Webinar: UK changes in employment legislation in 2014

Peninsula Team

May 07 2014

Each week, Peninsula Business Services invite business owners, finance directors and senior management to take advantage of our national program of FREE Employment Law and Health & Safety Webinars. [avatar user="chadwicka" size="thumbnail" align="left" link="https://www.peninsulagrouplimited.com/blog/author/chadwicka/"] April will, as usual, be a busy month for changes in employment law, specifically in terms of tribunal procedures. Amanda Chadwick will advise you on what the changes are, what you need to do to ensure implementation. Amanda will also explain how the changes impact you and your management and what training you need to ensure, that as a business, you are complying with the law.
Contact Peninsula online for advice on this issue, or call us on 0844 892 2772 24 hours a day, 7 days a week, 365 days a year.
Click Here for the Video Transcript:
Good morning everybody, hello, and welcome to today's webinar. Today is Wednesday, the 2nd of April, it's 1100 hours, and we're going to talk about lots of legislation changes that are coming in, and also some trends as well that we're seeing on our advice line. I'm Amanda Chadwick; I'm a senior speaker at Peninsula business services limited over in Manchester. And we currently help and integrate ourselves with 28,000 clients throughout the UK, helping them with employment law, HR issues, and also police assistance programs.So let's get cracking, because this is a jam-packed webinar on legislation changes.So the trends we see at the moment are advice line, flexible working hours because we have the change coming in on the 30th of June, which I will talk about shortly. We're seeing calls made from businesses that are concerned about people using their mobile phone both personally and for work use in the work place and how to use mobile phone policies in, and what can they say and what they can't do, and just a top tip here: just be careful if you've tracking devices on there, you track your stuff, you make sure you put it in the contract. Data protection issue here. Remember, you can have what you want in your contract as long as it's reasonable. So for sure, make sure you can say to somebody, “Don't use your mobile phone at work,” but have a written rule for that. Social networking, lots of calls on social networking, internet policies, and make sure you look at your business needs and what's required by your business when you write these policies. Other questions: IPods. IPods in the workplace, people using them, health and safety risk, have something written down. People are asking us about search policies and searching the staff. Drugs and alcohol and always, always, even from the most experienced HR expert on disciplinary procedures as well. “Are we doing it the right way? Are we going down the right route? Should we do this, should we do that?” Capability sickness absence, we're going to cover that again, because the government's got a major focus on that. Zero Hour, because of its cable, we're going to talk about that, and also pensions which we're going to cover as well. These are trends and conversations that we're having on our advice line from our client's questions, but also at our seminars as well. So the first thing to talk about really is the flexible working right. And before I even talk about the slide here, do not be frightened with the new requests that are going to come in on the 30th of June, do not be worried about it. Remember this: there's a procedure to follow. It might be a good idea to remind your staff of that procedure. And remember, when someone says, “Can I work flexible hours?” Remember to document everything, tell them to apply in writing; they have to put their case forward. You respond in writing and keep a note of all these letters that you're writing. This is your defence if somebody says they didn't consider that request. Remember, the new date has been announced with the implementation of the extension to flexible working after implementation was postponed earlier this year. The extension will now take effect from Monday the 30th of June, 2014. What this means for you, really, is from the 30th of June, 2014, almost all eligibility criteria for making a request for flexible working will be removed. As long as the employee has 20-week service at the date of the request, and there's not made a statuary request within the previous twelve months, they will be able to make a statuary request to adjust their working pattern. The employee will no longer need to be apparent or have any care and responsibilities to make a request. And the request can be made for any reason. It does not have to be in relation to a child or other dependents, so remember that as an employer. Now, I know a lot of business owners that will not keep up to date with legislation. Somebody will go up to them and say, “Look, I want to do flexible hours.” And just go, “are you joking? You haven't got any kids?” They're just not keeping up to date with it. I'm warning you now, keep up to date, know that they have the right from the 30th of June, know there's a particularly to follow, tell them to put the request in writing, consider that request in writing, and then what you need to consider is the impact in morale on your business anyway. So what I would say to is definitely look at other avenues of work. It may that you want to do a job share night work as part time work, mobile work, the choice is yours. Don't just consider flexible working to be a part time job, there's all sorts of other stuff people can do. Remember though, if you agree to flexible working, you may have to change somebody's statement of main terms, and make sure you do. The amount of companies I walk into to assist, they turn round, and then they've actually made the change years earlier, but they haven't actually reflected that in the Terms and Conditions. So, we now look at the national minimum wage. It has been announced that it will increase in 2014. The government has confirmed the increase is to the national minimum wage to take effect from October of 2014, right. What I would say to any employers listening to me, if you've got friends in business to consider the wages that they're paying their staff at the minute. What you do not want is to leave your staff with no pay rise and the minimum wage takes over what you're paying your staff. To be very cautious about the wages you pay. You might want to do a check annually just to make sure you're spot-on.  Okay. So these are the increases as follows:
  • Age 21 and over, this is to increase from 6 pound 31 to 6 pound 50 per hour.
  • Age 18 to 20, to increase from 5 pound 3 pence, to 5 pound, 13p per hour.
  • Over compulsary school age to 70 to increase from 3 pounds 72, to 3 pounds 79 per hour.
The apprentice rate is to increase from 2 pounds 68, to 2 pounds 73 per hour. Remember here, though, the apprentice rate is paid to apprentices who are under 19 or who are 19 and over, but in the first year of that apprenticeship, apprentices who do not fall into this classification, are entitled to receive their appropriate age-related rate as above. So what does this mean to you? Well from October, 2014 employers will need to ensure that all of their workers are paid, on average, over the pay reference period at the rates shown above in accordance with each worker's age. Non-compliance with the national minimum wage legislation will result in a claim to an employment-like tribunal. I can bet your bottom dollar, or HNRC enforcement. And you know what? You can go back six years to make that claim. So, that's caution for you, October 2014. So, on the back of that, we've got stronger, national minimum wage fines in place now. The maximum penalty for an employer in relation to on non-compliance with the national minimum wage, legislation has increased, that was from the 7th of March this year. Previously when an employer was found by HMRC to breach national minimum wage legislation, there is created by the underpayment had to be made good by the employer. A penalty was also applied which was 50% of the total underpayment. The penalty has now increased to 100% of the total underpayment to a maximum of 20,000 pounds. So what does this mean for you? There are two ways that non-compliance with the national minimum wage law can be dealt with. The worker involved may bring a claim to an employment tribunal, or the HMRC may conduct a check. HMRC offices have a right to conduct a check at any time, or can instigate a check if a worker has complained to do them. If enforcement is done by HMRC, they may issue a notice of underpayment which requires the employer to make good the deficit between what has been paid and what should have been paid. A penalty will also be due. This recent change has increased the level of penalty payable, so therefore, this reinforces the need for employers to be aware of national minimum wage rates, and also the calculation of whether has been paid national minimum wage which is not straight forward. So caution again here: I want you to have an audit in place, make sure people are being paid the national minimum wage or above, so make sure you do your audits regularly. So what we've got now is the employment tribunal fee reimbursement. Okay, the Ministry of Justice of is expected to publish information on their website in the near future which sets out clearly the stance on fee reimbursement for an employer who unsuccessfully defends a claim at employment tribunal. The guidance will say that the general position on fee reimbursement is that a successful employee should expect to recover the fees from an employer that he or she has incurred. This is indicated as part of the unsuccessful review of the introduction of the employment tribunal, and EAT fees requested by trade union Unison. So what does this actually mean? Well, in July 2013 a system of employment tribunal fee charge was introduced -- you might remember this - which means that all claimants must pay a fee to bring a claim. And what happened, we saw a sudden surge in tribunals, and then a sudden drop. So we saw a surge, a backlog, and then we saw a sort of a drop. Because lots of these “no win, no fees” solicitors suddenly decided they weren't actually paying the fee, but now they've changed their minds, so their fingers are going back up again. The employment tribunal was, at the same time, given the power to order the fee paid out to reimburse the claimant by the employer when the claimant had won. The new stance makes it clear that it will norm for the employer to pay back the fee on top of the tribunal award and the financial penalty which we're going to cover in the moment. So, okay, so “beware” is the answer here. Be very aware, get things right. So, we have another change here: increase in rehabilitation periods. So we saw from, with effect, from the 10th of March, 2014, rehabilitation periods after which a criminal defence is considered spent, amended. Importantly, the adjustments will mean that some individuals will be able to class themselves as rehabilitated when, prior to this change that conviction would have remained unspent for the rest of their lives. For example, under the old rules, a period of imprisonment of more than 30 months was never spent, and would never be disregarded for employment purposes. However, under the new rules, only prison sentences of four years or more will remain unspent for life. Sentences of more than 30 months, but less than four years, will be considered spent from the point of seven years after the sentence has been completed.  Okay. So, let's hope courts aren't giving imprisonments to people for serious crimes and hope they buck their ideas up. So what this means is that employers are often interested in a perspective employee's conviction history when making a recruitment decision. Rehabilitation of Offender Law means that some convictions must be erased for the record for employment purposes after a set period of time. This means that the perspective employee is not required to disclose them. They are considered spent. This change in law amends the periods after which a conviction is considered spent generally in favour of the perspective employee. The new rules have retrospective effect, meaning that we now must deal with convictions and the new respective rehabilitation periods as though the new ones had always been in place. Okay? So be careful, check your application forms, check your information, your recruitment and the people you use to see what they have in place. So, also, what we're going to see within the next couple of days from the 6th of April is the new maximum tribunal awards and rates. The following maximum tribunal wards and statuary rates will then apply from the 6th of April. So for clarification:  where the rates relate to unfair dismissal, the new rates will apply where the effective date of termination is on or after the 6th of April, okay? So, this is what we're looking at: unfair dismissal compensatory awards. The maximum limit on unfair dismissal compensatory awards is 52 weeks' pay subject to an oval cap which will increase from 74,200 to 76,574. The maximum limit on a week's pay for basic award purposes will increase from 450 pound, to 464 pound. This means that the maximum basic award will increase from 13.5 grand to 13,920 pound. That's a lot of money, especially if you're a small business. Therefore, the total unfair dismissal award will increase from 87,700 pound to 90,494 subject to a 52 weeks pay cap. I might just take my employer to tribunal. I'm only joking, but that's quite a lot of money if you think about it. I think that's an absolute life-changing amount of money. So let's be aware of that: let's know what people are-- is available to people, but let's make sure we protect our business. Let's get things in place. So statutory redundancy pay, we've seen this now go up, okay? The maximum limit on a week's pay for statutory redundancy pay will increase from 450 pound, to 464 pound. This means that the maximum amount of statutory redundancy pay 13.5 thousand to 13,920 (that's 464 pound times thirty weeks). But I think you'll, when you do a redundancy selection, when you go through the process, anyway, I think most people always take advice to work out the calculations, to get it spot-on. And hopefully that person that you're getting the advice from will have the current rates available and give you the right payout. So, for the maximum limit on statutory guarantee pay will increase from 24.20 per day to 25 pound per day. This is paid in circumstances where the employer places the employee on lay-off or short time work and there is a workless 24-hour period. Remember when you're listening to me, people that are not Peninsula clients and even people that are, check that you have got a shortage work and layoff procedure in place in your handbook. Absolutely amazing business respite. The people that might, for no fault of their own, might not be able to pay wages, it gives your business respite where it lets you lay your staff off or put them on short time work and enabling you to worry about bringing money rather than worry about paying staff. This is business respite, you've got to have the policy in place, and otherwise you can't use it. Remember this; it is paid for a maximum of one working week in a three month period where the employer has reserved the right to reduce pay in these circumstances. Whereas a normal day's pay is less than a statutory guaranteed pay, than the normal day's pay should be paid instead. So what does this mean: well, employers will need to make sure that they are calculating payment correctly from the 6th of April of 2014 in relation to statutory redundancy pay and in layoff situations. The increase to the unfair dismissal compensatory reward raises the limit that an employee can win in an unfair dismissal claim when employment is terminated from the 6th of April, 2014 onwards. This digit is not applicable to claims heard on or after this date when the date of determination is before the 6th of April. So, an update on financial penalties: the new system of imposing financial penalties on employers who have unsuccessfully defended a claim on tribunal will take effect for all claims brought on or after the 6th of April. This means that the trigger event for the ability to impose a penalty is not the date of the employee's determination date, or the date of the act complained about, but the date a claim is made. The employment tribunal will have the power to order the employee who has unsuccessfully defended a claim at tribunal pay a penalty to the exchequer, not the claimant! The penalty will need to be in addition to any award, compensation provided by the tribunal, and the fee reimbursement, so it's over or above all of that. So you've got the fee reimbursement to pay, you've got the compensation award to be paid, you've now got to pay the fees of the claimant but now also on top of that, the tribunal will have the power to order that employee and will pay a penalty to the exchequer. The penalty will apply where there are aggravating features involved in a claim. So, there is no prescribed list which will be deemed an aggravated feature, but we know the tribunal is likely to take into consideration any of the following: the size of the employer, the bigger the employer, the more you should have known to get it right, the duration of the breach of the employment rights, “They've been treating me like this for weeks, months,” the employee and the employer's behaviour. Whether the action was deliberate or committed with malice, whether the employer is an organization with a dedicated human resources team. Where the employer has repeatedly breached employment right concerned, a tribunal may be less likely to find that there are aggravated features where an employer has been in operation for only a short time, so hasn't experienced with these matters as a micro business has only a limited human resource function, and all made a genuine mistake. So what this means, really, is the fact that trigger point for the application of financial penalties is the date the claim is bought, means the employer's making decisions now should do so in the knowledge that their actions may incur a 3-fold financial impact. So we need to know now that any decision that you're making right this very moment to do with employment or an HR will result or may result and have an impact on the future. And we're looking at compensation, we're looking fee reimbursement, and now we're looking at a penalty as well. So, I feel like a newspaper today. Labour calls for new TUPE rules to be annulled. Labour has tabled a motion in parliament calling for the collective redundancy and transfer undertakings to be annulled. These regulations brought about the changes to 2P in January, 2014. I'm going to stop here for a second and say: if you've ever, ever read TUPE you'll know how unbelievably complicated and boring a document it is, okay? If ever you're taking over a business, seek help, let them read it for you, interpret for you. But you need to abide by TUPE regulations, okay? These regulations brought about the changes to TUPE in January, 2014. Introduce a much more flexibility to employers when faced with a transfer of undertaking. So that means the sale of business or the change of a service provider. The early day motion is sponsored by Ed Miliband, but does not have much support, it has only 17 signatures. There are often used, probably his family, I don't know who's those 17 signatures are. They are often used to generate publicity for a particular campaign. More information will be provided if the motion progresses. So what does this mean? The call is for the annulment of the regulation and not repeal, a repeal would mean that they would be simply removed. But annulment would mean that their existence would be wiped from history as if they had never happened, and TUPE would revert to its pre-2014 states. It needs updating. This creates some uncertainty for employers who are currently working under the new flexible arrangements. However, it is not expected that the motion will be successful. Not with 17 signatures, it won't. So it a business, as usual, for now. So keep to the 2014 one we've got now, okay? This is just a little bit of a warning for you that they are making a motion. So case law developments, let's update you a little bit here. Lyon's versus DWP Job Centre Plus, dismissal for time off due to post-natal depression was not discrimination on pregnancy or maternity grounds. The employment appeal tribunals held that unfavourable treatment only amounts to discrimination under the pregnancy provisions under the Equality Act of 2010. If it occurs during the protected period, that means between the beginning of pregnancy and the end of maternity leave. Because the claimant's absence was after that period, it is not covered by the scope of pregnancy discrimination. Her dismissal was not deemed to be discriminatory because of the sex. Because if a woman suffers a pregnancy-related illness which extends beyond the period of her maternity leave, the employer is entitled to take into account the period of absence after the maternity leave and compare that period with any period of sickness of a man. Okay.  I don't know whether that's good or bad news, but it's just letting you know that's an update on the case law development with regards to maternity and post-natal depression after maternity leave has finished. So, we've got another case law development, we've got Punjab National Bank versus Gosain, covert recording of an employer's discussions admissible as evidence in a tribunal. The employment appeal tribunal decided that covert recording undertaken by an employee was permissible evidence at tribunal, particularly if the evidence does not form part of the employer's deliberations. The employment appeal tribunal stated the correct test to undertake a balance and exercise, setting the general rule of admissibility of relevant evidence against the public policy interest in preserving the confidentiality of private deliberations in the internal grievance and disciplinary context. Be very careful of this, though: because it's what's rational, it's what reasonable, and it really is, what does affect somebody's human rights? I always say to clients, that if you're going to record your staff, make sure you put it in the employee handbook because of data protection which is going to be awfully big news within the next 24 months. I would make sure that you have a policy that says that if you record staff, that you're doing it and that if you monitor computers, emails, or phone calls or you're doing it, if you track your staff, so we don't leave any surprises later on. And then we can use it as evidence. So what legislation changes in 2014? So on the 6th of April the early consolidation system will be implemented, meaning that tribunal claims will be made to Acas who will then attempt consolidate. Claims will no longer be sent directly to the tribunal service, however, this doesn't mean that this day to day cast, it may be that somebody doesn't choose to go through that route and then decides to carry on with the tribunal. Sixth of April, the statutory discrimination questionnaire will be repealed and replaced with a more informal approach for employees who would like to pose questions to their employer about possible discrimination. On the 6th of April, again, financial penalties will be introduced for employers who are found to breach employer registration. Remember what I spoke about earlier. TUPE for transfers occurring from the end April, the changes to the notification of employee liability information, provision in TUPE will take effect, meaning that the information must be provided 28 days before the transfer rather than 14. Transfer is taking place on or after the 31st of July, employers in a micro-business, that's 10 or few employees with no trading in presence or existing employee representatives, will be able to consult individually with their staff, rather than hold an election. They're trying to make it simpler for smaller business. So, just a reminder here's Zero Hour's contract consultation, huge press coverage during 2013. Use of zero contracts was in the spotlight. The government's released a consultation asking for views on the future of such contract. They're amazing if they're used in the right way! You know, “I'm a student, I'd like a job but I don't want to seem unreliable. I'd like to work for you in your restaurant but I can't really commit to you all the time.” The restaurant says “No problem because I'm not sure I have work for you, anyway.” That's brilliant! So let's do a Zero Hour contract. I'm the restaurant owner; I ring you up and say, “Can you work tonight?” And I turn around and say, “No, I'm studying”. There's no penalty or detriment if I say no. And there's no guarantee of work, and that's how the relationship should be. The reason there is a focus is because people are using these instead of employment staff. They have the work available, they're exploiting Zero Hour contracts, and it's wrong. And that's why there's spotlight on it. If they're used in the right way, they're incredible for businesses, especially seasonal companies, tourist towns, they're brilliant. And lots of employees actually like them because it fits in with their study-life, their work-life, and home life. Okay, so we're going to see this consultation run until March, 2014. So it should have ended by now, and the government's response is expected in summer, 2014. So future change to sickness, be aware of this, okay? Recovery of statutory sick pay to be abolished. Currently employees can recover any statutory sick pay paid in a tax month that is over and above 13% of the gross class 1 NIC’s liability for that month. SSP recovery will no longer be possible from the 6th of April. I can actually hear people on the internet going, “you what?! I can't believe that!” Yet actually, just to let you know, SSP will no longer be possible from the 6th of April. This action is being taken for various reasons, including the belief that the ability to recover money in this way is deterring employers from dealing with sickness absence. The money saved by the abolition will be used to fund the government's health and work service, planned for later on in 2014. It's got to come from somewhere. Me, if I was advising a client, return to work entries for one day, manage and monitor absence and sickness, do return three work entries in one day, get the reason why they're off, support them, and employ an Employee Assistance Program, because they interact at the early stage possible, and if it's a stress-related disease or illness, they can interact from day one. So, health and work service, as part of a sickness absence reform, the government is to introduce the health and work service which will offer help to businesses who are dealing with employee long-term sickness. This service will be operated by a private sector company who will tender for the work, but will be offered for no cost. So, getting the tender right, getting the right company in. I really think that if you manage with return to work interviews, speak into your staff, keep an eye on your staff, you can manage it, and actually delegate a responsibility to your team leaders by writing into their job description that they have to return to work interviews after one day. I think it manages sickness and I know it does because the companies I work with, it does. The service will be operated, remember, by private-sector companies. Where employees are off sick for four weeks their GP will be able to refer the employee to the service unless there are clear and well-defined reasons for not doing so, okay? So what is the waiting list? There is also opportunity for the employer to refer to the employee themselves, but the GP has not done so. There's drawbacks here, there's the time and then there's also missing out the early intervention. Getting somebody the service they need at the early stages can get them back into work earlier. So, you hear me talk about this, I do pension webinars. We've got pension reforms, the basic and employer obligations. They started the 1st of October of 2012, and I'm not being funny. There's no beating around the bush, employers, you can't avoid this. You might want to, might you, but you cannot avoid it! Employers will have to roll eligible job holders into a qualifying workplace pension arrangement. Employers will need to pay contributions for eligible job holders in the scheme. So who do enrol? You enrol employees that are over the age of 22 and under state pension age. They work or ordinary work in the U.K. These include part-time contract workers and agency workers, and remember, the contract need-not be in writing. They have qualifying earnings, okay? So, when do you need to auto-enroll? Each employer will be given a date from which the changes will have to be in place. This is the staging date. Go onto the internet; find out your staging date. This will be facing over four years starting with the largest employers. The first stage of dates did start in October, 2012, and they continue to 2016. The starting date for most employers will be based on the number of employees on payroll as of the first of April, 2012. For employers with fewer than 50 employees, I can imagine that's quite a few of listening to me today, the date will be determined by the employee's PAYE reference. For more details on stage and dates, get a pen, write this down, http://www.dwp.gov.uk/docs/staging-dates-by-employer.pdf and find out what your staging date is. Lots of people are expecting letters, some letters have not arrived, they've missed the staging day. There are penalties, okay, and daily fines. So get this blooming right, will you! Action points from employers: check your staging dates. You must access the work-force to identify the employees that need to be auto-enrolled. So you might think that you've self-employed, I'm telling you now, it's up to you check, if you check. If you check and then you think they're self-employed, you need to get expert advice if you want to check the workforce status, because they could eligible, you haven't auto-enrolled them, you're going to get a fine, and to also you're going to get in trouble. Conduct a review of any existing pension scheme arrangements in place to make sure they are the right schemes and they are recognised. Carry out due diligence on a new scheme. Consider additional costs of pension contributions. Consider administration costs and record-keeping requirements. Consider changes to the payroll system and also the admin. You know, you've got to think about the admin side here. Consider setting a scheme in advance of your staging dates. Check your workforce stages, and check the terms and conditions of employment. And just on my point of view, here, when it comes to pensions that you need to make sure that, A, you check your workforce status, you don't want to miss people out that eligible, B, you need to make sure that you put in employment law handbook how they opt in and how they opt out every three years C, and also what you need to do is you need to check that you've got in your terms and conditions an amendment that mentions your pension provider. So, just really, really, really want you to focus on this because the penalties are so high. Right, so thank you for listening to me! If you have a question, ask Amanda. That's mailto:amanda@peninsula-UK.com. That email goes straight to me so don't think it goes to anybody else. If you want to catch it with any previously broadcast webinars, why don't you catch them on YouTube or Peninsula Television? Both of the links are there, and always remember to quote Webinar 58. I'll do another legislation update at the end of April just to remind you again of what you should be doing, just a recap. But I hope I've helped you today, I hope you've listened to what I'm saying, I've really taken on board the changes that happen because I know sure as hell is not employee that's going to be at loss or detriment, it's the employer. And I'm here to support employers and protect them and make their businesses grow and that's what I'm all about. Thank you very much for listening to me, today! I hope to speak you again soon, and it's goodbye.

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