Flexible furlough

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Flexible furlough is available form 1 July, enabling furloughed workers to return to work on a flexible part time basis. 

Up until the JRS (job retention scheme) closes on 31 October, these employees will be entitled to receive:

·   Their full contractual pay in relation to any part-time hours worked; and

·   80 percent of their reference salary (capped at £2,500 per month pro rata) in respect of their non-working time/on furlough leave.

  • from 1 August 2020 employers will no longer be able to claim the JRS grant in respect of any employer’s NIC and pension contributions. The Company will be liable to pay these.
  • Employers must still pay employees at least 80 percent of their reference pay subject to a cap of £2,500 per month pro rata in respect of non-working hours on furlough leave:
  • From 1 September the JRS grant will fall to 70 percent of reference salary (subject to a monthly cap of £2,187.50, which will reduce in proportion to any part-time hours worked/paid); and
  • From 1 October the JRS grant will further reduce to 60 percent of reference salary (subject to a monthly cap of £1,875, which will again reduce in proportion to any part-time hours worked/paid).

Employers will therefore bear an increasing portion of pay for their furloughed workers’ non-working hours.

Where the employer agreed to make any discretionary ‘top up’ payments (above 80%)  to furloughed workers, the cost of these payments – and the associated employer’s NIC and pension contributions – will be borne by the employer as at present.

What are the practical implications?

The flexibility in the new JRS, creates further complexity.

Employee eligibility and flexible furlough

Employees must have been furloughed for at least three weeks prior to 1 July in order to participate in the new scheme, if an employer intends a worker who has not previously been on furlough to be eligible for the JRS after 30 June, that employee must be furloughed for the first time by 10 June at the latest.

This will require careful planning and quick adjustments, and will mean that important decisions which affect individuals’ ongoing eligibility for the scheme must be made beforeHMRC’s guidance is published on 12 June.

Employers must also enter into new written furlough agreements with employees who are to work on a part time basis whilst furloughed.  Please let me know if you need a template for this.  This must be done in accordance with existing employment law. 

In developing flexible furlough plans, employers should ensure their criteria for selecting which furloughed workers will return to work part time – and what hours they work – are fair, reasonable and objective and neither directly, nor indirectly, discriminatory.

Be aware,  returning to work part time might potentially leave some employees at a financial disadvantage. This could be the case where, for example, historical overtime forms a significant part of the reference pay on which furlough payments are based, but similar levels of overtime are not currently available. Cases like this will require careful handling and sensitive employee communications.

Calculating and submitting claims

Claims under the new JRS can be submitted from 1 July, and the last claims under the existing scheme must be submitted by 31 July.

When submitting claims in respect of an employee on flexible furlough, the employer will be required to include information on actual hours worked, as well as the usual hours that the employee would have been expected to work under their contract in the relevant claim period. This information will feed into the calculation of the maximum JRS grant. We expect that the 12 June guidance will deal with the calculation of those hours which, for those with irregular hours, may be quite complex.

A minimum claim period of one week will apply under the new JRS, though claims can still be submitted in respect of longer periods. However, claim periods will no longer be able to overlap calendar months.

Importantly, from 1 July the number of employees included in a claim cannot exceed the highest number of employees included in a claim submitted under the current scheme.

When will the details be available?

As noted above, HMRC is expected to publish further guidance on 12 June which addresses flexible furlough

Updates to HMRC’s guidance
HMRC also published several updates to their JRS guidance on 14 May 2020.

These include:

  • Clarification that claims cannot be submitted more than 14 days before the end of the relevant claim period;
  • Confirmation that participating employers must retain their relevant records for six years for possible HMRC review; and
  • Guidance on what overtime payments and other ‘non-discretionary payments’ can be included in JRS reference pay.

This last point is an important clarification, as previously it was uncertain what constituted ‘non-discretionary overtime’, which should be included when calculating furloughed workers’ minimum salary payments and the associated JRS grants. HMRC’s guidance now confirms that, overtime payments can be included where the employer was contractually obliged to pay the employee at a set and defined rate for the overtime worked (rather than where the employer was contractually obliged to offer the overtime on a voluntary basis).

The updated guidance also confirms that other contractually enforceable variable payments (e.g. shift allowances) should be included in reference pay.

The treatment of overtime, allowances and similar payments requires careful consideration, and employers should assess the basis on which they calculate their JRS claims in light of this updated guidance.  Employers should also consider whether any amendments to past claims might be required once HMRC have introduced this functionality into their JRS portal.

What should employers do?
Extension of the JRS is clearly welcome, and employers will urgently need to consider how the support available affects decisions in relation to managing its workforce. 

In particular, if it is indeed the case that employees can only be furloughed over August to October if they were on furlough at the end of July, employers will need to assess the extent to which they might require support from the JRS over the coming five to six months, and plan which employees to furlough – and when – accordingly. This work will need to be undertaken in the coming weeks in order to put plans into action in when the new scheme rules come into force.

Other practical steps that employers who do or might participate in the JRS can take now include:

  • Reviewing existing agreements with employees – do existing agreements with employees need to be revised to allow the possibility of furlough continuing into July and beyond? The template sent through previously if the current terms have not changed.
  • Getting people back to work – what staffing requirements are forecast from now until the end of October, and is it appropriate to bring furloughed workers back into the business on a full or part time basis?
  • Thinking about workforce requirements – does the extension of the JRS affect any planned headcount reductions? Consider implications if the ongoing costs cannot be covered by the company; Do you need to consider restructuring, reducing headcount,  commencing redundancy consultations.
  • Modelling different levels of employer contributions – what level of subsidy can the business afford? If discretionary payments are currently made over and above furloughed workers’ minimum entitlements, could this continue or should the position be renegotiated to 80%.
  • Checking claims – for many employers, calculating their current JRS claims is not straightforward, with common difficulties including:
    • Establishing the correct components of furloughed workers’ reference pay (in particular, employers should review past claims in light of HMRC’s recently updated guidance);
    • Identifying ‘fixed’ or ‘variable’ rate employees in order to calculate the grant correctly (‘fixed’ rate employees are defined in a similar way to ‘salaried’ workers for National Minimum Wage purposes, which is not always easy to apply in practice); and
    • Making deductions from payments to employees (furloughed workers must receive their entire minimum furlough payment in cash, and any deductions made by the employer must be carefully considered to ensure this condition is met).
  • Reviewing JRS compliance – are processes and controls robust enough to withstand HMRC review, and can they cope with the additional complexities the prospective changes will introduce?

Please let me know how I can help support you through this challenging time.

Employment Law Update

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Settled Status for EU workers

As part of the government’s post-Brexit plans European workers currently living in the UK will be able to apply for settled status in 2019, allowing them to remain indefinitely following the end of the transition period in 2021. To attain settled status individuals must be able to prove they have been living in the UK for 5 years by 31 December 2020.  Meanwhile, those who fail to meet this requirement can apply for temporary status, allowing them to remain until they have accrued enough residency to be granted settled status. For those who are keen to provide their EU workers with confirmation of these rights, we can create you a letter outlining the UK’s settlement scheme.

Gender pay gap reporting 

Private sector organisations with 250 or more employees will again be required to publish their gender pay gap figures on 4 April 2019, whilst public organisations will need to do the same by 30 March. Although many organisations will be reporting for the second time, this year will be the true test as figures are expected to be heavily scrutinised in order to determine whether efforts to address any significant pay disparity highlighted in the previous year have been successful.

At the same time, 2019 may also be the year mandatory ethnicity pay gap reporting is introduced.

Increase in NMW rates 

National minimum wage (NMW) rates will again increase for all workers from 1 April 2019. As part of these new rates workers aged 25 and over, and therefore eligible for the national living wage (NLW), will benefit from an increase of 4.9 per cent, with hourly rates rising from £7.82 to £8.21.

Statutory sick pay and family friendly rates 

1 April 2019 will also see an increase to the lower earnings threshold and weekly pay for those who receive statutory sick pay (SSP). Individuals must receive average weekly earnings of £118 or greater to qualify for SSP which will then entitle them to payments of £94.25 per week. The statutory weekly rates for maternity, paternity, adoption and shared parental pay will also increase at this time, rising from £145.18 per week to £148.68 (or 90 per cent of the employee’s average weekly earnings if this figure is lower than the statutory rate).

Payslips 

Organisations will also need to review, and potentially change, the way they issue payslips in 2019 as from 6 April onwards the legal right to a payslip will be extended to include those who are recognised as ‘workers’. Furthermore, a new requirement means organisations will be obliged to include the number of hours worked on payslips for staff whose wages vary depending on the amount of time worked.

Auto-enrolment contributions 

Additionally, from 6 April the minimum contributions for auto-enrolment pension schemes will increase for both employers and employees. Under these new requirements employers must contribute a minimum of 3 per cent of an eligible worker’s pre-tax salary to their pension pot, with the individual contributing 5 per cent themselves.

EAT gives landmark judgement on shared parental pay

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This month, the Employment Appeal Tribunal (EAT) has handed down its judgement on a direct sex discrimination case involving shared parental pay.

In other case law, the Supreme Court held there was an implied term in all contracts of employment as to the point that a notice period begins.

Shared parental pay was not direct sex discrimination
The Employment Appeal Tribunal (EAT) has recently decided that paying women on maternity leave more than men on shared parental leave was not direct sex discrimination.

The ruling was based on the determination that a woman who has given birth is entitled to special treatment in connection with the childbirth that cannot be compared to a man on shared parental leave.

Budget

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There were a number of measures of importance to employers in the budget, including a small change to the taxation of termination payments, following a government consultation last year. From April 2018, termination payments (for redundancy, for example) in excess of £30,000 which are already subject to income tax will also be liable for employer National Insurance Contributions.
“It has always seemed bizarre that although income tax became payable on amounts over £30,000, national insurance contributions did not,” commented employment partner Chris Holme, from law firm Clyde & Co. “The announcement that employers NICs will now be payable on these amounts seems quite logical. Unfortunately it will lead to an increased cost for employers, but we can’t see this having a huge impact on the number of settlements because the very important tax break for the employee (the first £30,000) it seems will remain – and that is to be welcomed.”
Other measures announced in the budget included a consultation in May 2016 on extending shared parental leave and pay to working grandparents, which will also consider options for streamlining and simplifying the existing shared parental leave procedures.
More details on the apprenticeship levy were also announced. Employers with an annual wage bill of more than £3 million will pay a 0.5 per cent apprenticeship levy from April 2017, but will also receive a 10 per cent top-up to their monthly levy contributions from the government, in addition to a £15,000 allowance they can offset against the levy payment.
The government’s Tax-Free Childcare scheme will begin rolling out in early 2017, and the existing Childcare Vouchers scheme will close to new entrants from April 2018.

National living wage

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From 1 April the new National Living Wage (NLW) is payable to workers aged 25 and over. The introductory rate is set at £7.20 an hour and is expected to rise to over £9 by 2020. BIS guidance on ‘Calculating the minimum wage’ has been updated to reflect the new wage. The Low Pay Commission will continue to advise the government on appropriate increases annually.
The government announced in February that over 90 employers had been ‘named and shamed’ for not paying the NMW. From 1 April the penalty for underpaying the minimum wage will double to 200 per cent of the arrears owed to each worker if the debt is not cleared within 14 days.
Just before the Budget in March, Chancellor George Osborne announced the following increases to the National Minimum Wage (NMW) from 1 October 2016:
•    Workers aged 21-24 rate rises from £6.70 to £6.95 an hour
•    Workers aged 18-20 rate rises from £5.30 to £5.55 an hour
•    Workers aged 16-17 rate rises from £3.87 to £4.00 an hour
•    Apprentices under 19 (or in first year of apprenticeship) rate rises from £3.30 to £3.40 an hour.
From 2017 both the NLW and the NMW will change on 1 April.
Phil Allen, employment partner at law firm Weightmans, commented that the size of the NMW increases was “something of a surprise”, and pointed out that from October they “will narrow significantly this age-related minimum pay gap”.
Chris Rowley, professor of human resources at Cass Business School predicted that the NLW would have a greater effect on small businesses, the accommodation, food services, retail and agriculture sectors, and on employers providing administrative and support services. “Worryingly, some firms have already looked at ways around the NLW, such as cutting benefits and perks, taking on younger workers, using apprenticeships and self-employment as convenient fig-leaves,” he said.
Kristie Willis, an employment solicitor at law firm BTMK, warned that employers attempting to minimise the NLW’s effects by recruiting younger employees “may amount to age discrimination.” She also thought that any businesses trying to engage contractors rather than employees in order to avoid paying it “should seek careful advice before doing this to ensure that any contractors are not actually considered workers under the NMW rules. If employers fail to comply, the overall maximum penalty is £20,000 per worker.”
Angela Wright, senior lecturer in human resources management at Westminster Business School, said there was a concern that a rise in the lowest pay rate could “trigger pay claims from others in the organisation, particularly those paid just above the new rate. Companies may find it beneficial to move to pay structures which use pay ranges, rather than the single point or spot pay rates used by some large retailers, so they can manage the introduction and development of the NLW more effectively.”

April enforcement dates…

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April enforcement dates, new legislation, and the latest case law from courts and tribunals
This month the shared parental leave rules reached the ‘expected week of childbirth’ trigger, the Small Business, Enterprise and Employment Act 2015 became law just before Parliament shut down for the general election, an employment tribunal released the first part of its judgment on the Lockholiday pay case, and new statutory pay and tribunal compensation limits increased.
April changes
The Easter weekend ushered in a whole raft of employment law changes. On 5 April:
•Shared parental leave rights applied to babies due, or children matched for adoption
•Parental leave, which is unpaid, was extended to parents of children under 18 years (previously the leave had to be taken before the child’s fifth birthday, unless the child was adopted or disabled)
•Additional paternity leave ceased to be available, although the rights continue until April 2016 to cater for parents of babies due, or children matched for adoption, before this date (usually the leave can only start 20 weeks after the child’s birth or matching, and must be taken within a year of that date)
•Statutory maternity, paternity, shared parental and adoption pay increased from £138.18 to £139.58.
On 6 April:
•Statutory sick pay increased from £87.55 to £88.45
•Limits on a week’s pay (used for calculating redundancy and unfair dismissal basic awards) increased from £464 to £475
•Maximum basic award for unfair dismissal and statutory redundancy payment rose from £13,920 to £14,250
•Cap on the compensatory award for unfair dismissal went up from £76,574 to £78,335.
Also from this date, new consolidating regulations governing the National Minimum Wage are in force. New NMW rates apply from 1 October 2015. The government is planning to launch a new online tool, called the National Minimum Wage Accelerator, which will compare rates of pay across regions, sectors and occupations, drawing on data collected annually by the Office for National Statistics.
New legislation
The Small Business, Enterprise and Employment Act 2015 became law on 26 March. It includes provisions on mandatory equal pay reporting for companies employing 250 or more, a ban on exclusivity clauses in zero hours contracts without a guaranteed weekly income, measures for clawing back exit payments from public sector executives who are then re-employed in the same area of work, a fine capped at £5,000 for employers that fail to pay compensation awarded by tribunals and an increase in penalties for employers not paying the national minimum wage.
Most of the changes need further regulations to bring them about, which will require the backing of the new post-election government. The equal pay reporting provisions stipulate the new regulations should be introduced by the end of March 2016.
Case law
The holiday pay case Lock v British Gas has returned to an employment tribunal following its referral to the European court. The tribunal followed a previous EAT decision which said that the UK’s Working Time Regulations 1998 can be amended to include commission when calculating pay for four (in other words, the basic holiday entitlement under EU law) out of the 5.6 weeks statutory leave UK workers have a right to. The tribunal also thought the employee in this case should be treated like a piece worker under the regulations, which would mean using a 12-week reference period when calculating holiday pay. However, exactly how the calculation will be done in this case is to be decided at a later date.
Employment partner at Irwin Mitchell Glenn Hayes pointed out that the circumstances in the Lock case were relatively straightforward and that ascertaining what an employee is owed will not be so easy where, for example, commission is paid annually, or is based in part on team performance. “We are likely to need further cases before we have answers to the more difficult questions,” he said.
Research conducted by Irwin Mitchell and polling company YouGov found that a quarter of employers surveyed expected staff costs to increase as a result of the holiday pay case law, and that half of the senior managers surveyed did not have a plan for dealing with the issue. From 1 July 2015, claims for backdated underpayment of holiday will be limited to two years under the Deduction from Wages (Limitation) Regulations 2014 (pdf).
The European court is due to deliver its judgment on 30 April 20015 on defining an “establishment” for collective consultation purposes in the ‘Woolworths’ case. In February the EU Advocate General gave a legal opinion on the case, which is called USDAW v WW Realisation 1, that ‘establishment’ was the local employment unit to which the redundant workers are assigned – in this case, the shop – and did not require employers to aggregate dismissals across the whole organisation to see if this triggered consultation requirements. The Court of Justice of the European Union does not have to follow the AG opinion.
The issue of tribunal fees is due to return to the courts in June as Unison has been given permission to appeal the decision of the High Court failing to grant the trade union a judicial review of their introduction

Spring employment law changes

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Regulations, statutory amendments, and case law continue to push forward developments in employment law
Compensation rates rise, first shared parental leave babies are born, and ‘vaping’ reaches the tribunal system
Tribunal awards

New tribunal compensation limits have been announced. The capped award for unfair dismissal increases from £76,574 to £78,335; the maximum basic award for unfair dismissal and statutory redundancy pay rises from £13,920 to £14, 250; and the limit on a week’s pay (used for calculating basic awards for redundancy and unfair dismissal) rises from £464 to £475. The new rates apply from 6 April 2015. Rate increases for statutory maternity, paternity, adoption and shared parental pay apply from 5 April 2015.

The Low Pay Commission, the body that advises the government on setting the National Minimum Wage, has released its suggested increases for this year. If the recommendations are accepted by the government the rate for workers aged 21 and over will rise by 3 per cent to £6.70 an hour; the rate for workers aged 18-20 will increase by 3.3 per cent to £5.30; workers aged 16-17 will see a rise of 2.2 per cent to £3.87; and apprentices’ minimums go up by 2.6 per cent to £2.80. Confirmation of the new rates may be in this month’s Budget and, if approved, the increases will take effect from 1 October 2015.

New regulations for the National Minimum Wage are in force from 6 April. The regulations consolidate 20 amendments that have been made since the minimum wage was first introduced and don’t represent any changes in policy.
Family leave

The pivotal ‘due date’ for the shared parental leave rules is 5 April 2015, which means the parents of babies born in the next weeks will be the first to benefit from the new arrangements, provided both parents qualify. The government says around 285,000 couples are expected to be eligible, but the government predicts a take-up of only 5,700 couples in the scheme’s first year.

Law firm Irwin Mitchell believes these estimates are too low. In a survey which it carried out of 2,000 working couples, it found that 66 per cent of male respondents said they would like to be their baby’s main carer in its first year, and sixty-one per cent said this would be the case even if it had a detrimental effect on their career. More than a third of men said sharing the leave and pay was the best option for them as their partners were on higher salaries.

Employment partner Glenn Hayes commented, “These figures may take businesses by surprise. The shared parental leave rules are designed to encourage more dads to play an active role in the upbringing of their children, but the financial situation in the home will be the greatest influence on who takes it up. Many businesses have been slow to prepare themselves for this important change and in doing so have left themselves open to the risk of mishandling requests and inviting claims for discrimination.”

Statutory paternity leave is unchanged by the new shared parental leave rules. The Labour party has recently pledged to double its current length from two weeks to four, and raise the statutory paternity pay rate by £100 to £260 a week, if it forms the next government. Law firm Norton Rose Fulbright’s head of employment practice Paul Griffin said that as this new rate would only reflect the national minimum wage, “it may not be that attractive”. He said that in a survey his firm conducted last year on shared parental leave, the key stumbling blocks were low pay levels during leave and “entrenched cultural resistance to men taking an active role in childcare. Eighty-nine per cent of respondents among employers predicted a low level of take-up. These new proposals in the same vein may, therefore, have limited impact.”

The advent of the shared parental leave rules has put the increase in parental leave next month in the shade. From 5 April 2015parents can take parental leave (which is unpaid) up to their child’s 18th birthday – previously it was only available until the child was five years old. Parents can take a maximum of four weeks in any one year.
Criminal records
On 10 March Section 56 of the Data Protection Act 1998 is in force (delayed from its predicted implementation date of December 2014). The provision makes it a criminal offence to require someone, perhaps a job applicant, to access and provide information on their criminal record. Employers have been known to make it a condition of employment. The practice is referred to as ‘enforced subject access’, and the Information Commissioner’s Office has now produced guidance on how the prohibition operates.
Case law

Two recent cases have broken new ground in employment terms. In the case Rubins v Latvia, the European Court of Human Rights decided that dismissing an employee for sending emails criticising management was an unjustified interference with the employee’s right to freedom of expression. The Equality and Human Rights Commission has published new legal guidance, prompted by the Charlie Hebdo murders in Paris, on freedom of expression to help address “muddle and misunderstanding” over rights in this area.

In the UK, an employment tribunal has heard the first case involving ‘vaping’, the term describing the use of e-cigarettes. It decided a catering company’s decision to discipline a catering assistant for vaping on school premises, in full view of pupils, was reasonable, but the tribunal raised a ‘point of concern’ over the school’s no-smoking policy neglecting to include e-cigarettes.

Holiday pay back in the spotlight, collective redundancy consultation rules assessed, and statutory pay rates rise

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Holiday pay back in the spotlight, collective redundancy consultation rules assessed, and statutory pay rates rise
The Lock case returns to a UK tribunal and the European advocate general decides on the meaning of ‘establishment’ in the Woolworth’s case
Holiday pay
The case which looked at whether commission should be included in holiday pay, Lock v British Gas, has
returned to a UK employment tribunal following a decision by the European court. The tribunal now has to
decide whether UK law can be interpreted in line with the court’s ruling, although its decision is not
binding on other courts and may be appealed.
The case involved a salesman whose pay was made up of 60 per cent commission. When he was on leave he earned no commission. He claimed this would decrease his future holiday payments.
The European court has confirmed that holiday pay needs to reflect “normal remuneration” and should put
workers in a position which is “comparable to periods of work” as regards salary. So where commission is a
significant part of workers’ wages, it needs to be included in holiday pay.
Colin Smith, an employment partner at law firm Brachers, commented “What is clear is that EU law requires
commission and bonus earnings that are intrinsically linked to the work done by a worker to be factored into
EU law holiday pay (the basic four weeks out of the UK’s 5.6 weeks’ entitlement). Whether this EU principle
can be shoehorned into the current wording of the Working Time Regulations is unclear. This whole area,
including overtime, is crying out for proper legislative intervention to bring clarity for employers as to
what holiday pay should be and how it should be calculated.”
Redundancy consultation
A legal opinion from the European Advocate General has been given on the collective consultation for
redundancy case, USDAW v WW Realisation 1. The case, which has been linked with two others for the opinion, stems from the closure of Woolworth’s stores and was heard in the Employment Appeal Tribunal in 2013. It has been referred to the European court by the Court of Appeal over whether UK consultation requirements, triggered when 20 or more redundancies are being made “at one establishment”, refers to individual work locations (shops, in this case) or the whole business.
The opinion, which may not necessarily be followed by the CJEU, suggests that ‘establishment’ does mean
individual workplaces within a business. Emma Zarb, employment lawyer at Taylor Wessing, said: “This is good news for employers. Should the ECJ follow the Advocate General’s opinion, businesses will be able to revert back to the standard approach taken since the seventies, and look at any planned redundancy in isolation.”
But Sarah Rushton, a partner at solicitors Moon Beever, urged employers to remain cautious about the opinion.She said that although it suggested that the pre-Woolworth’s position may prevail “matters are not entirely clear cut as the Advocate General also observed that it is conceivable that several shops operated by one employer within one shopping centre may be regarded as one employment unit, and that it is not necessary for an employment unit to have financial or administrative autonomy in order for it to be regarded as such.”
Nick Dent, employment partner at law firm Clyde & Co, said that the purpose behind the European collective
redundancies directive is “arguably to protect local communities from the impacts of mass redundancies in
that area. Employers have actually for the last year and a half been living with case law that says they have
to look at redundancy plans across all their sites when calculating whether they hit the 20-person threshold
for consultation. For large employers this means they would have constant consultation obligations, and many have been quietly ignoring the Woolworths case and only consulting locally where there are 20 or more
redundancies at one site – without much objection.”
Matthew Smith, a partner in Blake Morgan’s employment law team, said the opinion would come as a “great
relief to many employers. The opinion stresses that it’s the local impact of proposed redundancies which is
important, which is why it’s the number of affected staff at the local store or office which counts.
Employers going through redundancy exercises will still have to consult their staff on an individual basis
but the opinion suggests that, in many cases, they will be spared the formal requirements of collective
consultation, such as the need to elect and consult with employee representatives. Importantly, they’ll also
not need to worry about the significant financial impact of large ‘protective awards’ for failing to consult
collectively”.
Other cases to watch
Law firms are recommending that employers keep their eye on a number of cases this year which have
implications for the way they manage their businesses. These cases, which are all to be heard in the Court of Appeal, include:
•USA v Nolan, on the trigger point in an employer’s decision-making process when the obligation arises
to consult collectively
•Griffiths v DWP, on whether absence management policies should be adjusted for disabled employees
•Moran v Ideal Cleaning Services, on the meaning of ‘temporary’ where agency workers are concerned
•Unison v Vice Chancellor, on the lawfulness of the introduction of tribunal fees.
Statutory pay rates
The government has announced increases to the statutory pay rates (see the Welfare Benefits Uprating Order 2015). Statutory sick pay rises from £87.55 to £88.45 on 6 April 2015, and statutory shared parental, maternity, paternity and adoption pay rises from £138.18 to £139.58 on 5 April 2015. Shared parental leave and pay becomes available to the parents of babies due, or of children matched for adoption, on 5 April. All statutory shared parental pay will be paid at the lower rate of statutory maternity pay – there will be no initial six week enhancement as available under the statutory maternity pay provisions.
Tribunal compensation limits, on a week’s pay for calculating statutory redundancy pay and the basic award
for unfair dismissal, should come into force in the first week in April, although the new rates have yet to
be announced.
Dates for your diary
MarchForced subject access requests  become unlawful
AprilShared parental leave applies, statutory pay rates and tribunal compensation limits rise
May‘Fit for work’ service becomes fully operational
OctoberNational Minimum Wage rates change

Politicians shouldn’t focus on regulation to make our labour market work better, says CIPD

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Politicians shouldn’t focus on regulation to make our labour market work better, says CIPD

New report suggests that either more or less employment regulation is likely to have little impact on UK labour market outcomes

With less than 100 days to go until the General Election, the CIPD, the professional body for HR and people development, is warning that regulatory changes shouldn’t form the cornerstone of labour market election promises. According to new research, the UK’s flexible labour market is generally working well in comparison with our international peers, suggesting there isn’t a strong case for the next Government to either de-regulate further or to strengthen employment rights.The report, Employment Regulation and the Labour Market, indicates that the UK is highly unlikely to get much benefit from more employment regulation or from significant deregulation of the labour market, as it already performs well in comparison to many of its OECD counterparts on a number of measures. The link between the stringency of regulation and labour market outcomes such as productivity or job quality is in many areas either weak or complex and thus difficult to predict. Instead, the CIPD is urging policymakers to focus efforts on improving productivity through a much stronger focus on improving workplace practices while increasing awareness of existing rights and enforcing them more effectively.The report, commissioned by the CIPD, and compiled by The Work Foundation, considered the impact of employment regulation on broad labour market measures. The Nordic countries (Denmark, Sweden, Finland and Norway) and the Netherlands score consistently well and the UK sits comfortably mid-table or above on most indicators. However, there are some economies in Southern and Eastern Europe, such as Spain, Italy and Greece, where the data does suggest that labour market outcomes could be improved by greater liberalisation.The report indicates that despite the UK rating below average among OECD countries on measures of employment protection, the quality of employment in the UK compares more favourably with other countries than is often thought to be the case:

•In comparison to other OECD countries, the UK has a high share of permanent employment – 79% of UK workers in 2013 were on a permanent contract, compared to 77% in Germany and 65% in Italy
•Compared with the European average, the UK has a larger proportion of ‘good’ jobs and a smaller proportion of ‘low quality’ jobs. Overall 65% of jobs in the UK are rated as good jobs*, compared to just 54% in Italy, 50%  in France and 49% in Germany
•The average weekly hours worked by employees in the UK in 2013 was 36, which was in line with the OECD average. However the UK does have a comparatively high proportion of long hours jobs (those involving 50 hours or more a week) with 12% falling into this category
•In all, 84% of UK workers say they are satisfied with their working hours (EU 28 average 80%) and 77% report they are satisfied with their work-life balance (EU 28 average 74%). UK workers don’t seem much more fearful of losing their jobs than workers in countries with stricter employment protections (12-14% across UK, Germany, France and Italy) and over 40% said they were either optimistic or very optimistic they could find another job at a similar wage.

Ben Willmott, head of public policy at the CIPD said: “The public debate can often seem polarised between calls for greater regulation and employee protections from trade unions and, at the other end of the scale, employer organisations that want to reduce regulatory burdens on business. Our report shows that more or less regulation is not the issue. Overall, UK workers are more satisfied with their jobs, working hours and ability to progress than their counterparts in France, Germany and Italy. The solution to some of the challenges we face in the UK such as poor productivity and the high proportion of low paid jobs in the economy doesn’t lie in quick legislative fixes. We don’t need yet another employment bill or another zig-zag between more and less regulation. Instead, what we need is a fundamental review of the UK’s skills policy to understand how we can generate more high-skilled jobs and better progression routes for those in low-skilled and low-paid jobs. We also need a much greater focus on improving workplace practices in the areas of leadership, management and HR capability to increase demand among employers to invest in workforce development.”While the UK performs well overall, it performs comparatively poorly in three important areas – productivity, low pay and the integration of young people into the labour market.

  • The UK performs poorly on productivity compared to many of its international peers, however, there seems little association between labour market regulation and productivity. Between 1985 and 2013, relative productivity compared with the US fell in relatively lightly regulated UK, New Zealand and Canada. Among the more highly regulated economies, relative productivity fell in Italy and increased slightly in France and Germany
  • While the UK doesn’t have the highest share of low-paid jobs in the OECD, it does sit uncomfortably in the top quarter. The UK, US and Canada all have 20-25% of employment in low-paid work compared with 18% in Germany and 10% in Italy
  • The UK sits in the lower half among OECD countries in terms of its youth unemployment rate and in the bottom quartile among EU 28 countries on the youth unemployment ratio.

Willmott concludes: “It’s clear that the UK struggles on productivity, low-pay and unemployment among young people, but the wider picture is much more positive. The stage seems set for a good performance but something is missing in the delivery. We have good investment in ICT, above-average shares of knowledge-intensive industries and better quality employment than many European economies, including some with much higher productivity levels. Rather than meddling with regulation, a renewed focus on enforcing and improving awareness of existing rights among employers and workers is needed to help curb any abuses of employment rights where they do occur, as well as a much more explicit policy focus on the workplace to improve practice and productivity.”The CIPD has suggested the creation of a Workplace Commission to help support a more strategic approach across government to developing policy on the workplace with the objective of improving productivity and enhancing job quality where poor practice exists.

See http://www.cipd.co.uk/pressoffice/press-releases/labour-market-280115.aspx for original PR

‘Fit for work’ website and helpline goes ‘live’

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‘Fit for work’ website and helpline goes ‘live’, prohibition on forced subject access requests is delayed, and no appeal yet on holiday pay overtime case

Fit for work     

Assessment and advice service aimed at speeding ‘return to work’ for employees on long-term sick leave begins this month

The government is beginning to implement its new health assessment service, ‘Fit for work’. Previously known as the Health and Work Assessment and Advisory Service, the scheme stems from recommendations in the government commissioned report in to long-term sickness absence by Dame Carol Black and David Frost in 2011. This called for an independent assessment mechanism triggered when employees on sick leave had been absent from work for around 4-6 weeks, after which time statistics indicate the likelihood of them returning to work decreases.

There will be two main elements to the service:

•         health and work advice, provided through a helpline and website
•         an occupational health assessment, designed to identify all the obstacles preventing the employee returning to work, culminating in a ‘return to work plan’.

The telephone and website advice service are expected to be live by mid-December. The second part of the service, consisting of telephone based ‘biopsychosocial assessments’ conducted by health professionals, looking at issues which may be preventing a return to work from sick leave, will follow later. The service is not directly linked to benefits, but individuals referred to it receive the equivalent of a Fit Note at the end of their ‘return to work plan’ which may need to be provided as evidence in an application for benefits.

The service will be delivered in England and Wales through a private provider, Health Management Ltd, and in Scotland by the Scottish government.

Adam Bailey, head of the sickness absence review team at the Department for Work and Pensions, said the scheme was a “consent-based service, designed to provide help to the individual, the employer and the GP about what things might be appropriate to help that individual get back to work.” He said the service was intended to complement and not compete with employer’s own occupational health services, and was expected to be particularly useful for small and medium sized organisations with no occupational health service. He also said his department was committed to evaluating the service appropriately in order to arrive at a “significantly in-depth understanding of the drivers of sickness absence”.

The roll-out schedule for the service is still to be finalised but is expected to be completed by May 2015. Speaking at a Westminster Employment Forum conference recently Bailey said he appreciated that employers needed to know exactly how the service would operate and that his department was aiming at putting out full information for employers at least six weeks before they would be affected. He stressed that there would not be a ‘big bang’ start and “there will be time once the information’s out there before the service really ramps up”.

The new service’s operations director, Susannah Hoskins, emphasised that Fit for work was “not an occupational health service” but a “line of support, providing impartial expert health and work advice to employees, employers and GPs”. It was aimed at giving doctors short on appointment time and experience of occupational health issues the opportunity of early intervention in to what they expected could become long-term health issues for patients. “The service is very much work focused, but it’s covering ground that might not be covered with a GP because of time or knowledge constraints,” said Hoskins.

GPs will be encouraged to make early referrals to the service; employers can only make referrals after an employee has been absent on sick leave for four weeks. There are no self-referrals. The ‘return to work plan’ will be agreed with the employee, and the service will also need users’ agreement as to who sees which parts of the plan.

The service’s implementation coincides with recently released annual figures from the Health and Safety Executive, showing that almost 46 per cent of the half a million employees who developed a new illness over the past year had an illness related to stress, depression or anxiety and that 23.5 million working days were lost to all illnesses in the year from 2013-14.

Data protection

The government’s implementation of Section 56 of the Data Protection Act 1998, expected this month, has been delayed due to an unspecified “technical issue” according to the Ministry of Justice. The department says it is working urgently to resolve the problem and “remains committed to making the practice of enforced subject access illegal”.

Section 56 makes it an offence for employers to require individuals to make data subject access requests in order to provide the employer with evidence of whether or not they have a criminal record. Employers can only ask the Disclosure and Barring service for a criminal record check where the person concerned would be working with children or vulnerable adults, or where the job requires a high level of public responsibility (for example, doctors and lawyers). Ellen Temperton, a partner at Lewis Silkin, says the implementation of the provision “could have a wide-reaching effect on the recruitment practices of many employers.”

Case round-up

The trade union Unite has said it will not appeal the Employment Appeal Tribunal’s decision in the overtime holiday pay case, Bear Scotland v Fulton. The EAT’s judgment imposed limitations on a worker’s right to bring historic claims for underpayments as a series of unlawful deductions. Glenn Hayes, employment partner at Irwin Mitchell, said the announcement was “surprising as it was widely anticipated that the union would appeal … particularly as the EAT itself conceded that this aspect of its decision was ‘arguable’.

“We now have a bit more clarity in relation to the issue of holiday pay and overtime,” he continued, “but there are still plenty of uncertainties, and other claims are likely to be raised over the coming months and years. Businesses that do not start to adjust their holiday pay calculations could face claims for underpayment of holiday pay in the employment tribunal and should consider taking action now.” The law firm notes that employers can still legitimately refuse to adjust holiday pay where overtime is purely voluntary, ad hoc or where an employee can ‘reasonably’ refuse it.