Labour shortages mean more zero hours’ contracts. How do they work?
There are over 800,000 people employed in the UK on zero-hours contracts in their main employment. Those working under such contracts are most likely to be young (aged 16–24), part time, women, or in full-time education, working on average 26 hours a week. However with the shortages of labour in the hospitality industry it is expected that zero hours’ labour is on the increase.
A zero-hours contract means a contract of employment in which the individual can either accept the work offered, or decide not to take up the offer of work on that occasion. It is not best practice for an employer to try and force the worker to work, as this may imply a more permanent form of work status and potentially mean that the terms and conditions no longer suit the requirements of both parties.
The individual should understand that the contract provides flexibility and the number of hours may reduce or cease at the request of the employer. Where the individual persistently refuses work when offered, this may result in future work being offered to others first and it may ultimately influence the employer to terminate the working arrangement.
The advantages of a zero-hours contract to an employer are as follows:
- access to a pool of workers, as demand dictates
- a cheaper alternative to paying agency fees
- no ongoing requirement to pay workers, when the business has no work
When recruiting for a zero-hours contract, the job should be clearly advertised as such. Employers should be clear about how the work is offered and remember that all staff employed on a zero-hours contract are still entitled to statutory employment rights, without any exception.
Retention incentives include offering shares in the business
There has been an increase in the number of small businesses offering their employees share incentives, to retain their loyalty to the business. How does this work?
Providing share incentives is a way to help retain employees who have the skills to help drive growth and success. This type of incentive can build morale in a business and make individual employees understand that there are direct rewards for contributing towards their company’s success.
If an employee receives shares in a company, they will become a shareholder in it. Depending on what rights attach to those shares, the employee could then share in the profits of the company and/or take part in voting in shareholders’ meetings.
Registered companies must adopt governing rules, such as articles of association. Many companies also have a shareholders’ agreement in place. Both documents can be used to regulate the relationship between the employee shareholders and other company shareholders. One matter that the shareholders’ agreement and the articles of association should deal with is the situation when an employee leaves your company. What happens to those shares when the employee leaves – who can buy them and for what price?
What is often seen in the shareholders’ agreement is that the existing shareholders have the first option to buy the departing employee’s shares, rather than allowing the employee to transfer their shares to a third party. In addition, the documents often include the concept of a ‘good leaver’ or a ‘bad leaver’ and depending on the circumstances of the departure will determine the way that the shares are dealt with.
In terms of the price to be paid for those shares, a departing employee who is a good leaver may be entitled to receive fair market value for his shares, whereas a bad leaver may only receive nominal value for his shares. This means it is imperative that any business owner considering “sharing” the business, should take robust legal advice before proceeding!
Legislation set to change to protect tipping
The Government has published a response on its consultation on the protection of tips received by staff in the hospitality, leisure and service sectors. Currently, there are no rules for what proportion of a tip earned should actually be paid to that employee.
Instead many of the 190,000 businesses across hospitality sectors retain some or all of the tips instead of passing them on. The position is also made worse due to the increasing cashless society, as now up to 80% of tipping by customers in the UK is done through card payments. This makes it harder for employees to monitor their tips compared to cash transactions.
The new legislation, aimed to protect the tips and enhance the rights of workers will include:
- A requirement for employers to pass on all tips intended for workers without deducting any money from the tips (other than those required by tax law). Employers withholding tips from workers will now be illegal.
- The introduction of a Statutory Code of Practice which will provide guidance on the distribution of tips so that the process remains fair and transparent.
- A requirement for employers to have a written policy regarding tips as well as a record of how tips are handled and dealt with within the business.
- Any tips must be dealt with no later than the end of the month following the month in which it was paid by the customer.
- The right for workers to request information from an employers’ tipping record, which will enable workers to bring forward a credible claim to an Employment Tribunal if the worker feels the employer is not following the Statutory Code of Practice.
- Employers will have some flexibility around how to produce and provide the tipping record for employees, however they must respond to a request within four weeks of the request being made.
The measures will be included in an Employment Bill, which will be brought forward when Parliamentary time allows.
After the impact of the COVID-19 pandemic on the hospitality, leisure and service sectors, it is anticipated that these changes will provide a financial boost to workers within these industries, many of whom earn the national minimum wage or national living wage and therefore rely on tips to add to their income.
Vaccination argument rumbles on…
A large number of businesses have said that they require staff to be vaccinated against Covid, research has suggested. A survey of 400 businesses found that 70% were planning to implement vaccine mandates, including one in 22% who said that jabs would be mandatory for all workers regardless of any potential exemptions.
Just under half of respondents said they would require all staff to be vaccinated excluding those with a medical exemption.
The survey also found that nearly three-quarters said that an employee’s vaccination status would impact their return to the office, with a third saying that only vaccinated staff would be able to return.
In November, the English care sector will be legally required to have all staff and volunteers fully vaccinated against Covid, this is not the case for other industries but a number of companies have implemented their own requirements including supermarket chain Morrisons, which will be reducing sick pay for unvaccinated staff who are required to self-isolate.
However, employment lawyers have warned that employers have to carefully balance their desire to provide a safe workplace with the rights of their workforce. It might be lawful for an organisation to mandate vaccinations in a limited number of cases – for example in health and care settings – but in most cases it will be difficult for employers to mandate staff to be vaccinated.
Employers must proceed with caution if they are considering the introduction of policies and provisions related to vaccination status as such policies could lead to challenges of discriminatory conduct. Vaccination status may be linked to disability or even philosophical beliefs, and so any policy which places non-vaccinated individuals at a potential disadvantage would have to be objectively justified in an employment tribunal.
It is essential to consult with all employees that may perceive any policy to be detrimental to them, in order to avoid expensive and time consuming litigation.
Starting pay reaches a record high due to a downturn in candidate availability
Experts warn wage growth will not sustain economic recovery and call on government to work with firms to avoid a ‘crisis-driven sugar rush’.
Starting pay for all workers hit a record high over the last month due to an increase in competition for staff, research has found.
The latest report found the rate of growth of permanent starting salaries accelerated again in September to hit a new record for the third month in a row. 57% of the 400 UK recruiters and consultancies polled noted higher pay for new permanent joiners, compared to less than 1 per cent who recorded a fall.
Although there were reports of candidates negotiating higher pay, recruitment experts suggest the surge in starting salaries was mostly because of the increased competition for workers and efforts by firms to attract applicants.
The report also revealed that the latest permanent placements index fell slightly from August’s peak of 72.7 down to 71.8 in September. While this indicated more employers were still hiring new staff than not, it suggests the number being posted into roles was easing.
While higher salaries are good for job seekers, wage growth alone is unlikely to help sustain economic recovery because of limited levers to bring people with the right skills to where the jobs are and increase productivity.
It was cited that it is essential the government works in partnership with employers to deliver sustainable growth and rising wages, rather than a crisis-driven sugar rush. It should be encouraged for business investment, considering an international outlook and develop skills.
The report also found that although the total staff availability index rose from 23.0 in August to 25.3 in September, it remained well below the neutral 50 level, signalling a substantial drop in candidate availability.
Recruitment can be difficult but contact 121 HR Solutions to discuss your challenges and find out how we can help attract top talent to your business or even how salary benchmarking could assist in attracting and retaining employees.
A third of working parents claim caring responsibilities hold them back from career progression
It is claimed that flexible working arrangements are the best way employers can give all employees a ‘fair chance to progress’.
More than a third of employees say being a parent is stalling their career progress, according to a recent study, but experts suggest adopting flexible working arrangements will help businesses support employees.
A survey of parents with children under the age of 18 who were either working or on flexi-furlough in August 2021, found that 35% said that being a parent and having caring responsibilities holds them back from promotion at work. Among mothers specifically, this number rose to two in five (41%).
Almost as many 38% said that the people who worked the longest hours were the most respected by senior leaders in their organisation, while more than two in five (44%) of working parents felt that the senior leaders in their organisation were not positive role models for achieving a good work-life balance.
It was revealed that 14% of respondents had additional caring responsibilities such as caring for a sick, elderly or disabled family member, on top of being a parent. Of this group, half said being a carer was holding back their opportunities to be promoted.
Among all of the surveyed working parents, more than a third (36%) were concerned that taking time off for caring needs would be frowned upon at work, rising to nearly half among those with additional caring responsibilities.
However, there were some positive results for working parents too. More than half said their organisation supports parents and people with caring responsibilities effectively, while two in five said that the pandemic has had a positive impact on workplace culture at their organisation.
Should you have any questions on how flexible working could be an option within your business and support your most valuable asset, your employees, contact us for practical advice and support.
Mother dismissed while on maternity leave and told to ‘go to the Jobcentre’ has been awarded £50k
Judge upholds all worker’s discrimination claims, ruling employer’s conduct caused ‘detrimental and adverse’ stress that affected her ability to breastfeed her baby.
A mother who was dismissed two months after giving birth and told to ‘go to the Jobcentre’ for money has been awarded more than £50,000 for pregnancy and maternity discrimination by an employment tribunal.
The tribunal found that the former employee had been discriminated against when she was fired while on maternity leave. It found that the dismissal had a “detrimental and adverse impact” on her health and wellbeing, and even reduced her milk flow, affecting her ability to feed her child which caused “additional distress”.
The tribunal ruled that the employer, who did not have its own HR department, was nonetheless “not unsophisticated” and said that given its remit of advising on HR functions, there was “no excuse for not knowing the law”. All of the claims for pregnancy and maternity discrimination were upheld.
During the period of maternity leave, the employer was in the process of being taken over by another company. The employee had raised a query over missing maternity pay and was told the employer had closed so she should “go to the Job Centre for any future money”. She went to the Job Centre but was told that they were unable to assist as she was already on maternity leave and that it was up to her employer to pay her. She reverted back to the employer but received no response.
She told the tribunal that after learning of her dismissal and the company’s refusal to discuss her maternity pay, she became depressed and was “constantly crying and stressed”. She also said that her new born daughter was “crying constantly” because her milk flow reduced.
The judge ruled that the companies were “not unsophisticated” and as their main role was to advise HR functions, “there was no excuse for not knowing the law”. The employee had no job during her maternity leave, and this had a detrimental and adverse impact upon her health and wellbeing and this adversely impacted her ability to feed her child, which caused additional distress,”.
The employee was awarded a total of £50,720 plus an additional £12,500 for injury to feelings.
Should you have any questions at all on maternity leave, contact 121 HR Solutions. This case really does evidence how not to treat employees on maternity leave. Employees on maternity leave are in a vulnerable position, with all the associated costs of having a baby, terminating without notice and refusal to pay their statutory payment, it is difficult to see how this could be anything other than maternity discrimination.
Employees feel uncomfortable discussing mental health at work.
Nearly half of UK employees would fear being honest about their mental health in the workplace because they worry it could harm their career, a survey has found.
The survey found 47% said they would feel uncomfortable talking about mental health issues with their employer for this reason. At the same time, the research found there had been a 16% increase in the number of employees taking days off work because of mental health issues.
More than a third (35%) of those who responded said they had taken time off because of their mental health, compared to just 31%of those surveyed in 2020.
This is despite employers offering mental health first aid training which increased by 26% over the same period, which suggests that investment and training towards supporting employees’ mental health was not having the desired impact.
It is positive to see employers providing training, the stigma around mental health was still very much present in the work environment.
Individuals that recognise they need time off to look after their wellbeing should not feel threatened to admit the truth to their employer. The survey results should urge employers to re-evaluate their approaches to mental health.
It is important to create safe spaces in the workplace for conversations around mental health as opposed to providing company-wide training. It can come down to the culture of an organisation, whether metal health is spoken about openly or is it a taboo subject.
Unfortunately, the impact of the pandemic increased many people’s levels of stress and anxiety, and employers needed to be mindful that some of their workforce would need more time to adjust than others.
Employers need to be compassionate, ensure leaders manage with empathy, understand their people’s challenges, and work to help them through these tough times. Employers could help their employees by providing access to professional help through an employee assistance programme and offering paid days off for mental health.
It’s important to still treat this as a time of transition and give employees the time and space needed to adjust to this new world. Most of all, it’s vital that employers do all they can to reassure their people that they are supported and cared about, and that they don’t feel a pressure to please.
A prison officer who was sacked for “gross misconduct” after posting “inappropriate and offensive” comments about Muslims on his Facebook page has had an “unfair dismissal” claim rejected.
The Employment Tribunal dismissed the claim after ruling that the dismissal for breaching the employer’s social media policy was “within the band of reasonable responses” and was “fair”.
The claimant was employed for 10 years by a custodial and rehabilitation services provider before his dismissal on 11 July 2018. He was “well regarded” by his employers as a “capable and professional prison officer” who had “no previous disciplinary history”.
Following an anonymous complaint, he was suspended pending an investigation that alleged “inappropriate comments about Muslims and the Muslim religion on Facebook” had been posted by the claimant while he was off duty and the comments on Facebook could be “damaging to the reputation”, and in breach of the company’s social media policy.
The claimant stated that his posts included phrases which were quotes from Tommy Robinson and were therefore “not his own views”.
The claimant was then invited to a disciplinary hearing informing him that the allegation was one of gross misconduct. At the meeting he suggested that he was not making inappropriate comments but was attempting to “educate” others who were part of the conversation.
However, the respondent held that the claimant’s actions breached four of the company’s policies and amounted to gross misconduct and concluded that dismissal was the “appropriate sanction”, thereafter his appeal was dismissed.
During the tribunal, he claimed that he had no idea that he was not allowed to quote people and that his comments had been “misinterpreted”, describing the respondent’s decision to dismiss him as a “nuclear decision”.
The tribunal decision stated “In deciding whether the band of reasonable responses included dismissal, the Tribunal considers that the respondent’s policy on discipline for discrimination and/or breach of the social media policy is clear gross misconduct. What constitutes gross misconduct in the respondent’s employment needs to be considered within the context of the work.
“The job of a prison officer involves engagement with people of a variety of religions and ethnic backgrounds. The respondent has policies to ensure that prison officers do not discriminate against any prisoner or other staff member with regard to their race or religion.
“The respondent takes a strict view on breach of the equality and social media policy. It was reasonable for the respondent to have such policies and to enforce them.
“In all the circumstances, the claimant’s dismissal for breach of the respondent’s social media policy and rules of conduct was within the band of reasonable responses.”
This highlights the importance of ensuring policies and procedures are fitting with your business!
Consultation is key!
New research released in September by the CIPD suggest that one in five employers have made changes to their employees’ terms and conditions of employment between March 2020 and July 2021.
Whilst many changes were to be expected due to the impact of the coronavirus, not all changes to terms and conditions over the period were negative.
The most common changes were to:
- location of work at 49%,
- hours of work at 47%
- pay levels at 44%,
- redundancy/terms pay at 22%
- access to enhanced contractual entitlements/incentives at 20%.
Among businesses that made changes to pay levels, 50% improved pay, while an additional 38% reduced pay. On changes to working hours where these were made, 44% of employers reduced working hours, compared to 24% of employers who increased them.
The CIPD’s survey of 2,000 employers found that while 19% changed terms and conditions through consultation, negotiation, and voluntary agreement, three per cent – the equivalent of 42,960 employers in the UK business population – did so through dismissing staff and rehiring them on new terms, also known as ‘fire and rehire’.
According to the Sun, British Gas fired around 500 workers who install and repair boilers and heating systems as part of a “fire and rehire” scheme.
The CIPD said “While our research shows this is not a widespread tactic, more progress can still be made in avoiding this practice, which creates a high risk of legal claims, reputational damage and an adverse effect on employee relations”.
Changes to Terms and Conditions of Employment should always follow extensive guidance from 121 HR Solutions in relation to consultation and the decision to dismiss should be when all other alternatives have been considered!