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Workplace Pension Contributions

On 6th April 2018, and again on 6th April 2019, the rate for the minimum contribution to Workplace Pensions from both employees and employers is increasing.

All employers, with employees in a work place pension scheme, must take action to ensure at least the minimum amounts are being paid into their pension scheme.

This applies to you whether you set up a pension scheme for automatic enrolment or you decided to use an existing scheme.

If you’re using a defined benefits pension scheme then the increases do not apply.

Up to 5th April 2018
Employer minimum contribution 1%
Employee minimum contribution 1%
Total minimum contribution 2%

6th April 2018 – 5th April 2019
Employer minimum contribution 2%
Employee minimum contribution 3%
Total minimum contribution 5%

6th April 2019 – onwards
Employer minimum contribution 3%
Employee minimum contribution 5%
Total minimum contribution 8%

As an employer you can make the decision to move straight to the 6th April 2019 minimum rates from April 2018 if you wish to eliminate the need to make two changes.

By law a total minimum amount of contributions must be paid into the scheme.  You as the employer must make a minimum contribution towards this amount and your employee must make up the difference.  If you decide to cover the total minimum contribution required, your employee won’t need to pay anything.

This is not a change to pension scheme rules which requires legislative communications but we would recommend as good practice that you advise your employees in advance of the expected change to prepare them for the increase in their own pension contributions and your own pension provider should be able to help with this. With the contribution rate for employees tripling this will have a material impact on net pay for many.

If you offer a salary sacrifice we would advise you review communications issued and seek advice from your pension provider regarding any changes you may need to share with your employees.

There are also changes coming for the Auto Enrolment threshold rates:

  • Earnings trigger is to remain at £10,000 per annum.
  • Lower qualifying earnings will rise from £5,876 to £6,032 per annum.
  • Upper qualifying earnings will increase from £45,000 to £46,350 per annum.

In addition, ensure your contracts of employment and/or employee handbook reflect your new contribution rates and we can help with this.

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Why Tackling Menopause in the Workplace Can Pay Off

Most employers nowadays offer some form of mental health awareness in the workplace, but is enough being done to address the implications that the menopause can cause?  The menopause can arguably be closely linked to Mental Health, considering it can lead to anxiety and depression and can affect every woman differently.

The menopause can have affect women emotionally and physically, as well how they perform and interact with colleagues and customers in the workplace, which can affect their absence levels and work productivity.  Some of the more common symptoms include night sweats, insomnia, lack of concentration and forgetfulness which can lead to problems with work performance, difficulties in making decisions and a decrease in an employee’s confidence levels.  Therefore, providing a supportive and understanding culture could potentially lower the Employer’s risk of a claim for sex discrimination under the Equality Act 2010.

Employment Tribunals

The first successful employment tribunal concerning the menopause was in 2012 and was in the case of Merchant v BT plc whereby the employee alleged that she had been discriminated against on the grounds of her gender when her employer failed to deal with her menopause symptoms in the same way that it would have dealt with other medical conditions. The employment tribunal held this discriminatory and unfair and said that a man suffering from ill health with comparable symptoms from a medical condition (in this particular case, affecting concentration) and with performance issues would not have been treated in the same way.

Previous case law has recommended that employers should take medical information into account in situations of capability and employers tend to seek advice from an employee’s GP and / or Occupational Health.

Considering more woman in the UK are now returning to work after having children and working later in life, employers would be wise to put in place the means to support their female employees through menopause transition.

How can employers help?

There is much advice and support for employers available and Solve. Can offer your business support when a women is going through the menopause.  Below are some useful hints and tips to get you started: –

  • Highlight menopause as part of a wider occupational health awareness campaign, so that all employees know that their employer has a positive attitude to the issue and that it is not something women should feel embarrassed about as well as providing guidance on how to deal with the menopause.
  • Sickness absence procedures should make it clear that they are flexible enough to cater for menopause-related sickness absence. Women should experience no detriment because they may need time off during this time.  Employers may choose to record sickness related to the menopause as an ongoing health issue instead of a series of short-term absences, which will ensure that the Absence Management Procedure will not be invoked unnecessarily and in turn will provide peace of mind to employees when discussing their health concerns.
  • Raise awareness amongst your leadership and management team of how menopause symptoms may affect women in the workplace.
  • Provide women in the workplace with information on how they can get support for any issues that arise as a result of the menopause. Because of the way society treats the menopause, many women will feel uncomfortable going to their line manager, especially if it’s is a man, and other options should be available. This may be through human resources or a welfare officer. Many employers have Employee Assistance Programmes that can act as a go-between and therefore, employers should communicate their Employee Assistance Programme (EAP).
  • Where possible, aim to accommodate flexible working requests that will help women manage their symptoms, which can include exhaustion, anxiety and depression because of sudden changes in their hormone levels.
  • Consider giving employees the means to adjust the temperature e.g. provide a fan, ensure that employees take their rest breaks, and provide cold drinking water.
  • Where appropriate, refer female employees to occupational health.  And ensure that managers are aware of reasonable workplace adjustments that may be necessary to support women who are experiencing the menopause.
  • Promote physical activity, making full use of wellbeing opportunities as an added value benefit by some healthcare and group risk providers.

For help and guidance on any health related concerns, contact us at Solve.

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Fixed Term Contracts – Failing to Renew Can Prove Costly

Fixed term contracts can be effective when used properly and fairly, for example if a business has a specific project that has a limited time period then a fixed term contract would be a good option but it’s important to be mindful of the risks involved when it comes to terminating a fixed term contract.

Employees who are on a fixed term contract have the same legal rights as permanent staff.  There is also the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 to take into account when considering terminating an employee.  So it is not as straight forward as simply terminating once the contract has reached its end date and failing to take into account the risks involved can prove very costly.

When an employee is nearing the end of a fixed term contract take the following points into consideration:

  1. The need to understand, if any, what notice provisions are included in the contract.  Once you know this, you can determine when to start discussing terminating or renewing the contract with the employee.  Depending on how the contract of employment is written, some fixed term contracts may expire automatically on the expiry date or completion of a task but this would need to be specified in the contract.
  2. If there is a requirement to serve notice before the expiry date, failing to do so may entitle the employee to a payment in lieu of notice or an extension to the contract.
  3. If looking to terminate the contract early (with the exception of a gross misconduct dismissal) then it’s important to have a break clause otherwise this could prove costly as the employee may be able to make a claim for loss of earnings for the remainder of the term.
  4. By law, the non-renewal of a fixed-term contract amounts to a dismissal. Even where employment continues past the end of the term, there may still be a dismissal if the terms and conditions are different from the original contract, even if the employee has accepted the new terms.
  5. If an employee has two or more years’ continuous service you can only terminate if you can show one of the five potentially fair reasons for dismissal (conduct, capability, redundancy, illegality/contravention of statutory duty or some other substantial reason).
  6. If using redundancy for the reason for non-renewal consideration will need to be given to the pool for redundancy as well as the availability of alternative employment.  The employee may also be entitled to a statutory redundancy payment.
  7. If a fixed term contract has been used to cover the absence of a permanent employee, the fixed term employee will not be made redundant upon the return of the permanent employee.  In this case you would need to rely on the ‘some other substantial reason’ (SOSR).

In order to reduce the risks it’s important to have clearly written clauses within a fixed term contract and to monitor the operation of a fixed term contract.  It’s good practice to diarise the expiry dates of fixed term contracts so that decisions can be made in good time as to whether a contract is to be renewed or terminated.

For help and guidance on fixed term contracts speak to us at Solve.

Employer Right to Work Checks
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EAT confirms Uber drivers are workers

It has been confirmed by the Employment Appeal Tribunal that the drivers for the transport company Uber are not ‘self-employed’ and are in fact workers by the Company.  Uber operates a digital platform to provide transport services, whereby, drivers sign up online and are connected with customers through a mobile phone app.  Uber had argued that it is no different to the ‘traditional’ cab company and they acted as the ‘agent’ for the drivers and not the employer and maintained that they did not control when and how drivers work.

According to Uber, their guidelines for drivers as to how work should be done are ‘recommendations’ and not obligations, they also argued that there is no obligation on the drivers to perform work for instance they were not obliged to switch on the app or accept driving jobs once the app is switched on as well as the drivers bearing the financial risk of the transaction, Uber can choose to absorb the loss if a customer refuses to pay, but is not obliged to do so.

The EAT rejected these submissions and upheld the decision of the employment tribunal that the drivers are engaged as workers by the company, when the drivers were driving, they are a worker and that is their working time

The reality of the situation was that the drivers are subject to significant control by the business.

It was less certain that the drivers were workers when the app was on and they were waiting for a job to be allocated (as they could in theory be working for multiple companies during this time).  However, the EAT accepted that the tribunal was entitled to decide that the drivers were also working during this period particularly because there was an obligation on drivers to accept 80% of the jobs offered whilst the app is on.  The decision suggests that, whether an individual is a worker during these interim periods will depend on the particular facts of the case and the operating model used by each organisation.

What does this mean for me?

Whether an individual is self-employed or is a worker is fundamental, as worker is entitled to various employment-related benefits such as paid holidays, rest breaks, the national minimum/living wage, auto-enrolled to a qualifying pension scheme, and not to be detrimentally treated for whistleblowing.

This Judgment is very clear, what a Company says in their documents will not determine the status of an individual and in fact the starting point is the reality of that working arrangements.  An Employment Tribunal will look at what you do, the rules and requirements you impose, and the arrangements you have in place, these are some key attributes that will determine the status of your workers / contractors.

If you are at all concerned about the status of those you engage, you should take advice on the reality of the entire relationship.

Employer Right to Work Checks
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Administrative worker wins £75,300 over desk move disagreement

An employer found out that making mistakes when dealing with reasonable adjustments can mean you end up with some very costly consequences!

In Bannister v The Commissioners for Her Majesty’s Revenue and Customs, the employee was asked to move desk from one floor to another because her team was being disbanded.  She told one of her managers that she was an alcoholic and that due to her condition, she could not move desks.  Following a conversation with a manager, the manager noted that the employee apologised that she had turned a small change like a desk move into a big issue.  An Occupational Health Adviser informed the employer that the employee had suffered from depression for about three years and had become anxious when asked to move desk, but said that she was fit to work.  They continued that the employee ‘remains vulnerable to further episodes of this condition, the frequency or severity of which cannot be predicted’ and that her ‘condition is likely to be considered as disabilities because they have lasted for longer than 12 months and would have a significant impact on normal daily activities without the benefit of treatment’.

The employee was issued a first written warning for poor attendance.  After several Fit Notes stating she was not fit to work because of alcohol dependency, anxiety and depression and meetings with management, the employee was told she would be moving.  The employee complained and was told by a senior manager ‘in fairness, he was not aware of issues around previous moves and, to be honest, he had no interest’.

In another letter by an Occupational Health Adviser, the employer was told that the employee was ‘keen to return to work, however she needs to go back to where she was with her desk prior to the absence and that after a few days settling in she will be able to manage in work’.  The employee’s request to return to work with her old team for a short period of time before moving to her new team was declined.  She was dismissed and subsequently appealed the decision to dismiss her and the decision to not be awarded compensation, but both appeals failed.

The Tribunal found that the employee required the ‘security of an established routine at the workplace and that any change posed a threat which unsettled her’.  She was scared of drawing any attention to her and gave a number of examples of how she reacted to stressful situations, for example, she would not board a busy bus or join a queue with more than three people in the supermarket.

It was clear in the Tribunal’s view that this requirement to work on a different floor caused a ‘serious unsettling effect’ on the employee and put her at a substantial disadvantage when compared to people who were not disabled.  She wanted to return to work and would have done so but for this requirement to move desk and change floors.

The Tribunal noted that the employer had offered several adjustments including a phased return to work, a temporary reduction in hours, the elimination of performance targets and a lighter workload. However, they concluded that they had failed to make a reasonable adjustment by not allowing the employee to return to her original desk for two weeks.

She was awarded nearly £75,300 in compensation.

There is a legal duty under the Equality Act to make reasonable adjustments for disabled employees when they are placed at a substantial disadvantage by:

  • an employer’s provision, criterion or practice or
  • a physical feature of the employer’s premises or
  • an employer’s failure to provide an auxiliary aid.

Some examples of reasonable adjustments include:

  • adjusting the recruitment process,
  • changing equipment,
  • allowing a disabled person to make a phased return to work
  • making physical changes to the workplace.

For a worker to be considered disabled under the Equality Act, they must show that they suffer from a long term (i.e. 12 months or more) physical or mental impairment which has a substantial (i.e. more than trivial) effect on their ability to carry out day-to-day activities.  A person will meet the disability definition under the Act if they have an HIV infection, cancer or multiple sclerosis, but someone who has alcohol dependency will not fall within under this definition.

As this case proves failing to make reasonable adjustments can be costly so it’s important to understand what the law requires and how to minimise any risks to your business.  At Solve. we can advise and support with disability cases.

hospitality and human resources

The Importance of HR Support in SME’s

 

It is startling to read how many SME’s in the UK who don’t have HR support.  There can be many reasons for the lack of HR support, such as budget constraints.  SME’s mostly work on a tight budget and focus more on growth and scale of the business versus people and culture related issues. Many SME owners feel that their teams are too small and they can manage their HR activities adequately themselves.

Employers are not being properly educated about the disadvantages they face because of a lack of engagement with HR.

Most businesses – no matter how small – will have specialist support to manage finance, IT and operations, but, don’t realise the benefit of bringing in HR when it comes to the management of their (usually) most valuable asset – their people.

Common issues we are often asked to help employers resolve:

1.     Poor pre-recruitment screening, with promotion decisions based on length of service, not quality of skills, often leading to poor retention rates of the right people who become frustrated working with people in the wrong roles.

2.     People are moved to new roles because they’ve been with the business a long time, not because they have the right skills and experience to succeed in their new role.  This leads to informal conversations with no documentation used to measure performance accurately.

3.     Lack of training and coaching given.

4.     “Warnings” issued on the spot with no documentation to support decisions, and no formal procedures being followed.

5.     No formal policies and procedures in place meaning there is no protection for the manager, the employee or the business.

6.     Absence is not managed, documented or controlled with no return-to-work interviews in place, which often leads to unhappy employees who are picking up the workload of absent colleagues.

7.     Employees unhappy with the way they are managed but feel the culture of the organisation is one that there is no-one to listen to their complaints, or no process for them to lodge a complaint.

8.     No contracts of employment or job descriptions, leading to confusion over terms and conditions and job roles and responsibilities.

Having HR support in your business can mitigate these risks and many others.  As you get in place contracts of employment (which are essential for you to comply with legislation) and structure your policies and procedures with clear standards for managing both good and bad performance, this helps builds engagement and trust.

Well laid out HR practices, these help to remove ambiguities employees may have related to their job role in the business and can help improve employees’ motivation, improve Line Managers skillset in managing people, business efficiency and reduce attrition.

There are many ways to engage with us to ensure your HR support is affordable, the argument that HR is a luxury to SME’s should be revisited before you face the financial consequences of leaving it too late.