Category Archives: Employers

Getting back to work

Work Safety

Announcing the extension of the furlough scheme will have provided many businesses and employees with some comfort and further financial breathing space during these challenging times. The scheme will remain in place until 31 October 2020, which is perhaps longer than initially anticipated. The scheme’s current format will however change from August with employers being required to share the cost of furloughed staff with the government.

By the end of May more detail about the post-July changes will be published. Although the aim of the changes will be to provide employers with greater flexibility to get furloughed employees back to work on a part-time basis, without the full detail of the changes, the real benefit cannot be assessed. So there will be some nervousness until the employer’s contribution has been published.

Most employers supported by the furlough scheme will sensibly defer any definite decisions about the future shape of the workforce and their return to work plans until further information is available. In the meantime, there are certain key questions that need to be answered.

Can the business return to the way it was in the short and long-term from both a financial and operational perspective and if so, how quickly can this be achieved, if at all?

Even when driven by financial necessity, furloughing employees will have been a difficult decision but in many cases it would have been implemented overnight. Bringing the operation back to life and having sufficient revenue streams to support this move is likely to be a more complex process; a new strategy may be required. Where people are at the core of the operation, workforce planning will be an critical part of developing a new strategy, which may inevitably involve restructuring and redundancies. Changes to contractual terms and conditions of employment may also be necessary. In either case, careful planning will ensure that all legal obligations, including complying with any consultation requirements are satisfied to minimise the risk of claims in the employment tribunal.

How will employees’ expectations be managed?

Until the recent announcement, the focus has been on the furlough scheme ending at the end of June. In contrast to the suggestion furlough is addictive, the majority of those furloughed will have been focusing on returning to work on 1 July, which is probably what individuals believed they were signing up to under their furlough agreements. Financial reasons will be at the heart of the decision for any business to utilise the scheme for as long as possible. In making this decision, employers need to be able to address employees’ current expectations, not only in terms of a continued requirement to remain at home but also the financial impact that it may have on them personally.  A clearly communicated rationale and a keeping in touch plan will be essential to retain the engagement of those on long-term furlough, if those employees are key to future business success once the recovery period is underway.

The consequence of long-term furlough means that employees are being asked to agree to a continued variation of their contracts of employment. If furlough is to be extended it will be important to establish if current furlough agreements can be relied upon or whether new agreements will need to be issued to avoid breach of contract and wage claims.

Are there any health considerations that need to be addressed in the return to work plan?

There is still no certainty about the curtailment of the virus and the health risks are still present. Any return to work plan must be supported by a thorough health risk assessment. The assessment needs to start from an employee’s home and include their journey to and from work. It is difficult to control who individuals come into contact with when away from work. Control measures will need to be implemented, including reiterating the importance of following the government’s social distancing measures and good hygiene. Further hard work will be needed once the employee is back at work to manage any health risks, with adequate controls being implemented. Adhering to government and the Health and Safety Executive guidance should be non-negotiable from the perspective of both the business and all employees when it comes to protecting individual well-being. Vigilance and flexibility in relation to control measures will be important to safeguard health, if the level of risk increases. The workplace is likely to feel and may look very different when employees return. It is important that clear guidance and training is provided on how to work safely and protect health.

Mental health should also be a factor that is considered as part of any risk assessment. This factor is multi-faceted. Some employees may need reassurance as they have concerns about their personal safety. Others may struggle to adapt when returning, particularly if the work regime feels unfamiliar. Deferring a return to work or making a request that homeworking is undertaken, may leave individuals feeling left behind and isolated. Employers have a legal duty to tackle work-related mental health issues; risks need to be assessed and controlled.

How will a phased return to work be managed?

Roles and skills will have been identified as necessary to support the initial recovery phase, while less business critical roles are likely to be kept under review as progress is made. Resuming some level of operation will be perceived as a positive step but there are potential legal risks that need to be addressed.

A phased return means that choices will have to be made about who returns, and from August whether this is on a full-time or part-time basis (if home working cannot continue), and who stays at home furloughed. Employment law still applies irrespective. To avoid any legal challenge, employers need to be transparent about the selection criteria adopted to bring people back to work while others remain at home. It is essential that this process is documented, and the audit trail must be capable of demonstrating that selection is fair, based legitimate business reasons and is not discriminatory.

Is business ready to be scrutinised?

The government’s focus is now on a transition period, with employers starting to take back responsibility for the cost of their workforce. In the absence of further detail, it is unclear if employers will be required to justify decisions made to retain employees on furlough until the end of October. Employers may be required to justify their decisions made about keeping employees on furlough throughout the extended period. The furlough scheme is not there to avoid dealing with problem employees. At some point concerns will have to be addressed.

The furlough scheme extension will continue to protect many jobs as the economy recovers. While waiting to learn more about the changes to the scheme from August, from an employment law and people management perspective employers should now start to sketch out the future for its operations and the workforce.

FG Solicitors are experts in all areas of Employment Law and HR, and we can slide your business through the business recover stages. Feel free to call us on 0808 1729 322 for a no obligation discussions.

This publication is for general guidance only. Advice should be taken in relation to a particular set of circumstances.

 

 

THE CHANGING FACE OF WORK!

THE CHANGING FACE OF WORK!

For the last two decades the notion that innovations in industrial and manufacturing processes and a digitised professional services industry, would lead to a shorter working week and increased leisure time has been a common feature of work analysis in the United Kingdom.
The idea that we may all be required to work less or, at the very least,  differently has now been brought back into sharp focus by the current COVID-19 pandemic.  On 31 January, the UK saw the first reported case of viral infection and it can scarcely be believed that by 20 March, all restaurants, pubs, clubs, and indoor sport and leisure facilities were ordered to close.
On 23 March these measures were tightened further, with wide-ranging restrictions made on freedom of movement, enforceable in law. At the time of writing, it is inconceivable that there will be any relaxation of the current lockdown in the near future.

What does all of this mean for the world of work?

The arrival of COVID-19 took away control of the working environment and created an acute balancing act between economic survival and employee health & safety. The government’s introduction of the furlough scheme offers short term support for the current suspension of commercial activity but not a solution.
In the meantime, employers will be occupied with thoughts of business survival and once this is achieved some very real considerations as to what form the structure and dynamics of the workforce will take in a post COVID-19 era.

Will working from home become the new norm? Will there be a need to have offices and the cost of maintaining them?

If nothing else, COVID-19 has ignited a massive experiment in working life and is allowing businesses to test the various scenarios to see how well they would cope if the current enforced changes became a permanent reality in some form or another. Change of this magnitude will certainly require a cultural and psychological shift on both sides and great preparation will be required if it is to have any chance of success.
For most businesses, having an office is not merely a place to house its workforce, it is also seen as a symbol of success, serving as a magnet to attract custom and to recruit the brightest and the best. Some employers hold the view that true team working requires physical proximity which cannot be achieved through working remotely. It remains to be seen whether the experience and lessons learnt from imposed home working changes that view.

What about businesses with production processes that cannot be performed from home?

Will the push to drive down costs and recover commercial stability result in permanently reduced wages, reduced headcount, and increased outsourcing? These are only a few of the vexed questions employers will need to address during and post lockdown. The exploring and review of all scenarios begins now and employers are well advised to create, maintain and retain the figures and statistical information on which reliance can be based.
It should also be part of the current HR strategy for any employer with employees on furlough leave, to have an established method of global communication with them. COVID-19 has presented businesses with a sea of uncharted water to navigate and this will be the same for employees who are not only pre-occupied with staying safe but will also be concerned with what the future holds. Regular contact has an invaluable role to play in maintaining morale and motivation.

What is the position of the law in all of this?

The government has been keen to point out that the emergency measures introduced to tackle COVID-19 does not displace existing employment law. Even in these challenging times, employers that disregard existing law, do so at their own peril and at a time when they can ill afford to get it wrong.
It has come as no surprise that employers caught with the suddenness of the COVID-19 lockdown and the immediate impact on revenue have put employees into the furlough scheme with a 20 per cent reduction in pay. Employees faced with the prospect of losing jobs have agreed to this reduction with the mind-set that when they eventually emerge from furlough leave, wages will revert to their pre- furlough position. From an employer’s position much will depend on the terms of any agreement put in place to vary the existing contract at the time furlough leave began.
While it may be possible for employers to argue that any change was for a substantial reason justifying the change, maintaining that position in the absence of a proper consultation process may, post-lockdown, result in a demotivated workforce at precisely the time when full engagement is required. This, added to the cost and inconvenience of claims from employees will become a major and unwelcome distraction.
The acid test will be when the 80 per cent of government support is no longer available in the form of furlough leave, as to the level of redundancies that may take place in businesses as a result. At this point, processes will become vital if conflict is to be avoided. The spotlight will largely be on consultation obligations, individual and collective. The accuracy of information held in personnel files will also be of paramount importance in effecting risk-managed change.
It is a safe bet that the road to recovery will be long and challenging for both employers and employees. Returning to an optimised way of working will require enormous effort. Individuals may well be affected by bereavement, the uncertainty over the normal operation of schools will undoubtedly present challenges for employees with children. All factors which will need to be considered and managed when normal service is resumed.
For information and support please do not hesitate to contact Floyd Graham or a member of the Employment Law Team of FG Solicitors on 01604 871143 or visit our website for answers to frequently asked questions relating to COVID-19.

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.

Sports Direct: Failure to Pay National Minimum Wage – A Business Model With Exploitation at its Heart? (Part 1)

14184143 - green grass  uk pound symbol against blue skySUMMARY:  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 this month it has been announced that shareholders will be asked to vote on whether there should be an independent workplace review – we will have to wait until September to see how this latest chapter unfolds.

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.

On the back of the ever increasing publicity of how some high profile companies treat their employees, we have produced a two part series to enable you to assess whether your company is inadvertently making the same mistakes as those reportedly made by Sports Direct.  The first in this series explores the allegation that Sports Direct failed to pay its workers the minimum wage and sets out the law behind this complex issue.

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THE ALLEGATIONS:

HM Revenue and Customs (“HMRC”) are currently investigating allegations that Sports Direct paid its workers less than the National Minimum Wage (“NMW”) effectively saving the Company millions of pounds per year.

The underpayment allegedly arose as a result of workers being forced to undergo compulsory rigorous security checks at the end of their shifts as a theft prevention measure, adding as much as 15 minutes onto their working day (or up to one hour and fifteen minutes to their working week), which is unpaid.

In addition, it is also alleged that workers faced a 15 minute deduction from their pay for “clocking on” 1 minute after their designated start time, even if they actually arrived on site on time.

WERE THE SPORTS DIRECT STAFF WHO WEREN’T EMPLOYEES ENTITLED TO NMW?

All employers are obliged to pay the NMW regardless of their size, and the NMW applies to all “workers” ordinarily working in the UK who are over compulsory school leaving age, not just employees.  This includes agency workers and apprentices.

WHAT ARE THE CURRENT NMW RATES?

From 1 April 2016, there are now 5 rates of NMW:

CATEGORY   RATE (£)
National Living Wage Workers aged 25+

7.20

Standard Adult Rate Workers aged 21-24 (inclusive)

6.70

Development Rate Workers aged 18-20 (inclusive)

5.30

Young Workers Rate Workers aged under 18 but above the compulsory school age

3.87

Apprentice Rate Apprentices either:

  1. Under the age of 19; or
  2. Aged 19 or over, but in the first year of their apprenticeship

3.30

HOW DO I DETERMINE IF MY COMPANY IS PAYING THE NMW?

In order to determine whether the NMW is being paid to your workers, you will need to determine their average hourly rate of pay.

On the face of it this calculation seems quite a simple one – sadly, this is not so. The average rate of pay is calculated by dividing the total amount of “money payments” that a worker earns across the relevant reference period, by the number of hours the worker has worked during that same reference period. However, what amounts to a “money payment” frequently trips up the uninitiated – see below.

The number of hours worked (known as “working time”) can also prove a tricky area for companies and one which has given rise to a raft of case law on its own. This is dealt with below.

Turning then to the relevant reference period, this is usually one month and cannot be greater than one month. However, if the worker is paid weekly or daily, then this is their reference period.

What Money Payments Should Be Considered?

Companies must exercise caution as some payments cannot be included as “money payments” for NMW purposes:

EXAMPLES OF INCLUDED PAYMENTS Basic salary
Bonus**An annual bonus paid for example in December, will usually only count for the December reference period
Commission/Incentive Payments Based on Performance
Accommodation Allowances
Allowances Paid by HMRC Dispensation Agreements
 

EXAMPLES OF EXCLUDED PAYMENTS

Benefits in Kind
Loans Given by the Company
Advances of Wages
Pension Payments
Lump Sum Payments on Retirement
Redundancy Payments
Tribunal/Settlement Awards
Premiums Paid for Overtime/Shift Work
Expenses
Tips and Gratuities

What About Deductions From Pay?

Certain deductions from a worker’s pay can reduce their pay for NMW purposes, including deductions made by a company in respect of expenditure in connection with carrying out their duties (e.g. the cleaning or purchase of uniforms). After these deductions have been taken into account the worker must still be left with at least the NMW.

Another famous retailer, Monsoon, was ordered to pay more that £100,000 to its employees in 2015 as a result of its practice of requiring staff to wear Monsoon clothes at work and deducting the discounted cost of the clothes from their wages. After the deduction, staff were left with less than the NMW.

Conversely, certain deductions do not reduce a worker’s pay for NMW purposes such as a deduction permitted by the contract between the Company and the worker due to misconduct.

In the case of Sports Direct, it has been reported that deductions were made from workers’ pay for lateness. If the deductions were not permitted by contract, the deduction would reduce the workers’ pay for NMW purposes.

A deduction of this nature could also amount to an unlawful deduction of wages, allowing the worker to bring a claim in the Employment Tribunal.

What Is Classed As Working Time?

Finally, a key issue for the Sports Direct case is what is actually classed as working time?

Working time is defined as any time during which a worker is working, at their employer’s disposal and carrying out their duties. There has also been recent case law demonstrating that, for those workers without a fixed placed of work, travelling time to their first assignment of the day and travelling time from the last assignment of the day may count as working time.

Against this legal backdrop, should the time spent by Sports Direct workers undergoing compulsory security checks be considered working time that is counted for NMW purposes? It is highly likely that the answer to this question is “yes”.  This is because workers are not free to leave the company’s premises until the compulsory security checks are completed.

How Can Your Company Avoid A Similar Fate?

Those companies operating in sectors where payment of the minimum wage is prevalent often adopt a proactive stance and schedule annual reviews to ensure legal compliance in this respect. These reviews can be linked to annual pay reviews or can form part of wider audits which align HR strategies to deliver the businesses’ objectives.

In any event, and at the very least, all companies need to:

  • have an awareness of the current NMW rates which are updated twice a year;
  • understand what payments can be included for NMW purposes; and
  • understand what counts as working time for NMW purposes.

This then enables a company to identify any risks which may arise on the back of the publicity surrounding high profile NMW cases such as Sports Direct; at the very least this will enable that company to tackle those risks head on.

CONTACT DETAILS:

If you would like more information on this topic, audits 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.

The Rio Olympics Are Approaching…What Should Employers do to Prepare?

22444484 - sport icons on computer keyboard buttons original illustrationThe countdown to the Olympics is now in earnest with the opening ceremony just a few days away. Over the coming weeks 306 events are scheduled to be held in Rio. If they have not done so already employers should be considering the potential effects of this four yearly event on their business.  A key priority is ensuring employee attendance. Unlike the 2012 Games in London, few employees will have tickets, but many will intend to watch the Rio Games on the television or internet.

What can employers do to prepare?

  • Decide on a policy for dealing with annual leave requests during the period the Games are on.  If the normal holiday request procedure is to apply, employers should remind employees of this.  If new procedures are to be put in place which simply cover the period the Games run for, highlight these to employees and ensure they are applied consistently.
  • Issue a general reminder of the absence notification/management procedures. That reminder to include a warning that employees 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 closely monitored to enable the early identification of any high levels of sickness absence.
  • Flexible working may be a consideration which may enable employees to come in later or finish earlier. Considerations can also be given to whether employees can be permitted to swap shifts. Any flexible working arrangements should be carefully handled and recorded to ensure consistency of treatment and to ensure they run for the duration of the Games only.
  • Consider making available a television in a communal area to permit employees to view the Games at work.  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.  A number of employees simultaneously watching the games via an internet connection could cause disruption and negatively impact business continuity.  If making a communal television available, employers should highlight that employees will be expected to make up the time spent viewing the Games.
  • There may be an increased use of Social Media such as Facebook or Twitter or websites covering the Games. 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.

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 as the Games approach
  • Fair and Consistent  – in particular with respect to the way in which requests for time off are dealt with

Contact Details

If you would like more information or advice on business continuity planning for the Games, absence management or disciplinary procedures 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.

Should Employers Take The Gender Pay Gap Seriously?

wage-gap-concept-blue-symbolizing-men-red-womenSUMMARY: A failure to address gender pay gaps can create both financial, legal and reputational risk for employers. We answer some frequently asked questions about equal pay.

Do we have to pay men and women the same?

The law provides that men and women should be treated equally when doing “equal work”.  This means men and women must be treated equally in relation to their terms and conditions of employment if they are employed to do:

  • like work. This means work that is the same or broadly similar;
  • work rated as equivalent under a job evaluation study; and
  • work found to be of equal value in terms of effort, skill or decision making.

In order to establish if there is equal treatment or otherwise, there will need to be a comparison of the terms and conditions enjoyed by a member of the opposite sex working for the same employer, doing like work of equal value.

Employers should not forget that the equal pay law protects men too.  Women who are pregnant or on maternity leave have special rights when it comes pay, benefits and bonuses.

Is there any way of defending an equal pay claim?

It is open to an employer to defend a claim if it can show the reason for the difference is due to a genuine factor and is not based on the sex of the employee. Common factors would include a difference in geographical location, experience or qualifications.

Is it just pay that we have to ensure is equal?

The equal pay law covers all aspects of pay and benefits including:

  • basic pay;
  • contractual benefits, i.e., company cars;
  • holiday pay;
  • hours of work;
  • non-discretionary bonus payments;
  • non-monetary benefits;
  • pension benefits and access to pension schemes;
  • performance related pay and benefits, overtime rates and allowances; and
  • sick pay.

The following areas would not be covered by the equal pay law but could be challenged under the sex discrimination law:

  • discretionary bonus payments;
  • discretionary pay increases;
  • promotion; and
  • the terms of a job offer.

To avoid the risk of equal pay claims we are considering banning staff from talking about how much they get paid?

Whilst employers are able to impose some restrictions on their staff about discussions concerning pay, any ban on this type of discussion would be unenforceable, if the purpose of the discussion is to identify if there is unlawful pay discrimination. This means a gagging clause in a contract of employment will not be effective if its aim is to prevent this type of discussion.

Any disadvantage including dismissal suffered by the employee as a consequence of their disclosure about pay for the purpose referred to above will be unlawful victimisation.

Do we have to respond to a request from a member of staff asking for information about pay differences?

A person who thinks they may have an equal pay claim may submit questions to the employer to help them determine whether they have such a claim.    An employer is not legally obliged to respond.  Before making the decision not to respond, an employer needs to be aware that an employment tribunal can take into account any response, or lack of response as a contributing factor when considering the issue of discrimination.

An employer faced with a request for information will need to consider carefully the nature of any response it chooses to provide and any decision not to respond. In any event, if legal proceedings are commenced the employment tribunal may order the information to be provided.

Acas has provided guidance on the question and answer process – Asking and responding to questions of discrimination in the workplace.

Should we be aware of any additional legal requirements?

It is expected from October 2016 private and voluntary sector organisations with more the 250 employees will be required to publish information about the pay differences between men and women. The first reports will have to be published by April 2018.

These requirements do not apply to the public sector.

If we lost an equal pay claim, what are the sanctions?

Any claim by an employee can be brought during their employment or no later than six months after their employment has ended.  Any individual wishing to issue a claim would have to contact Acas to consider conciliation.

A successful employee would be entitled to:

  • a declaration that their rights have been breached;
  • payment of any arrears (in the case of pay); or
  • damages (in the case of a non-pay contractual term).

In most cases arrears of pay can go back up to six years before the date the claim was brought.

Any employer who loses any case in the employment tribunal can now be ordered to pay a financial penalty of between £100 and £5,000, which is payable to the government.

In some cases, a losing employer will be required to carry out an equal pay audit and publish its findings supported by a plan to avoid breaches occurring or continuing. The penalty for failing to carry out the audit is up to £5,000.

Contact Details

If you would like more information on good equal pay practices with a view to engaging with your workforce and to minimise the risk of claims, 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.

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.

Farewell EU – What Now?

Union Jack-01

“The will of the people must be respected” says Prime Minister David Cameron on the outcome of the UK referendum on membership of the EU. One can’t escape the view that this should read “the will of the people must be interpreted.”

As of 6.00 am today, we as a nation appear to have become victims of unanticipated consequences, and are now at the mercy of outcomes that are not the ones foreseen and intended by our purposeful actions. I fear that full appreciation of the consequences of our actions will not be achieved for some time as predictions indicate that it will take at least 2 years to achieve disentanglement from our European partners.

In the immediate haze of global reaction, currency free-fall, stock exchange hysteria and concern about future trading conditions with the remaining 27 member states of the European Union, there is a risk that UK businesses may defer undertaking a strategic review of the impact on their workforce resulting from Brexit. In the short term, the biggest risk to workforce productivity will be uncertainty, particularly for those members of the workforce that are EU nationals and those that are British nationals working throughout the EU, currently estimated to be around 1 million. The uncertainty could manifest itself in key individual members of the workforce exiting of their own accord to seek greater stability elsewhere. It is essential that individual businesses develop effective operational and communication strategies without delay!

As UK businesses grapple with the challenges of negotiating commercial trade agreements in the new post EU membership world of tariffs and barriers to entry, it is a realistic possibility that revenue streams will become less profitable and this may inevitably lead to a rebalancing of profit margins by reducing headcount. A strategic review now, if operational effectiveness is to be maintained, will be well worth the effort.

And what, I hear you cry, of existing EU Legislation? The short answer is that a lot of EU laws are already incorporated into our domestic legislation through Acts of Parliament and Regulations, while there may very well be some tinkering in the medium to long term, it is unlikely, in this employment lawyer’s view, that our exit from the EU will result in any wholesale overhaul of our domestic employment legislation.

When the dust finally settles on the UK’s exit from the EU, the issue of Border controls and immigration status will become a further challenge for UK business whether domiciled in the UK or within the EU and using UK labour. While this may very well be 2 years away, businesses are encouraged to consider the implications now and devise a strategy to deal with potential key skills loss, recruitment and succession planning.

For advice and assistance with any employment law, HR or corporate immigration issue contact FG Solicitors on 01604 871143 or visit our website at www.fgsolicitors.co.uk for further information.

Brexit – What Are the Consequences for Employment Law?

brexitSUMMARY: No one can know exactly what the consequences will be, but below are some of the areas we consider are likely to be affected.

What does the decision to leave the EU mean for employment law? This remains a personal view, as no one can know exactly what the consequences of the leave vote will be. It may be that nothing significant changes immediately (as EU laws form part of UK law), but the lack of a requirement to comply with EU law in the future is likely to shape future legislation and may lead to a reduction in workers’ rights. Here are some of the areas that we consider are likely to change in the foreseeable future:

1. Discrimination – A cap may be applied to compensation for discrimination claims; successful claimants can in theory be awarded uncapped compensation at present.  One of the most extreme examples of this is when a doctor was awarded £4.5m for successful sex and race discrimination and unfair dismissal claims in 2011.

2. Working Time There may be amendments in relation to the Working Time Regulations so that there is a less onerous burden for employers.  This is relevant in relation to holiday, rest breaks and rest periods and the 48 hour working week.  It may be that legislation will be introduced permitting workers to completely opt out of the Working Time Regulations.

3. Agency workers – There may be changes in relation to the protection which agency workers currently enjoy.  The Directive from the EU in relation to agency workers was not a popular piece of legislation and (amongst other things) requires employers to provide equal basic working and employment conditions for agency workers after 12 weeks’ work.

4. Data protection – There will need to be some discussion about the General Data Protection Regulation, which comes into force in May 2018, just before the earliest time (2 years) Britain can exit the EU.  This will replace the existing Data Protection Act and related legislation.  If Britain is to continue to trade with the EU, it will be expected to have minimum standards in place.

5. Redundancy consultation – There may be reduced redundancy collective consultation requirements.  For example, the timescales for consultation may be shortened and/or the threshold for the number of employees to trigger the need to collectively consult may increase from 20 to, for example, 100 employees.

6. Immigration There are likely to be immigration controls introduced for workers coming from the EU and entering the EU from Britain.

We will keep you updated as any changes are announced.

Contact Details

If you have queries on the above areas, 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.