Failing to Pay Minimum Wage?

HMRC's Top Ten Most Bizarre Reasons for Underpaying Staff

HMRC has published this list as part of a wider publicity exercise to raise awareness among employers and workers about rights to minimum pay. They make very interesting reading!

HMRC's Top Ten:

1. The employee wasn't a good worker so I didn't think they deserved to be paid the National Minimum Wage.
2. It's part of UK culture not to pay young workers for the first 3 months as they have to prove their 'worth' first.
3. I thought it was ok to pay foreign workers below the National Minimum Wage as they aren't British and therefore don't have the right to be paid it.
4. She doesn't deserve the National Minimum Wage because she only makes the teas and sweeps the floors.
5. I've got an agreement with my workers that I won't pay them the National Minimum Wage; they understand and they even signed a contract to this effect.
6. My accountant and I speak a different language - he doesn't understand me and that's why he doesn't pay my workers the correct wages.
7. My workers like to think of themselves as being self-employed and the National Minimum Wage doesn't apply to people who work for themselves.
8. My workers are often just on standby when there are no customers in the shop; I only pay them for when they're actually serving someone.
9. My employee is still learning so they aren't entitled to the National Minimum Wage.
10. The National Minimum Wage doesn't apply to my business.

Women Still Experiencing Discrimination when Pregnant

Government Proposes Enhanced Protection for Pregnant Workers

The Government has recently responded to a report by the Women and Equalities Committee. It referred to research which has found that 11% of mothers feel forced to leave their jobs, and has stated that it will "bring forward proposals to ensure that the protections in place for those who are pregnant or returning from maternity leave are sufficient".

Of course, women already have legal protection against discrimination due to pregnancy, so it will interesting to see what further measures can be introduced and whether they will be practical for smaller employers to take on board. Currently no timescale has been suggested for any changes, and we are likely to see a consultation exercise take place about proposed measures before any change in the law takes place.

It is worth noting that in the same document the Government has restated that Brexit "will not lead to a diminution of employment rights." 

Time to review staff contracts and handbooks?

When did we last take a look at your HR documents?

The New Year is always a time to consider the future.  To pause and take stock, and to plan for the year ahead.  This New Year it may be a good time for us to look again at your HR documents to check that they are still fit for purpose.  There have been many employment law changes over the last few years, and organisations change and develop all the time, so it is possible that your HR documents are ready for an update or a general refresh.

Do you have a robust social media policy that still makes sense in terms of the rapid changes we have seen in that field?  Do you have enough flexibility built into your contracts to allow you to vary staff's hours of work or location?  Are their job descriptions up to date?

If you need any help or would like to arrange a review please do get in contact.

Stress or Depression?

Stress and Disability Discrimination

Employers tend to get very nervous when an employee goes off sick with stress - particularly if the note from the GP states "work-related stress".  And quite rightly so, as this could indicate that there is a poor culture, maybe even a bullying culture, within the workplace. 

But sometimes employees will suffer stress in reaction to something at work that they are just unhappy about but which most people would consider quite reasonable.  It could be that they face disciplinary proceedings for misconduct or are being tackled over their under-performance.  It is also true to say that some employees will "swing the lead" and get themselves signed off with stress, because its symptoms are well reported and it is easy to persuade some GPs to sign them off on that basis.

It is unlikely, however, that any employee who suffers stress will be considered to be disabled in legal terms.  Unlike depression, which is a clear clinical condition which can be long term and can impact massively on someone's ability to carry out normal day to day activities, stress is normally of short-term duration and is a reaction to a specific event or set of circumstances.  In Herry v Dudley Metropolitan Borough Council, the Employment Appeal Tribunal considers this question and provides a very clear and in-depth analysis of the difference between the two conditions in the context of disability discrimination.  It also points out that confusion can arise when some doctors talk about employees suffering from "depression", when they actually mean "stress" or "anxiety", and the difficulty in establishing clearly whether a diagnosis of depression has actually been made.

Some employers and employees are reluctant to talk about stress, but it's normally best to treat it as you would any other illness, and try to talk openly to employees who disclose that they are suffering.  With support and the right treatment its effects can be well managed and any impact on work is often short-lived.

If you need any help with this aspect of people management, please contact us.

Rates for Statutory Sick Pay & Maternity Pay Frozen

Government Proposed no Increase in Family Friendly and SSP

Last month the Government announced its proposal for benefit and pensions rates for 2016/2017.  This includes the statutory payments that employers are obliged to make for Sick Pay, Maternity Pay, Paternity Pay, Adoption Pay and Shared Parental Pay.  The current levels are to be unchanged for this year.  That is £88.45 per week for SSP and £139.58 per week for the other Statutory "family friendly" payments.

The lower earnings limit, which is the trigger for entitlement to these payments, will also be frozen at £112 per week.

Time to Review Staff Contracts and Handbooks

When did we last take a look at your HR documents?

The New Year is always a time to consider the future.  To pause and take stock, and to plan for the year ahead.  This New Year it may be a good time for us to look again at your HR documents to check that they are still fit for purpose.  There have been many employment law changes over the last few years, and organisations change and develop all the time, so it is possible that your HR documents are ready for an update or a general refresh.

Do you have a robust social media policy that still makes sense in terms of the rapid changes we have seen in that field?  Do you have enough flexibility built into your contracts to allow you to vary staff's hours of work or location?  Are their job descriptions up to date?

If you need any help or would like to arrange a review please do get in contact.

Apprentices and Other Young Workers

Working Time for Young People - Are you Complying?

 

It is relatively common knowledge that the Working Time Regulations state that workers cannot be compelled to work more than 48 hours per week, calculated as an average over 17 weeks.  Most people also know that workers are able to opt out of this restriction, so that they are able to work long hours on a regular basis and thereby benefit from a higher income.

 

But many employers are unaware that this does not apply to young workers, including some apprentices.  Young people are defined as those who are over school-leaving age* and are under 18.

 

Young workers are not allowed to work more than 8 hours in any day, and no more than 40 hours in any week.  This is not worked out on an average basis, it applies to each individual day and week.  They are also entitled to at least a 30 minute break in any day when they work longer than 4.5 hours.  Young workers are also not permitted normally to work between 10pm and 6am.

 

There are some exceptions to these restrictions, but they are few and far between. There are also health and safety measures that apply to young workers, to take into account their relative youth and lack of experience, compared with adult workers.

 

Please get in contact if you would like any more information about employing young workers.

 

(* in England young people can leave school on the last Friday in June if they will turn 16 by the end of the summer holidays)

Government Proposal for Extended Family Leave

Shared Parental Leave to be Extended to Working Grandparents

 

Last month George Osborne announced plans to extend the still relatively new right to Shared Parental Leave to take into account the extended family.  It is intended that this right will be extended beyond just mothers and fathers, to include working grandparents.

 

Shared Parental Leave is still currently "bedding in" and, anecdotally at least, there does not seem to be much take up of it at the moment.  Women are still tending to take their full maternity leave entitlement, without sharing some of it with the father, as is provided for under the Shared Parental Leave arrangements.  So it is unclear how much take-up there will be from working grandparents.  However, it is possible that take-up may be higher for grandparents, as many of them may be in lower paid jobs, as they head towards the end of their working life, and may be in a better position to take time off unpaid or at the statutory level.  Many fathers are still the main wage earners, or are on a par with the mother, so it is not always so attractive for them to take this time off.

 

The Government will consult over this proposal next year, with a view to introducing it in 2018.  So watch this space!

New Fit For Work Scheme Fully Rolled Out

Will Employers Find the New Scheme Beneficial?

 

The Government's Fit For Work Scheme is now available across the UK.  GPs and Employers are able to refer employees to the Scheme when they have been off work sick for 4 weeks.  Employers will need to seek the employee's written consent before any referral and Fit for Work needs consent from employees before they share any information with employers.

 

The aim of the Scheme is to encourage employees to get back to work sooner rather than later. For small to medium sized employers it may serve as an alternative to more costly occupational health services.  Fit for Work is free (it is funded by the Government from the savings made when it stopped refunding SSP to employers).

 

Fit for Work will carry out an assessment of the employee and will seek to draw up and agree with the employee a personalised return to work plan.  This will be provided to the employer who will then need to consider whether it is able to accommodate the return to work plan.  This may consist of a phased return, reduced or altered duties, a period of working from home, changes to the workplace or work station for the employee, extra support or supervision, etc.  The employer is not obliged to follow the return to work plan, and in some cases it may not be feasible due to a lack of resources, cost, the difficulty with restructuring work, etc. 

 

It will be interesting to see how effective the Scheme is.  This will depend very much on individual circumstances, but one benefit that we can see immediately is that intervention will happen at a relatively early stage - after just 4 weeks' absence.  Previously an employer would be reluctant to seek medical information at such as an early stage because of the cost of a medical report or of a referral to an occupational health specialist.  After just 4 weeks it is often unclear if the employee is heading for a prolonged period of absence or is likely to return in the near future, so this Scheme should help speed things up a little.

Voluntary overtime may need to be included in holiday pay calculations

Holiday pay and how it should be calculated remains one of the most hotly debated questions in the world of employment law.  The Northern Ireland Court of Appeal has recently added to this debate by suggesting that it may be necessary to include an amount to cover overtime pay that the employee would miss by being on holiday, even where there is no obligation to work any overtime and they do so on a completely voluntary basis. 

As we reported in January, the Employment Appeal Tribunal has previously ruled in Bear Scotland v Fulton that non-voluntary overtime should be included in many cases, but there has been a lack of clarity on when this obligation arises.  In the Bear Scotland case, the employees in question were obliged to work overtime and did so pretty much every week.  So it appears sensible that they should receive holiday pay equivalent to the pay they would normally receive (including overtime).

What it all boils down to is that staff should receive their normal week's pay for a week's holiday.  If they have contracted hours and stick to those every week, then their normal pay is clear.  If they work overtime pretty much every week, then it is likely that will need to be taken into account when working out holiday pay (by taking an average of their pay over the 12 weeks preceding the period of holiday).

Where overtime is worked on a much more sporadic basis, then it may be possible to argue that holiday pay should just be the basic pay with no adjustment for overtime. It could be argued that they often work just their basic hours and receive their basic pay for those weeks, so they are not losing out by being paid the same amount for a week's holiday.

It seems unlikely that we will ever receive an exact answer to this question from the courts; they will always decide on these sorts of matters based on the specific facts of the cases brought before them.  As an employer, therefore, you need to consider whereabouts on the spectrum of overtime plus basic hours your staff fall and decide on the best approach accordingly.  Please get in contact with us if you would like any further advice on this matter. 

The importance of Social Media Policies

The recent Employment Appeal Tribunal (EAT) case of British Waterways Board v Smith demonstrates how important it is for employers to have a comprehensive social media policy.  

Some employees are unaware that comments they post on social media sites can be seen widely, or sometimes they may be aware and simply don't care.  Most of the time that will not matter, but when they make comments relating to the workplace, colleagues or customers, then this can become a serious disciplinary issue.

In this case, Mr Smith had posted comments on Facebook about his supervisors and managers which were extremely offensive.  In addition, he had stated on Facebook that he had been drinking alcohol at a time when he was on call - the employer's rule was that employees were not allowed to drink any alcohol when on call.  Whilst he claimed that he was unaware that his Facebook settings meant that his posts were public, and that the comments about drinking were untrue and mere banter, the EAT found that his subsequent dismissal for gross misconduct was fair.

The employer had investigated the matter thoroughly and concluded that Mr Smith's actions were very damaging, as any member of the public could see that he was bragging about drinking whilst on duty, which could result in a loss of trust in the organisation and damage to its reputation.  The employer also concluded that it had lost trust and confidence in the employee because of what he had posted.  The comments he had made about the senior staff would make it very difficult for them to have a reasonable working relationship.

If you don't already have a social media policy, or if you think yours may need updating, please contact us for assistance

Restrictions on Zero Hours Contracts

Prohibition on Exclusivity Clauses Finally Becomes Law

We reported in July 2014 on the Small Business, Enterprise and Employment Bill which, amongst other things, would make unenforceable any clause in a zero hours contract which prohibits the employee from doing work for anyone else, or where they have to obtain permission from their employer to do so.  This finally become law on 26th May.

Anti-avoidance measures are still to be introduced to try to stop employers getting around this ban. These measures will be coming out in the near future, but further details of them are to follow.  So far it appears that the ban on exclusivity clauses will apply also to contracts which guarantee only a limited weekly income - the threshold level of income has not yet been set, however. Also workers on zero hours contracts (or those earning below the weekly income threshold) will be protected from suffering a detriment on the grounds that they sought additional work elsewhere.  If they do suffer a detriment, they will be able to bring complaints to an employment tribunal.

We will let you know when these measures become law.  

Sexual Orientation v Religious Belief Discrimination

Baker guilty of direct discrimination over "Gay Cake"

Many of you will have heard of the recent case in Northern Ireland of a baker refusing to make a cake that carried a message in support of same sex marriage.  Whilst this is a case relating to the provision of goods and services, the key themes apply also to the field of employment law.

Ashers Bakery is run by a husband and wife team, the McArthurs, who hold very strong christian beliefs.  They decided not to accept the order for the cake because they felt that using their skills to produce the cake conflicted fundamentally with their beliefs. They were against same-sex marriage because, as Mrs McArthur stated, they believed that "the only divinely ordained sexual relationship is that between a man and a woman with the bonds of matrimony...Marriage is also to be between a man and a woman." 

The Court found that this amounted to direct discrimination against the plaintiff, Gareth Lee. They refused to provide the service to Mr Lee on the grounds of sexual orientation. They were not able to rely on their own religious belief as mitigation.

This case adds to a mounting number which bring religious belief and sexual orientation discrimination into apparent conflict. At the end of the day, it is always going to be unlawful to discriminate against someone directly because of their sexual orientation or because of their religious belief. And it is unlikely that any defence will get very far if it is to say that the discrimination was justified because of your own religious belief (or sexual orientation).  

The Living Wage

Are Employers Obliged to Pay Staff the Living Wage?

Boris Johnson, as the Mayor of London, has been a very vocal promoter of the Living Wage.  But what is it and how does it affect employers?

To be clear, the only statutory minimum level of pay that employers are obliged to give their staff is the National Minimum Wage (NMW).  The NMW rates are set out in the table below, with the standard adult rate currently set at £6.50 per hour.

The Living Wage is a level of pay somewhat higher than the NMW.  Campaigners say it is the lowest amount people need to earn in order to avoid living in poverty.  The current rate is £7.85 per hour (£9.15 in London).  It is reviewed annually by an independent body, and set by the Living Wage Foundation.  Unlike the NMW, there are no variations to the rate dependent on the employee's age.

Employers in traditionally low paid industries may choose to pay the Living Wage for a number of reasons, including to improve recruitment and retention, to engender good staff morale, and to promote themselves as socially responsible employers.

You can read more about the Living Wage at the Living Wage Foundation's website. 

Employment Law and the Election

Employment Tribunal Fees

One of the most dramatic changes to the employment law environment under the outgoing parliament, is the introduction of employment tribunal fees in 2013. Claimants now have to pay £250 in order to bring most types of claim to a tribunal, and a further £950 in order for their claim to proceed to a hearing.  This has resulted in a massive drop in claims, as many individuals who have just lost their job are unable to to pay these fees. 

Whilst this has been good news for employers, it does seem as if access to justice may have been curtailed for a number of genuine claimants.

It will be interesting, therefore, to consider what may happen to the employment tribunal fees under a new government.  Below, I have set out in brief the tack taken by the main political parties in their manifestos:

• Conservative

As they were the main drivers behind the introduction of fees, it is perhaps not surprising that they do not make any proposal to change the current system.

• Labour

"The Conservatives have introduced fees of up to £1,200 for employment tribunal claimants, creating a significant barrier to workplace justice. We will abolish the Government's employment tribunal fee system as part of wider reforms to make sure that affordability is not a barrier to workers having proper access to justice, employers get a quicker resolution, and the costs to the tax payer do not rise."

They do not mention, however, whether they will replace the system with a new one - perhaps by reducing the fees - or whether they will be scrapped altogether.

• Liberal Democrats

"We will...Improve the enforcement of employment rights, reviewing Employment Tribunal fees to ensure they are not a barrier." 

So any potential change will be dependent on the outcome of a "review".

• Green Party

"We will...reduce Employment Tribunal fees so that tribunals are accessible to workers."

A clear commitment to a reduction but no indication of by how much.

• UKIP

They make no mention of employment tribunal fees.

Is Obesity a Disability?

A report last summer on a case before the European Court of Justice (ECJ), suggested that an obese person may be classed as disabled for the purposes of equality legislation.  The Northern Ireland Industrial Tribunal has now followed the ECJ approach to this question in the case of Bickerstaff v Butcher.

Mr Bickerstaff was harassed at work by colleagues, including Mr Butcher, because of his weight.  He was morbidly obese, having a body mass index of 48.5, and suffered from poor health as a consequence.  He would be short of breath after only minimal exertion, and suffered from sleep apnoea and gout.

The medical evidence indicated that Mr Bickerstaff could end his morbid obesity after only 6 months, if he took active steps to lose weight.  However, there was no guarantee that he would do so.

The Tribunal took the same approach as the ECJ in ignoring the fact that the Claimant's obesity was self-inflicted and could probably be remedied if he were to take active steps to lose weight.  Instead it looked at whether his condition hindered full and active participation at work, which it clearly did.  Therefore, the Tribunal found that he was disabled for the purposes of the Equality Act, and that the harassment he had suffered was for a reason related to his disability, making it unlawful.

This case highlights the need to have an effective harassment policy in place, which aims to prevent harassment at work for any reason.  Managers also need to ensure that they take active steps to stop bullying in the workplace, including encouraging those who feel they are being bullied or harassed to report their concerns immediately.  

New Entitlement to Shared Parental Leave and Pay

Parents of children due (or placed for adoption) on or after 5th April 2015 may be entitled to up to 50 weeks' Shared Parental Leave (SPL).  They will need to have worked for at least 26 weeks and will need to satisfy certain earnings thresholds to qualify.

In order for SPL to be available, the mother (or main adopter) will need to give up some of their 52 weeks' Statutory Maternity or Adoption Leave. Whatever remains from that 52 weeks can be converted into SPL. The parents can opt to take this leave in any number of ways - they can take it together or separately; they can also take it in several separate chunks (of no less than one week) as long as the employer agrees to that approach. All of the leave must be used up within one year of the the child's birth or placement for adoption.

There are some quite detailed notification procedures that have to be followed by the employee.  They must give at least 8 weeks' notice of the intended start date for any period of SPL and will need to provide certain information about their partner (who may not be your employee, of course) in a signed declaration. The employer can also request further information in order to satisfy themselves of the employee's eligibility.

Employer and employee may need to meet to discuss the requested SPL, so employees will be encouraged to plan ahead as much as possible. Employers do not have to agree to requests for discontinuous SPL (i.e. where it is not to be taken in one block) but they must agree to requests for continuous leave.  

Employees can give 8 weeks' notice to change any SPL that is booked.  They can also give separate notices for separate periods of continuous Leave. They are permitted up to 3 notices (either to take SPL or to vary SPL already booked).

Most employees will also be eligible for Shared Parental Pay.  This is the same amount as the flat rate for Statutory Maternity Pay (SMP) (currently £138.14 per week).  The total period of statutory payments is 39 weeks, so the number of weeks of Shared Parental Pay will be whatever number of weeks' SMP (or Adoption Pay) remain unused.

Each employee has up to 20 Shared Parental Leave in Touch days. These are similar to the 10 Keeping in Touch days currently available to those on maternity or adoption leave, in that the employee does not have to take them and the employer does not have to allow them. 

Finally, Additional Paternity Leave will be replaced by SPL but the two-weeks' Statutory Paternity Leave still remains in place.  So some fathers may choose to take 2 weeks' Statutory Paternity Leave on the birth of their child followed by 50 weeks' Shared Parental Leave (where the mother agrees to this).

In reality, there has been very little take up of Additional Paternity Leave since it was introduced in 2011 so it is possible that this new type of leave will also be rarely used, with the majority of mothers still taking leave. However, it is a major step forward and the Government argues that giving parents the choice to share leave will make a big impact in number of cases where it is exercised. Let's wait and see!

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Basic Steps to Help You Keep On Top of Sickness Absence

We are often surprised at the number of small employers who have no system for recording sickness absence.  Some will ensure that they ask for medical certificates if the period of absence exceeds 7 calendar days (in accordance with the Statutory Sick Pay (SSP) rules) but many do not have any sort of recording tool for short-term absence.

The problem for employers who do not record absence is that they find themselves in a difficult position if and when they feel they have a problem with an employee taking too much time off.  If this has not been recorded, all they have is a general feeling and a problematic lack of evidence.

Sickness recording systems do not need to be complex. All that is required is a simple form to record the dates of absence and the nature of the illness/injury.  A simple spreadsheet can then be used to record it for each employee and the form can be filed in their personnel file (make sure it is kept securely).  It is then just a case of having a look at the spreadsheet on a regular basis (e.g. quarterly) to see if anyone is taking a lot of time off.

If you feel one of your employees is taking too much time off sick, you are then able to address this with them by showing them the record and having a discussion about it.  At this stage you would deal with it informally to try to find out whether there may be any underlying cause (which could indicate a disability and a need to tread carefully), or whether they are just the sort of unlucky person who is frequently sick (or perhaps the sort or person who goes off sick at the slightest snuffle, or even perhaps someone who "swings the lead").  The outcome of the meeting would normally be an informal warning to explain that you expect an immediate, substantial and sustained improvement in their attendance or you will need to consider commencing disciplinary proceedings on the grounds of capability (or under a separate capability procedure if you have one).  Unless you had clear evidence you would not be questioning whether the sickness absence is genuine, it would be a case of explaining that the business is unable to sustain this level of absence which is why you need to address it.

That is often enough to nip the problem in the bud.  If staff know that you are going to address their sickness absence, they may well think twice before calling in sick unless absolutely necessary.

Other tools that can help change a lax sickness absence culture are:

• return to work interviews every time someone comes back from a period of sickness absence no matter how short
• strict rules about phoning in when they are off sick (e.g. phone calls to the boss, rather than a message via a colleague, or a text message)
• paying SSP only (although you would need to ensure you were paying in accordance with any contractual obligation)

Right to Time Off to Accompany Partner to Ante-Natal Appointments

The partner (male or female) of a woman expecting a baby will be entitled to unpaid time off in order to accompany her to up to two ante-natal appointments.  The employee does not need to have worked for you for any particular period of time, it is a right that they enjoy from day one.  

There is no minimum notice requirement in the legislation, but it does state that an employer will only be liable where it has "unreasonably refused" a request for time off.  This suggests that a tribunal may find that an employer has not unreasonably refused a request where it has been presented at the eleventh hour and it is not practicable to find cover for the time off requested at such short notice. 

Whilst some employers may feel that they do not wish to advertise this new entitlement to their staff, they may wish to consider including it in their staff handbook and encourage employees to make their request in a particular format and by giving as much notice as possible.  If an employee then breaches this written policy and is refused their request, it is unlikely that the refusal would be found unreasonable in all the circumstances.