Do you expect staff to buy their own work clothing?
Restaurant chains Wagamama and TGI Fridays have both been fined because they failed to pay staff the National Minimum Wage. Wagamama said it had misunderstood rules about uniforms, and this had caused the mistake. It had asked front-of-house staff to wear black jeans or a black skirt with their Wagamama-branded top. This was considered as asking them to buy a form of uniform, and therefore the staff should have been paid for having to purchase the clothing. The same applied to TGI Friday who provided the clothing but asked that staff wear black shoes – and again, should have reimbursed the cost of shoes.
These chains were among 43 employers in the hospitality sector on the government’s latest list of firms breaking the law. Hotel chain Marriott was found to have underpaid 279 of its staff over £250 each on average. Many hospitality establishments expect staff to wear “standard” items of clothing which are unbranded – such as white shirts or black trousers or skirts and if they demand that staff adhere to this dress code then they must reimburse for doing so.
The minimum wage is currently £7.50 per hour for those aged 25 and over and will rise to £7.83 in April. The number of high profile employers included in this latest report shows the scope of the Government’s investigatory powers and the inevitability of negative publicity that now comes with being found to be in breach.
As well as being ‘named and shamed’, businesses can face fines up to £20,000 and even criminal sanctions. Employees who have been underpaid can also bring claims, seeking to recover underpayments going back several years.
Worrying Employment Tribunal statistics published!
The Ministry of Justice has published the provisional tribunal statistics for October to December 2017. These statistics reflect the period of time since tribunal fees were abolished and show a staggering increase in activity in the Employment Tribunals.
Employment Tribunal (ET) claims received have increased by 90% and the backlog of claims has increased by 66%.
From the launch of the ET refund scheme in October 2017 to 31 December 2017, 4,800 applications for refunds were received, and 3,400 payments with a total value of £2.8m were made.
Tax treatment of termination payments due to change soon
The Government has announced changes to the tax treatment of termination payments which will result in tax being applied where previously exemptions applied.
The first £30,000 of a termination package that is exempt from income tax. Anything above the £30,000 limit will be subject to income tax. The change relates to the way in which notice is paid and treated. Previously, if there was no contractual entitlement to pay in lieu of notice then this could be included in the tax free element of any termination payment.
With effect from April this year, the £30,000 tax and NI exemption will only be available for redundancy payments (whether statutory, non-contractual or contractual) and compensation for loss of office but NOT for payments in lieu of notice – even when the contract does not make mention of the employers’ right to pay notice in lieu of working.
Apprentices less popular in Scotland
A policy paper published by the Federation of Small Businesses (FSB) says that a smaller share of Scottish businesses take on apprentices compared to England. It argues that fairer funding could help close the gap. The small business campaign group highlights official figures showing that 15% of employers in Scotland offer apprenticeships, compared to 19% in England.
The FSB surveys suggest that this gap is wider amongst the small business community – with only 12% of Scottish FSB members taking on apprentices, compared to 24% in England.
Scotland has bold ambitions to increase apprenticeship numbers across traditional sectors, like construction and engineering, and in increasingly important industries like data analytics and telecommunications. Skills Development Scotland provides a financial contribution towards the cost of apprenticeship training with firms often making up any shortfall. FSB said that as much as £5,500 less is provided to train an apprentice that is over 25, compared to someone aged between 16 and 19 and is recommending that this is examined to encourage older workers to take on an apprenticeship.
At present, only a quarter of Scottish apprentices are over 25. People aged 25 and over accounted for 46% of apprenticeship starts in England in 2016/17. In its policy paper, FSB suggests funding for this policy could come from proceeds from the apprenticeship levy.
The Scottish Government has a 2020 target for 30,000 apprenticeships to be started annually. In financial year 2016/17, 26,262 apprenticeships were delivered. It argues that more funding should be provided to help Scottish firms take on apprentices over the age of 25, such as parents returning to work or people looking to switch career.
Capability dismissal leads to award of £19,000
A former airport logistics agent for British Airways who was dismissed after an illness affecting his eyes, has won an unfair dismissal claim at an employment tribunal and been awarded more than £19,000.
The employees’ role included driving duties in the vicinity of aircraft. He was dismissed due to his inability to carry out his role after suffering back, knee and eye injuries. However BA did not give the employee “fair or proper warning” that he may be dismissed, and did not act reasonably in treating incapacity as sufficient reason for his dismissal within the meaning of the Employment Rights Act 1996.
The history of this case follows a pattern that many employers would take – regular meetings, occupational health reviews and medical reports from Doctors and consultants. The issue, however, is that at no point in the communication process between BA and the employee, did BA inform the employee that dismissal might be a possible outcome of the various review meetings and neither did the employer genuinely seek to make adjustments to support the employee’s return to another or different role.
The Judge in this case said that BA had a “closed mind” and the employee was awarded £19,074.88, composed of a £10,687.50 basic award, compensatory award of £17,510.50, and £400 for his loss of statutory rights.
Employers must fully consider whether an employee can be given adjusted duties or alternative duties as an alternative to dismissal and follow absence procedures carefully and, before any decision to dismiss for capability, check that they have considered all medical evidence, whether any reasonable adjustments can be made to enable the employee to return to the workplace, and whether there are any alternatives before making any decision to dismiss. Dismissal should always be the last resort.
The difference between bullying and assertive management
Bullying is described by Acas as “offensive, intimidating, malicious or insulting behaviour, an abuse or misuse of power through means that undermine, humiliate, denigrate or injure the recipient”. The key point is that one person’s bullying may not be another’s. Subjectivity comes into play in this area of the law, which makes it a difficult area.
Bullying is most often used in the employment law context as the foundation for a constructive dismissal claim where employees can argue that the term of mutual trust and confidence implied into every employment relationship has been breached. This could entitle the employee to resign with or without notice and bring a constructive dismissal claim. Also, bullying can lead to personal injury claims.
Here are some tips for achieving assertive management that does not constitute bullying:
• Set clear objectives that are regularly reviewed. Addressing performance is part of any manager’s job and it can be made easier if employees are aware of what is expected of them.
• Do not get personal. Do not target an individual’s personal characteristics as this could lead employers into discrimination territory. Keep it neutral.
• Communication is everything. Two people can communicate the same message and it can sound entirely different. Managers needs to be trained to understand how to communicate effectively.
• Understand workloads and listen to the employee. An employee may have a perfectly acceptable reason for falling beneath required standards temporarily. Listen to the justifications and take them on board.
• Keep it private. The employee will be able to satisfy the Acas definition of bullying in feeling humiliated by any sort of public dressing down.
• Praise. Praise is a motivator much overlooked. Introduce positivity where possible.
What constitutes pay?
When businesses are fined for failing to pay the National Minimum wage, the most common reasons cited for underpaying staff is failing to pay workers when they were travelling between jobs, not paying overtime and deducting money from staff wages for uniforms.
There are four categories that can be considered as pay for the purposes of the NMW:
• the gross amount of basic salary;
• bonus, commission and performance incentive payments;
• piecework payments; and
• accommodation allowance.
The accommodation allowance is the one non-cash benefit that can be taken into account for the purposes of the NMW. However, even this allowance has to be considered with caution as, regardless of the notional value of the accommodation provided, the allowance that can be added to the worker’s basic salary is not particularly high. From April 2018, if the worker is provided with free accommodation, the allowance will be a daily rate of £7 or a weekly rate of £49.
Overtime is also an area that can cause organisations problems. The premium paid for overtime work cannot be taken into account for NMW purposes, so if a worker was normally paid £6.50 per hour but is paid £8.50 for overtime, only the basic rate of £6.50 will count. Employers therefore cannot use overtime payments to top up normal hourly rates that fall below the NMW.
Another area that can cause issues is in relation to certain deductions that an employer makes from a worker’s salary. Deductions that are connected to employment, such as costs of tools or uniforms are unlawful if they reduce the overall level of pay below the NMW.
For workers on salaried hours, who are paid for a fixed number of hours’ work a year and are paid in equal weekly or monthly instalments, the following will be considered working time for NMW purposes:
• actual work;
• standby or on-call time where the worker is required to be available at or near a place of work;
• travelling time on business during normal working hours, although travelling between home and work will not count;
• training during normal working hours either at work or elsewhere; and
• absence when the worker is paid their normal pay; ie holiday and sick leave.
Particular difficulties have arisen recently and are likely to continue to be an issue in relation to whether on-call workers are not only available for work but are actually working. In some cases, the worker may be considered to be working and therefore entitled to the NMW while they are relaxing at home, or even sleeping.
Mindless meetings cost Scottish businesses £32k each per year!
More than half the time spent in meetings by Scottish office staff is “unnecessary”, according to new research, costing employers more than £11bn annually.
According to a recent survey, workers spend an average of more than nine hours each week preparing for and attending an average of 3.8 meetings. However, 2.3 of those meetings are deemed “unnecessary”, equal to five hours and 36 minutes of wasted time.
With the typical meeting having seven in attendance, the annual staff costs for unnecessary meetings per business comes to £31,939, based on average earnings data from the Office for National Statistics (ONS).
Of those Scottish workers questioned, 70% said there are too many meetings in the working week. A further 77% said meetings need to be better focused and 79% said the meeting process has not changed since they first entered the workplace.
Gender reassignment discrimination results in a £47k payout
A transgender Primark employee told by her employer she had a “man’s voice” and “smelled like a men’s toilet” was subjected to gender reassignment discrimination, a tribunal has ruled.
In a judgment from December 2017, published on 7 February 2018, the judge allowed the claim for harassment, finding that Primark had conducted “very severe” injury to her feelings and that she was “bullied out of a job”.
Gender reassignment is a protected characteristic under the Equality Act 2010. The tribunal found that Primark did not properly deal with the discrimination or harassment the woman was subjected to on several occasions.
One of her supervisors called her “Alexander/Alexandra” in front of customers and another colleague. The tribunal recommended that Primark adopt a written policy regarding how to deal with transgender staff or those who wish to undergo gender reassignment, and amend materials it uses for employees’ equality training to include references to transgender discrimination.
The Judge said that she had been constructively dismissed and that her treatment violated her dignity and created an “intimidating, hostile, degrading, humiliating or offensive” environment in which she was subjected to gender reassignment discrimination.
The respondents subjected the claimant to direct gender reassignment discrimination by failing to properly investigate the matter and deal with it appropriately. She was awarded £47,433.03, including a 25% uplift from Acas, past and future loss of earnings and loss of pension of £19,872.86, injury to feelings of £25,000, interest on past loss of earnings of £472.50 and interest on injury to feelings of £2,087.67.
Employers simply not ready for the GDPR
A new report has warned that 60% of companies are unprepared for the EU’s General Data Protection Regulation with less than three months until their implementation.
Under the legislation, which will apply to UK organisations from 25 May 2018 companies will be subject to new rules around the collection and processing of individuals’ data, and could face fines of up to £17m, or 4% of their annual turnover, for failing to comply.
Despite this, a new report has shown that both UK and EU businesses have been slow to get their houses in order ahead of the introduction of the new rules. Three in five organisations said they were not yet ‘GDPR ready’, while a quarter were deemed ‘at risk’, suggesting that companies could face significant fines.
A reported lack of preparation for the GDPR could be the result of smaller businesses. According to the report, companies could be forced to spend eight hours a day, or 172 hours a month, on data searches after the implementation of the GDPR, with more than one in three UK-based directors saying they were concerned about their ability to be compliant. More than one in 10 UK companies said they were not confident they knew where their data was housed, while 12% reported that they had not accounted for all databases.
Bevitt advised HR professionals to take initial steps to ensure any UK and EU-based employees were aware of their rights under the new legislation, and that employment contracts were up to speed with the regulation.
The ICO has issued GDPR guidance, so may enforce more collaborative actions to help a business learn about the changes rather than punishing organisations straight away – however, they will possess enforcing actions so, if there is a breach or data is not being processed as it should be, those organisations that have ignored it altogether could face consequences.