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Increase in employee compensation limits and awards, NLW and NMW


Increase in employee compensation limits and awards

From 6 April 2017, the compensation limits on Employment Tribunal awards and certain other amounts payable under UK employment legislation will increase. 

The changes, set out in the Employment Rights (Increase of Limits) Order 2017 SI 2017/175, include:

  • One week’s pay for calculating redundancy and the unfair dismissal basic award will rise from £479 to £489
  • Maximum basic award for unfair dismissal and max statutory redundancy pay will increase by £300 to £14,670
  • The minimum basic award in cases where a dismissal is unfair by virtue of health and safety, employee representative, trade union, or occupational pension trustee reasons will increase from £5,853 to £5,970
  • The limit on compensation for unfair dismissal will increase from £78,962 to £80,541

Alongside these changes will be increases to the National Living Wage, Minimum Wage, Statutory Sick Pay and family friendly statutory pay, these include:

  • NLW will increase for all workers over 25 from £7.20ph to £7.50ph
  • NMW will increase for workers aged 21-24 from £6.95ph to £7.05ph
  • SSP will increase from £88.45pw to £89.35pw
  • Family friendly statutory pay will increase on April 2 from £139.58pw to £140.98pw which covers adoption, maternity, paternity and shared parental pay

What does this mean for employers?

The changes relating to redundancy and unfair dismissal payments will take effect on the 6th April and apply only to dismissals that occur on that date or following. It is important to take note that:

  • If an employee was given notice prior to 6th April, but their notice period expires on or after the 6th April the new limits will apply
  • If an employee is terminated by means of payment in lieu of notice, the effective termination date (EDT) is the actual date the dismissal takes effect, plus the statutory notice applicable to the employee. I.e. one week per year of employment, up to the maximum of 12 weeks. If the statutory notice would take the EDT to or beyond the 6th April, the new limits will apply

If you’re unsure about any of these changes and how they may affect your business please contact us on 0161 603 2156.

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Big hill to climb for the Apprenticeship Levy


According to research conducted by City and Guilds skills group, a third of eligible employers are unaware of the Apprenticeship Levy despite it being introduced in April this year.

The survey of more than 500 organisations has produced some surprising results with only 33% feeling they had received enough information about the scheme; 28% were unsure how it would affect their business while 15% thought they would have to cut recruitment costs to cover the additional cost. Only 31% expected to hire more apprentices because of the Levy.

Kirsty Donnelly, managing director of City and Guilds, hit the nail on the head when she said:

‘We still have a mountain to climb in convincing people about the benefits apprentices can bring to businesses.’

If that observation blew your mind just wait until you read her book – ‘The grass is green, the sky is blue’.

According to the survey, 47% felt the Levy was a good way to encourage employers to pay for training, 43% felt it gave them more control and 34% believed it would improve the quality of apprentices.

We don’t need no education

A spokesperson for the Department for Education said:

‘Employers are at the heart of our apprenticeship reforms and have been working with us since 2013 to create the apprenticeship standards and ensure they are high quality and deliver the skills that they need.

‘We have also published a detailed levy guide for employers and an online calculator that enables them to understand how much levy they will pay and how they could use their digital funds to pay for training in future.’

The Apprenticeship Levy requires businesses with an annual wage bill of £3million or higher to pay a 0.5% fee into a digital apprenticeship fund which smaller businesses can draw from to fund their own apprenticeship schemes.

The Levy will be launched in April 2017. For more information about the scheme please contact Opsium Employer Support on 0161 603 2156 or email info@opsium.co.uk

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The age of the restless employee


The tale of 5,000 CVs and boredom 

The economic research arm of Glassdoor reviewed 5,000 CVs submitted to the job site to determine why employees are rushing for the door as opposed to carving out long and fruitful careers with one firm.

The report doesn’t tell you anything you don’t already know, but it’s nice to confirm it in writing. Career advancement, employer culture and values and decent pay are the top reasons why employees stay with companies and with employee turnover costing on average 21 per cent of an employee’s annual salary it’s a pricey lesson to learn.

Surprisingly, factors such as work-life balance, senior management and the quality of benefits and compensation have no statistical effect on employee turnover.

Image matters

The study revealed that a strong brand is enough to not only draw in new applicants but also retain existing employees.

A one-star increase in an overall five-star review will see a four per cent increase in the likelihood an employee will stay with an employer. It also confirmed that a one-star increase in career opportunities and culture and value will see a five percent increase in staying with a company.

Pay to stay

While a pay increase is a nice to have, apparently it’s not a necessity. The study revealed that a 10 per cent increase in base pay would increase the odds of an employee staying by only 1.5 per cent.

Turns out money doesn’t buy happiness, good reviews do!

Growing roots can be toxic

In the past, the idea of a person staying in a job for 20+ years was commonplace; nowadays the average worker stays in one role for 15 months with only slight differences per sector. For example, workers in Government roles tend to stay on average 18.6 months compared to 10.6 months for construction, repair and maintenance.

Employees that stagnate in a role for too long run the risk of developing a wandering eye. For every additional 10 months that an employee does this, the risk of them leaving increases by one per cent.

For more information and to understand the full methodology to the study please visit Why Do Workers Quit?

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The end of the liquid lunch


Employees at Lloyd’s of London have been banned from consuming alcohol during the working day following a rise in drink related disciplinary issues.

The historic insurance market, founded in the 17th century, is one of the world’s oldest and most popular insurance markets specialising in complex and unique risks. Since its inception, Lloyd’s of London has become synonymous with the liquid lunch; although in recent years drinking has been the cause of more than half of all disciplinary matters.

A new dawn

The new policy ruling, which only relates to 800 of their direct employees, has caused a backlash amongst the staff with many taking to the company’s (internal) intranet to vent their frustration.

Comments from disgruntled staff, included:

“Lloyd’s used to be a fun place to work. Now it is the PC capital of the world where you can’t even go out for a lunchtime pint anymore.”

“Will we be asked to go to bed earlier soon?”

"Did I just wake up from my drunken induced slumber to find we are now living in Orwell's 1984?"

The liquid lunch had often been the staple for a completed deal or well-made contact in the city, something Lloyd’s recognised in its memo to staff:

“The London market historically had a reputation for daytime drinking, but that has been changing and Lloyd’s has a duty to be a responsible employer, and provide a healthy working environment. The policy we’ve introduced aligns us with many firms in the market.

“Drinking alcohol affects individuals differently. A zero limit is therefore simpler, more consistent and in line with the modern, global and high-performance culture that we want to embrace.”

Lloyd’s added that failure to comply with the new policy could see employees facing charges of gross misconduct and possible dismissal.

But are Lloyd’s in the right? Can they get away with enforcing a 9-5 drinking ban? We take a closer look…

Policy wording

Before you enforce any new policy, you need to have watertight wording to back it up. Explain clearly your reasons for enforcing a ban and the consequences for someone who breaches the rule. If you plan on doing any kind of testing to ensure the policy is being adhered to, then make it clear how and why this will be undertaken.

If you are testing for alcohol consumption you need to ensure this is done fairly and consistently. If you are seen to be lax with senior members of staff, then you may find yourself liable for a claim of discrimination.

In the case of Dyson v Asda Stores, a warehouse manager refused to test out of pride and was dismissed. He brought an appeal to an employment tribunal who upheld the dismissal. They argued that as Asda Stores had been fair and consistent in their approach to testing and that the manager should have set an example for the other staff.

Rights to privacy

Article 8 of the European Convention on Human Rights gives each employee a right to respect for their private and family life.

An employee who has been asked to test for alcohol or drugs consumption can argue that it interferes with their rights, especially if the testing it intrusive (involves them removing an article of clothing or providing a urine, spit or hair sample).

It is therefore imperative that you provide clear reasons for testing and how it meets a legitimate business aim.

If you need help implementing a new policy or rewording an existing one, contact us for more information.

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Top 10 worst excuses given for not paying the minimum wage


With the National Minimum Wage set to rise again in April 2017 from £7.20 to £7.50 for over 25s, companies all over the UK are looking for ways to cut costs and save their bottom line, but are businesses aware of the change?

The more you know

The Government has launched a £1.7m campaign to ensure that businesses are aware of the changes and prepared for when they come into effect. It also encourages employees to make sure they are receiving at least the national minimum.

Despite the investment that continues to go into ensuring workers are paid fairly there are several businesses that fail to adhere to the law and luckily for us, the Government has released their top 10 worst excuses businesses have given for failing to pay their staff the national minimum wage…

  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 the culture not to pay young workers for the first three months as they have to prove their ‘worth’ first.
  3. I thought it was okay 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.

Rate increase

From April, the National Minimum Wage will increase to £7.50 for employees over 25, £7.05 for 21-24 year olds, £5.60 for 18-20 year olds, £4.05 for 16-17 year olds and £3.50 for apprentices.

If you need help to prepare for the National Minimum Wage increase, contact Opsium Employer Support for the latest advice and guidance.

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