits 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.
