The concept of the living wage has been receiving a lot of media coverage recently after it was announced on 5th November 2013 that it was to increase to £8.80 per hour in London and £7.65 elsewhere in the country; basically an increase of £400 per year per worker. More than 5 million people in the UK are paid less than the living wage and this figure has risen by 400,000 in the last year.
Whilst there is no obligation for employers to pay the living wage, 432 are now signed up to the voluntary scheme which is now viewed as a ‘must-have’ badge of honour. The living wage is a figure independently set every year according to the basic cost of living in the UK, and as we all know, the cost of living is ever increasing whilst wages stay stagnant!...
Many are divided on the issue. Supporters of the scheme claim that the living wage improves productivity, recruitment, morale and retention as well as quality of life for workers and their families. Others believe that the living wage would have a negative impact on businesses, especially recruitment, giving fewer opportunities for unskilled workers to find work and experience.
Why not raise the national minimum wage to be in line with the living wage?
Good question. I don’t think that there is a simple answer to this. On the one hand, why have a national minimum wage so much lower than the living wage when we are told that the living wage should be the new standard to pay workers? Why not make the living wage compulsory? On the other hand, political spokespeople have claimed that if the living wage was made compulsory it would not work because it would reduce flexibility within businesses and could ultimately have a negative effect on the jobs market.
What we do know is that the subject of the living wage will be in the news for some time to come. Politicians are jumping on the bandwagon and pledging within their manifestos that tax breaks or economic incentives will be offered to businesses paying the living wage. The main issue will be for the cost of living to fall or businesses to increase the wages of low paid workers in order to retain staff. Watch this space.
Recent events illustrate why an employer should always follow the correct procedure when terminating a contract of employment.
Now, I understand that there are times when employers just want to see the back of their employees in a fuss-free and quick way, however laws are in place to protect employees and prevent any sackings on the spot (within reason). An organisation should have procedures in place to follow when terminating employment, whichever way, and if there is an absence of a procedure then the ACAS Code of Practice should be referred to. Failing to follow this could have severe penalties for employers at tribunal, as was confirmed a few weeks back when a six figure payout for unfair dismissal was agreed between Haringey Council and its former Head of Children’s Services, Sharon Shoesmith, who was removed from office in December 2008 following the ‘Baby P’ scandal.
In December 2008 she learned of her immediate dismissal whilst watching a live televised press conference hosted by the then Children’s Secretary, Ed Balls. Embarrassing to say the least!
In 2011 she won a ruling which deemed that she had been unfairly dismissed because no procedure had been followed. The Court of Appeal remarked that she had been unfairly scapegoated and her removal from office had been ‘intrinsically unfair and unlawful’.
Whether or not she deserved to be sacked is another matter. It was the way in which she was sacked that was the issue and hence why she took her case to tribunal. This is ultimately why the tax payer is contributing to the settlement now.
An employer needs to ensure that all procedures are followed so that statutory rights are met and opportunities to answer a case are given. Failure to do this will make the ultimate decision unfair.
If you need any advice regarding a situation where dismissal may be an option, make sure that you ring our Advice Line before any action is taken.
The recent case of Birmingham City Council v Abdulla and Others has created an increased risk for any UK business that hasn’t implemented and reviewed its equality policies.
Women’s right to receive pay which is equal to men’s has been a rule of law since the Equal Pay Act 1970 came into force. The basic right is that where work is the same, or rated as equivalent, the remuneration must be equal for workers of different sexes. The Equality Act 2010 has since codified discrimination legislation and retained the equal pay provisions.
Despite the length of time the law has been in place it seems that the UK has some way to go before it can be said that women are receiving equal pay to men, a fact which is most evident in light of the claimants in the case of Birmingham City Council v Abdulla and Others. The employee claimants in this case included 170 women and only 4 men, all of whom had ceased employment with the Council between 2004 and 2008.
Under the Equal Pay Act (and subsequent Equality Act) the claimant doesn’t have long to bring a claim; they must register the claim within 6 months of the last day of working for the employer. Most employment law disputes fall to the Employment Tribunal where they are brought and resolved very quickly by comparison to civil court procedures. However, the claimants in this case presented their claim to the High Court where the time in which to register the claim is much longer; the civil court process allows a time limit of up to 6 years. Had the Court refused to hear the claim, leaving it solely within the Tribunal’s jurisdiction, every one of the 174 claims would have failed for being out of time.
On appeal the Supreme Court decided to allow the claimants to bring the claim through the court system which has resulted in the claimants’ right to be compensated for the difference in pay which accrued for their period of employment – despite the fact that the employment ceased up to 6 years before legal proceedings were issued.
On the face of it, it seems very likely that more and more people are likely to bring claims after their employment has come to an end. A great step in the right direction for addressing equality but a much higher risk for UK businesses.
Businesses should take heed and look carefully at their equality provisions within the work force. By focusing on correcting any unequal pay issues within the business now they may be able to avoid potentially costly litigation in the future. However, businesses must be aware that for any employees who have left employment within the last 6 years there is still a continued risk of a claim being brought.
The date from which employers are required to auto-enrol eligible jobholders into a qualifying workplace pension scheme (known as the "staging date") depends on the size of the employer's PAYE scheme on 1 April 2012.
Most employers will have to auto-enrol their workers into a qualifying pension scheme at some stage and there are a few key points to bear in mind beforehand:
- Assign responsibility for coordinating compliance with the pensions auto-enrolment provision
- Decide whether or not current pension provision is adequate
- Establish the staging date
- Choose a qualifying scheme
- Decide whether or not to postpone auto-enrolment
- Register with the Pensions Regulator in good time
- Provide employees with information
Employers have the option of bringing forward their staging date. They also have the option of postponing auto-enrolment by up to three months, although jobholders can ask to opt in during this period, which will override postponement.
The Department for Work and Pensions will give further detail on this staging date as part of a consultation.
February and April are key months for change in the employment law calendar this year and 2012 looks set to have a significant effect on employers, especially with the qualifying period for unfair dismissal increasing to 2 years.
Qualifying period for unfair dismissal
The qualifying period for employees to bring a claim of unfair dismissal increases from one year to two years. The increase will apply only to employees who start a new job on or after 6 April 2012.
New Tribunal Award Limit
The limit on the amount of the compensatory award for unfair dismissal increases from £68,400 to £72,300 from 1st February 2012.
Other changes coming into force on the same date through the Employment Rights (Increase of Limits) Order 2011 include:
Pay and Benefits
The standard rate of statutory maternity, paternity and adoption pay increases from £128.73 to £135.45 per week from 1 April 2012.
The standard rate of statutory sick pay increases from £81.60 to £85.85 per week from 6 April 2012.
The income tax personal allowance increases by £630, bringing it to £8,105. The threshold at which employees pay the higher income tax rate of 40% is reduced to £34,371 from £35,001.
The lower earnings limit for primary Class 1 national insurance contributions increases from £102 to £107.
Is an employer required to pay employees who cannot make it into work because of severe weather conditions?
Unless the employer has contractually promised to provide transport for employees to and from their place of work, the onus is on the employees to get to work regardless of the severity of the weather conditions. If employees fail to turn up for work in these circumstances, the employer is under no obligation to pay them. If an employee’s normal mode of transport cannot be used because of disruption due to severe weather conditions the employer should first encourage the employee to explore alternative means of safe transport. The employer may wish to consider whether the employee could usefully work from home until the weather situation has improved. If this is not a viable option, then the alternatives available are for the employer to advise employees that any time off work in these circumstances will be unpaid, or paid on a discretionary basis but only in exceptional cases. Another option is that employees can request to take the time off as paid annual leave.
Queen’s Diamond Jubilee
There will be an additional bank holiday in 2012 to celebrate the Queen’s diamond jubilee. This is not the first time in recent years that there has been an additional bank holiday to celebrate a royal event, as we all know the royal wedding in 2011 was also marked by a bank holiday.
Traditionally, bank holidays are days on which banks may close for business. The Government has announced that Monday 4 June 2012 and Tuesday 5 June 2012 will be bank holidays. More specifically, the traditional bank holiday at the end of May will be moved to Monday 4 June 2012 and there will be an additional jubilee bank holiday on Tuesday 5 June 2012. The extended bank holiday weekend will apply to England, Wales, Scotland and Northern Ireland.
Buckingham Palace is coordinating a programme of celebrations which will take place over the extended bank holiday weekend. However, not all employees will be entitled to take the additional bank holiday as leave to enjoy the celebrations.
While many employees may assume that they are entitled to take the Queen’s Diamond Jubilee bank holiday off work, there is no statutory right to leave for any of the bank or public holidays.
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