Summer HR Horror Stories – And How To Avoid Them In Your Business

Any time of the year brings challenges for business owners when it comes to managing a team of people, and the summer is no different. Everyone might be in a slightly better mood when the sun starts to shine, but there are potential issues that you need to be aware of to ensure the smooth running of your operations. No one likes to think about the worst case scenario, but being prepared and thinking about your plan of action is always better than being caught off-guard.

Here, we’re going to take a look at a few HR horror stories from the summer months, and explain how you can avoid the fallout in your business.

A key member of staff gets stuck in a foreign country

Millions of British holidaymakers fly out to sunnier climes every summer, and most journeys are without any glitches. But what would happen if your member of staff got stuck in a different country due to a cancelled flight, and they’re due to meet a very important client or deliver a big presentation? Back in 2010, the ash cloud from a volcanic eruption in Iceland caused massive travel chaos.

The reality here is that if a similar situation struck, there’s very little that you can do about it. The key is making sure that you’re not putting your business in a situation whereby one member of staff is irreplaceable. There should always be someone who can step up and make sure that the job still gets done.

You see a ‘sick’ member of staff enjoying a holiday on social media

You think that your employee is absent due to illness. But then you see them tagged in a photo on Facebook, looking very well and enjoying some beach time in an exotic resort. What do you do next? Well first of all, it’s wise to resist jumping to conclusions. The picture could have been taken a long time ago, and you might have simply got the wrong end of the stick.

If you suspect though that your policies aren’t being adhered to, then it’s vital that you follow your own rules and investigate the situation before making a decision about the best course of action. This is why having robust and up to date policies is absolutely essential.

Productivity drops through the floor, and targets aren’t being met

Many workplaces face a productivity slump over the summer season. Staff are out of the office, looking forward to holidays, and their social lives might step up a level while they enjoy beer gardens and barbecues and festivals. It’s normal for output levels to vary depending on the time of the year, but you can’t just let the situation continue.

As we head towards the end of the summer season, it’s a great time to consider how you’ll ensure that your business and your staff are fully prepared for a big push towards achieving your goals in the final quarter.

 

Maybe you have an HR horror story of your own that you know you need to deal with before it spirals out of control? We can help you at The Human Resource. Get in touch today on 07884 475303 to arrange a no-obligation consultation, and we can discuss how we might be able to work together to overcome your people management challenges.

 

 

  

What if you refuse annual leave, and the employee takes time off anyway?

You don’t need us to tell you that the summer period is peak season for staff members wanting to take some time out of the office. The kids are off school, people are thinking about a few weeks in the sun, and the holiday requests start to come rolling in.

All business owners know that it’s essential to have a robust policy in place to manage leave requests and ensure that they’re handled fairly and efficiently, so you can fulfill your duties as a responsible and fair employer, and also make sure that organisational requirements and targets are being fulfilled.

But what happens when you’re forced to decline a request for leave, and then the employee in question fails to turn up for work anyway? The initial reaction might be to think that they’re taking the Michael, and that it’s time to roll out your usual disciplinary procedures. In some cases, that might indeed be appropriate. Let’s not jump to conclusions though. Take a step back, and look at the full picture.

If your employee has called in sick in line with your absence policy, then of course it might be an entirely genuine coincidence, and it wouldn’t be advisable to wade into the situation full of accusations.

If, however, your employee simply doesn’t turn up to work and provides no reasonable explanation, then it’s a different kettle of fish. In these circumstances, you should launch an investigation to establish whether the absence was for genuine reasons. If you determine that it’s a disciplinary issue, then your usual policies and procedures should be followed.

Of course, these situations are much easier to handle if you already have systems in place. No one expects things to go wrong, and when you’re managing the day-to-day running of your business, it’s easy to neglect the finer details of your HR provisions. Until you’re faced with a situation that you know could escalate into a disaster if it’s not handled properly.

You’d be amazed to know just how many business owners overlook things like this until an issue arises. You’re certainly not alone, and we’re not here to judge. But we can help you to get things in order – whether it’s as a precautionary measure to save you from headaches in the future, or you’ve found yourself facing a problem that needs to be handled sharpish.

Either way, give us a call at The Human Resource today on 07884 475303, and we can arrange an initial no-obligation consultation to discuss where you are right now, and what you need to do to move forward towards better peace of mind.

Should You Have A Summer Dress Code For Your Employees?

 

There are some pretty weighty issues kicking around in the world of employment at the moment. We’re still in the dark about what will happen as a result of Brexit. No one really knows just yet whether the new government will hold together. But the temperatures have been hitting some pretty lofty heights recently, so there are more pressing issues on a lot of people’s minds…

Like, what exactly you’re supposed to wear for work when the mercury is hitting 30 degrees.

If you impose a dress code on your employees? Then it’s worth considering whether it needs to be revised over the summer months. It’s the kind of thing that you won’t regularly give much thought to, but when the baking heat hits us, it’s the only thing that your staff can talk about.

You might decide that it’s the reasonable thing to do to allow your staff to relax their uniform a little bit. Whether or not this is really appropriate though will cone down to the role that they have in your business, the nature of the service you offer, and how much contact they have with your customers and clients.

Health and safety is a key issue here, and sometimes hard hats and steeled capped boots might just be 100% necessary. Comfort is important, but keeping your staff away from danger should always be your number one priority. If they’re struggling to carry out their roles because of soaring temperatures, then you need to reconsider how their days are mapped out and what you can do to support them.  

Presentation is another concern, but it’s fair to say that plenty of businesses are stuck in the dark ages when it comes to this. It’s worthwhile to think about the individual circumstances of your organisation.

If you run an accountancy firm, and your staff are meeting corporate clients? Then smart dress is obviously appropriate.

But if you’re a small clothing retailer with a hip clientele who come through your doors to access the latest fashions? It’s a different story.

If you’re an up and coming tech firm serving creative industries, and you’re eager to make your mark? Somewhere in the middle is likely to be the order of the day.

Back in 2014, Starbucks took a u-turn on its anti-tattoo policy, and finally accepted that no one really cared if their barista was adorned with body art – and that actually, many of their customers would prefer it.

There’s an interesting conversation to be had here about your employees serving as a mirror to your customers, and how similar styles can foster better rapport and more trust.

The key takeaway? Dress codes are sometimes important. But the safety and comfort of your staff are paramount. Don’t get stuck in old ways of working that might not be serving your business.  Contact us today at The Human Resource to discuss ideas about adapting your ways of working, and how to introduce changes.

How to manage teams in the midst of change

 

“It is not the strongest or the most intelligent who will survive but those who can best manage change.” Charles Darwin

And this holds true for change in the workplace too.

If you can manage your team effectively through change, helping them to adapt and adjust, it’s much more likely to be successful.  Investing your time will pay dividends following this Four E’s structure:   

1       Embrace

 Communicating a constructive mindset is the first step to embracing change – whether or not team members ‘like’ or ‘agree’ with it: 

• Make time for the team to discuss the change together openly. Put it in context, explain why it’s happening, why it’s necessary and what it entails.
• Be open and realistic about the pros and cons. This will encourage constructive ideas about any issues and help the team to buy into the change.  Listen to concerns and show you understand, especially normal feelings of being unsettled and unsure. 
• Invite questions and either respond immediately or find out answers and follow up with them later.

 

2       Evaluate 

• Provide key facts to answer questions and concerns
• Evaluate the change with the team, involve them in assessing its impact and gaining clarity in their minds so they can overcome their doubts and fears.
• Ask the team for their reactions and acknowledge any reservations. Ask - “What would help you make the adjustment?”
• Identify any challenging areas that might need further support. If difficulties are raised which can’t be resolved immediately, make a note and follow up.

3       Evolve

 

• Help the team to adapt and evolve their behaviours to begin to ‘have a go.’
• Identify skills and learning solutions that will help the team adapt to the change
• Be visible and present to deal with questions and identify issues.
• Advocate a ‘one step at a time approach’ to build confidence and make sure the team learns from mistakes.
• Be fair and supportive - and encourage the team to be patient and supportive with each other.

4       Engage 

• Give people the freedom to ‘get on with it’ and practice, so that they stay focused and start to commit to the change.
• Invite the team to use their initiative, adopt a “keep on learning” mindset and continually improve their performance.
• Give regular feedback to reinforce learning and boost confidence. Show appreciation and highlight the progress the team has made and give credit on their achievement.
• Review progress at team meetings and encourage individuals to share their knowledge with other members of the team.
• At every opportunity remind the team of the purpose of the change and the priorities.

 And finally! Be transparent with the team. There is no crystal ball to determine in advance whether or not the change will work.   No one can predict every eventuality - which means that some changes will be changed again! 

 

This is a Guest Blog by Melanie Luteijn of Go Further Goals, a Training and HR consultant with over 20 years’ experience helping SME’s across a range of sectors thrive and achieve their goals. She believes that engaged employees are integral to business success. All employees must have clarity, conviction and confidence to perform effectively and fulfil their potential at work. Go Further Goals can help by designing and delivering tailored training solutions that fit the business.

 

 

Employment tribunal judgments are now published online

 

Employment tribunal decisions are now available online and can be accessed by anyone free of charge. The intention is that all future decisions will be published on the website.

What impact will the publication of decisions have for businesses and employees?

Some employers already screen job applicants by viewing their social media, so using the new online tool to check if applicants have brought claims against previous employers would be a simple extension of the vetting process. Some job searchers will fear that businesses will “blacklist” anyone who has taken a previous employer to a tribunal.

 The fact that tribunal decisions are accessible online also has implications for many employers.

 The fear of an employee’s tribunal claim finding its way into the press has always had an influence on an employer’s attitude to tribunal proceedings and some employers have preferred to settle claims rather than incur any adverse publicity or reputational harm arising from tribunal proceedings.

 Although the majority of tribunal hearings have always been in public, the risk of adverse publicity previously has been relatively small. However, the risk for businesses is now much greater under the new system of online publication of decisions. As a result, some employers may be more inclined towards a quick settlement when threatened with tribunal proceedings, a fact that may not escape many employees who have a grievance.

 If a settlement can be reached before a hearing, there will be little information that can go on to the website, and virtually none about the dispute itself.  However, tribunal decisions made after a hearing contain a lot of factual detail about an employer’s decisions and procedures, and significantly can contain critical assessments of the conduct of the employer’s witnesses.

It is not just employers’ names that will go into the database; individual managers in the business who are also named as respondents to a discrimination claim will have their names published as part of the record. Even if they are not listed as parties to the claim, they are likely to be identified in the judgment and may be the subject of adverse criticism, particularly if there are allegations of bullying or harassment.

Another possible implication of the new system is that employees who bring a claim are likely to come to the hearing with copies of previous decisions made against the employer and will encourage the tribunal to draw adverse inferences about the employer from findings made against it in previous decisions, particularly those relating to discrimination claims.

The online database is likely to be here to stay.  It remains to be seen what impact it will have on the tactics employed by those involved in disputes. However, it is fair to say that the increased accessibility of tribunal decisions is likely to have consequences for many businesses that should not be overlooked when an employment dispute arises.

 

This is a Guest Blog by Tony Brown.  His law firm, Bath Employment Law, specializes in helping employers meet their employment law obligations in a way that supports their business objectives, protects their reputation and minimises operational disruption. He has advised employer clients on employment law for more than 25 years.

 

 

 

 

 

 

 

 

 

 

 

Why You Should Never Download Your People Policies Online

 

 If you’re like most employers, then the very first time that you realised that you were going to need some people policies to make sure that you’re compliant with the law and doing everything you can to drive performance and engagement, you probably carried out a quick Google search to grab what you needed.  

It seems like the obvious place to start. You’ve no doubt picked up a ton of valuable business advice online during your time as an entrepreneur, so search engines often become your trusty advisor when it comes to the things that you just don’t know.  

Of course though, it pays to exercise more than just a little bit of caution. You’d know better than to search for medical advice online, or just hope for the best when it comes to what you’ve heard about managing your finances… So should you really trust Google to give you the policies and templates that have the power to make or destroy your business?  

Here’s why you might want to have a rethink…

You have no real idea where your advice is coming from

You don’t have to be an expert legal advisor, or even an HR consultant, to knock up a website and share your views and opinions online. Pretty much anyone with a laptop and the patience to watch a few YouTube videos can do it. You might say that it would be pretty pointless for someone to intentionally give you the wrong advice, and that’s probably true. But it’s not worth leaving anything to chance.

Working with a skilled HR professional will make sure that your documentation is informed by legal requirements and cutting-edge best practice.

The law changes regularly

What applies right now in terms of good HR advice isn’t necessarily going to be good advice in 6 months from now. New legislation is released on a regular basis, and it’s your job to make sure that you are compliant.

When you access information and templates online, you can never be certain when they were last updated. Of course, we always keep you up to date with what you really need to know, so it pays to sign up for our free updates.

One size doesn’t necessarily fit all

It’s true that the law applies across the board, regardless of what kind of business you run. You’re not exempt from following the rules just because you have just a few employees, for example. Still though, there are certain things that only apply to businesses of a certain size, and what works for a large multinational corporation isn’t necessarily going to work for a small family business.

When you work with a professional to get what you need, you can ensure that your practices are fit for purpose. Your HR consultant can get to know your individual needs, and craft a strategy accordingly.

There are times in your business when doing a few online searches is going to give you exactly what you need. But when it comes to managing your most valuable asset – your people – it’s never worth cutting corners.

If you’re concerned about whether your practices are hitting the mark, get in touch today with The Human Resource on enquiries@thehr.co.uk  and we can have a no-obligation chat about where you stand, and what your options are.

 

 

 

 

What To Do When An Employee Unexpectedly Resigns

 

So things are ticking along nicely in your business… Your people are engaged, productive, and they’re doing brilliantly. Sales are on the rise, and you’re feeling quietly pleased that you’ve managed to grow and nurture such an awesome bunch of employees.

But suddenly, there’s a spanner in the works.

Completely out of the blue, a key member of staff tells you that they’re moving on to pastures new. In a small business, this can be a serious blow, and it can have a real impact on your bottom line if it’s not managed effectively.

So let’s take a look at what you need to do, in practical terms…

Establish exactly when the person will leave

Any employee with over a month’s service has to give a week’s notice, and the individual’s Terms of Employment will often specify longer than this.  Check on the notice period that applies to the person resigning, and agree the leave date.

This way, you can sort out the outstanding admin arrangements, including payroll, and start to work out your next steps so there’s minimum impact on your business.

Where there’s a long notice period, employees sometimes ask if they can leave before the end.  While you don’t have to agree to this, there won’t be much point keeping a disengaged team member around once they’ve completed their handover, especially in a customer facing role.  Consider a compromise so that outstanding holidays are taken at the end of the notice period: you’ll have to pay them anyway.

Carry out an exit interview

You can’t retain everyone you recruit, but it makes sense to keep an eye on the reasons why people move on to different things. An exit interview, informal and in private, will allow you to pull together some valuable feedback about why your member of staff decided to leave. It may uncover common factors in the workplace that, if improved, would help to retain other team members, such as lack of career prospects or problems with colleagues.

You can’t make any assumptions unless you ask the person! There are often immediately apparent reasons and then underlying reasons.

A good structure is to explore the pull and then the push factors: start with the new role and why it attracted them, and move on to the reasons for leaving – especially what might have encouraged the person to stay.  Finish on a positive note and ask what they’ve enjoyed about working for the company.

Remember that because you’re the boss, you’re not always going to get the full and complete truth. It might be worth outsourcing this part of the process, so you can be sure that you’re getting more reliable and meaningful information to work with. The Human Resource can do this for you as retained HR consultants.

Craft your continuity plan

We appreciate that it’s not easy in a small business to plan for key people leaving but once you have the resignation, you’ll need to move quickly to work out how you’ll make sure productivity remains high, and your business doesn’t suffer.

Part of this is likely to involve looking for a new member of staff.  Factor in at least a month to recruit a replacement, often several months.  If you really need to move quickly, consider an agency temp or fixed term contactor.

For now, consider how you can bridge any gaps by using your existing workforce, without making unreasonable demands. It may not be ideal, but there’s often a silver lining: you could be giving an ambitious employee an opportunity to step up and broaden their experience.  

Make sure the person leaving gives a proper handover so that work continuity doesn’t suffer in the short term.  Most people take pride in making sure their job is done properly and would hate to think of everything they’ve done being wasted when they leave.  You can use this potential co-operation to make sure they pass on the detail and know-how.  This could be to others in the team, to you, or just handover notes.

 

Thank your employee for their contribution

Keep the future in mind: the person leaving could go on to refer business your way, or they may even become a customer or a client in the future.

 

And of course, you definitely don’t want to face the fallout that could come with your employee ending their time with you on a sour note. A little bit of consideration can go a long way.

 

If you’re currently dealing with a surprise resignation, or you’re worried that it might happen in the not too distant future, then get in touch with us at The Human Resource on 07884 475303 or enquiries@thehr.co.uk. We can have a chat about your options, and help you navigate your way through the potential pitfalls.

 

How long is enough time off work when a family member dies?

 

You may have heard that Facebook’s Chief Operating Officer Sheryl Sandberg recently announced that the company’s employees can now take 20 days of paid leave if an immediate family member dies.  

 

The widespread publicity around this generous bereavement leave has raised questions about how long off work is really enough when a family member dies.  How far can you set a policy in stone that will be right for everyone?  And does your approach at these extremes ripple out to demonstrate what sort of employer you truly are?  

Sheryl Sandberg herself has spoken publicly about the impact of the unexpected death of her husband back in 2015 and the time she needed away from work to grieve and support their young children. 

In a statement issued via Facebook to announce the policy change, she said: “Companies that stand by the people who work for them do the right thing and the smart thing – it helps them serve their mission, live their values, and improve their bottom line by increasing the loyalty and performance of their workforce.”  Certainly there’s evidence that supporting employees through personal issues can increase their loyalty and performance in the long term.

Though many issues in the workplace are sensitive and difficult to handle, it could be said that this is one of the very hardest to navigate.

As a leader, this kind of situation can leave you wondering what to do for the best. Of course you’re conscious of the needs of your staff, and you want to make sure that they’re supported during what is one of the most stressful and upsetting times in their lives…

But you also have a business to think about. And it wouldn’t serve anyone at all for you to not have robust and consistent policies that you can implement in such situations.  

Let’s consider the legislation when it comes to bereavement leave. Here in the UK, there is no statutory right to receive paid leave after the death of a loved one or a family member. Workers are however entitled to take a ‘reasonable amount’ of unpaid time off when they have experienced the death of a dependent.

Ultimately, this means that it’s down to you to decide what’s fair, and how you want to make sure that you strike an effective balance between being a sympathetic and reasonable employer, and ensuring that day-to-day operational requirements are being met.

For many, returning to work can be a positive distraction and a chance to regain routine. But if pressured back into work before they are ready, there is a chance that the employee won’t be very productive and it may even cause a delay in the grieving process. 

The issue of bereavement leave is something that you might not even think about until you find yourself trying to navigate your way through a particularly sensitive set of circumstances. But it’s the kind of situation when you need to know exactly what your approach is going to be - because there will be plenty else to work through. 

The bottom line here? No one likes to think about the practicalities of creating a bereavement policy. Making decisions now though is likely to save you – and more pertinently – your staff a great deal of heartache in the longer term.  

 

If you’d like to talk through your employment policy in this sensitive area or any other, or a particular situation that’s arisen for an employee, we will advise you on the options and most pragmatic approach for your business.  Contact The Human Resource on 07884 475303 or enquiries@thehr.co.uk.  Our approach: a head for business, a heart for people.

 

Most expensive mistakes with employment

The road to employment tribunals is paved with good intentions.  Nobody sets out saying “I want to be really horrible to my staff”.  But making the wrong call or allowing damaging behaviour to go unchecked can prove mightily expensive.  The average compensation awarded at an employment tribunal now stands at £12,148, plus the average cost of defending for the employer is £8,500.  This brings the average cost of a tribunal to £20,648 for employers. It can be significantly higher if there’s an element of discrimination.  Plus there’s the copious amounts of management time spent putting the details of a defence together.

Much of this outlay is entirely preventable.  The right interventions, a proper understanding of procedure and the ability to nip trouble in the bud can be invaluable.  Here are the most common legal mistakes in UK workplaces – and how to stay out of the dock by eradicating them!

1       Overlooking employment contracts

One simple thing employers must get right is to issue a written statement of terms and conditions within 2 months of someone starting work.  If an employee later makes a successful claim, there will be a mandatory award for not providing this which can be as much as a month’s pay.

A contract of employment is typically the first point of reference in a tribunal, and if it’s out-of-date or there are clumsy omissions, this could result in a higher compensation award. Update the terms in writing when there’s a pay rise or work arrangements change, otherwise this could dent your credibility at a tribunal.

 2       Avoiding difficult conversations about performance

Managers often fail to give employees the message early enough that their performance in the job is below the standard required.  Don’t leave it until breaking point, when you’re likely to over-react.

Not having those difficult conversations, or not making them clear enough, is likely to damage any defence against a claim.  Don’t be ambiguous or subtle.  Say enough so that the employee fully understands, back it up with clear examples and make it relevant to the job. Not clearly articulating and documenting your concerns is a short cut to a legal quagmire.  

3       Making assumptions about maternity

So many high profile tribunal cases involve pregnancy that with redundancy selection, there’s a tendency to over-compensate – landing the employer quite unintentionally in hot water! 

For example in one case where a male solicitor was selected for redundancy instead of his female colleague on maternity leave, damages of £123,000 were awarded to the male solicitor.  It was found that the selection decision was swayed by the woman receiving artificially inflated ratings in one aspect of the firm’s redundancy points system.

4       Overlooking harassment

Harassment cases can be costly for employers: not just financial damage, reputation really takes a battering.  When managers tolerate a culture of sexist or racist behaviour, there are potential consequences.  Employers often take the side of the “heavy hitter” when there’s a complaint, or apply a light touch and fail to get to the nub of the issue.  That means they don’t address complaints properly.

One example is a recent case where a banker nicknamed “Crazy Miss Cokehead” by male colleagues was awarded £3.2 million for sexual harassment. Her manager had not only tolerated gender-based harassment from her workmates, he had also sent her offensive emails and ignored her complaints.

5       Brushing off banter

Discrimination claims typically attract the highest compensation payments, often a six figure sum, and workplace comments and nicknames made apparently in jest can be used as evidence.

You’ll remember the “Gramps” case last year where workplace banter came back to bite?  In this case workmates had referred to an employee close to retirement as “Gramps”, which suggested that ageist attitudes were tolerated in the workplace. His manager told the tribunal he hadn’t seen a problem with it if everyone was getting on.  When he was selected for redundancy, this supported his claim for age discrimination and he was awarded £63,000.

It can seem harsh to quash workplace banter.  But sometimes you have to as manager.  It’s a manager’s role to set, monitor and enforce standards and this includes nipping banter in the bud.

6       Car-crash consultation

Not consulting properly with employees during redundancy negotiations or after a TUPE transfer has the potential to be one of the costliest errors you can make in the workplace.

If you make people redundant without consulting at all, or not for long enough, everyone affected (not just those in the redundancy or transfer pool) can make a claim.  Where there's no redundancy consultation,  the tribunal can make a protective award that entitles the employees to pay for up to 90 days, plus  notice pay and any statutory redundancy pay.

In TUPE transfer negotiations, it’s a commercial exercise and it can be a challenge to allow enough time for electing and consulting with employee reps. Allowing enough time for consultation could save a great deal in the long run:  TUPE law provides for a maximum award of 13 weeks’ pay if it’s not done.

 7       Not considering all the evidence

Things often go awry during the disciplinary process, especially at the investigation stage.  The person investigating possible misconduct should restrict the research to setting out the facts and a conclusion, keeping an open mind.  It’s better, where possible, to have a separate person decide on follow-up action. 

It’s also important to consider all the evidence available and take account of the employee’s explanation.  In a recent case where a bus driver was dismissed after testing positive for cocaine via a saliva test, the claimant was able to show via a follicle test that he was clear and that the cocaine had been transmitted from contaminated bank notes.  This line of reasonable defence was not followed up, and the bus driver won his unfair dismissal case with an £84,000 award.

 8       Not following the ACAS Code of Practice

Getting the disciplinary process wrong is an issue that crops up again and again in unfair dismissal claims.  By wrong, we mean that employment tribunals take into account whether managers in charge of the process have followed the ACAS Code of Practice.  Not following simple processes – such as not warning the employee beforehand of the possible consequences of disciplinary action so they can defend an allegation properly - can provide ammunition for legal action.

In a recent case against ASOS, one of its employees was dismissed for abusing the staff discount policy by processing her own refunds. A tribunal found that she had not been made aware that she was contravening any policy, nor had she previously been challenged, so she had continued to act on the understanding that processing her own refunds was acceptable.  Because ASOS had breached the ACAS code, her award for unfair dismissal was increased by 10%.

Be aware of the key points of the ACAS Code, such as the employee’s right to be accompanied and to see the evidence against them.   It won’t eliminate the risk of a tribunal altogether but it could reduce the size of the legal bill and potential award.

It’s not making a difficult assessment on complex legislation that will trip you up, it’s the day-to-day stuff.  We give pragmatic, practical advice about what’s important when you’re managing, and how to stay out of the employment tribunal.  Contact us at The Human Resource for a no-obligation consultation to overhaul your processes, or for advice on a nagging employee difficulty.

 

 

Considering pay reviews in 2017?

 

 

If you’re recruiting into the business or find you’re losing people to similar jobs outside for higher pay, this is the right time to look at the rates you’re paying.

Maybe you’ve had to recruit in at a higher salary than your existing people doing the same job? – or you can see that you’ll need to, in order to secure the right person? 
 

This is a good opportunity to even things out so all your people are being paid the market rate for the job, a rate that reflects their level of skills and value to the business.  Or just imagine how your most skilled long serving person would feel if they find out you’ve recruited someone with less experience into the same job and paid a few thousand more!  Resentment and resignation are likely to follow.  Pay may not be a motivator, but it can certainly be a demotivator!

Plus, awarding a salary increase before and not after a valuable employee finds another job paying a lot more and hands in their notice has to be so much better in terms of the psychological contract.  You don’t want to try managing the expectations of an employee who’s been given the impression they have the power to negotiate their pay.....

There’s evidence that workers are increasingly prepared to quit their job without first securing a better position, indicating that there’s a high degree of confidence that other work is out there.   

And there is: there are almost 750,000 vacancies available, one of the highest numbers on record, and unemployment is at its lowest for 11 years.  It may mean you face pressure this year as an employer to pay more to gain and keep the staff you need.

More pressure on pay may come from inflation.  At a time of rising prices it’s likely there will be pressure from households demanding more pay to maintain their living standards.  The inflation rate is already picking up from its current 1.6% and could hit 3% or more by the end of the year, caused in large part by the fall in the value of the pound pushing up the price of imported goods.  It means the same take-home pay will buy less.   

Of course affordability for the business is the first consideration with pay increases.

Costs for businesses are on the rise, with the effect of exchange rates and increased business rates – and average employment costs are rising this year too for most UK employers. Employers with payrolls over £3million will be paying 0.5% of their wage bill as apprenticeship levy from April, minimum wage rates increase a little, and pension auto enrolment with its mandatory 1% contribution will be rolled out to the smallest and newest employers. 

So it’s likely that this year, to offset the extra costs for employers, average increases will fall despite the pressures of inflation on take-home pay.   Most pay awards during 2016 were in the 1% to 3% range, and in the 3 months up to January 2017 they were 2.7%.  Average increases are predicted to fall to 2.2% this year.

But it’s likely there will be higher pay increases for staff in specific jobs or industries where there are skill shortages, where employers will have to pay a premium to recruit from outside.  And where existing staff will find it relatively easy to find other jobs paying more.

The Human Resource will be pleased to advise your business on pay policy, bonus schemes, benchmarking and salary review.  Contact us today on 07884 475303 or enquiries@thehr.co.uk for a free informal discussion.

Are your freelancers part of the sham self-employed?

 

Q:      When is a self-employed person not self-employed?

A:      When they’re a really worker…..

Plenty of small businesses use freelancers to give them flexibility in meeting customer demand without the legal obligations and responsibilities of having employees.  The freelancer pays their own tax, and doesn’t have to be offered a set number of hours a week.

But here’s a sorry tale where this has worked out very expensive for a plumbing business.  And it’s now likely that similar arrangements will have to be reviewed carefully.

A plumber, Gary Smith, had signed an agreement with his company Pimlico Plumbers Ltd where he was described as a “self-employed operative”.  The wording of the contract suggested that he was effectively running his own business, providing a service to Pimlico Plumbers.

However there were some indications in his contract that in reality, he wasn’t genuinely self-employed.  For example, he was required to wear Pimlico’s uniform displaying the company’s logo, use a van leased from Pimlico (with a GPS tracker and the company’s logo), and work a minimum number of weekly hours.

On the other hand, he could choose when he worked and which jobs he took, was required to provide his own tools and equipment, and handled his own tax and insurance.

All went smoothly for 6 years until Mr Smith suffered a heart attack and decided he wanted to reduce his working days from five days a week to three.  Pimlico Plumbers refused his request, took away the branded van and terminated its agreement with him!

Mr Smith has now successfully brought a claim for disability discrimination.  He argued that he was entitled to basic workers’ rights – and this includes protection against unlawful discrimination.

Pimlico Plumbers argued unsuccessfully that Mr Smith was an “independent contractor”, rather than a worker or an employee, and therefore had no claim. 

The Employment Tribunal, looking at how Mr Smith worked in practice, found that he was a worker not self-employed.  Although he had registered as self-employed with HMRC and paid his own taxes, as far as employment rights are concerned the decision is that he should be legally classed as a worker because:  

• he was obliged to provide his services personally
• Pimlico Plumbers was more than just a customer of a business operated by Mr Smith.

Why does this matter?  Because people legally categorised as workers have the same rights not to be discriminated against, to minimum wage, to paid annual leave and to rest breaks as employees, and depending on earnings, need to be included in pension auto enrolment. 

So Mr Smith is now pursuing claims for disability discrimination and 6 years' arrears of holiday pay against Pimlico Plumbers...

But we need to make the distinction that workers aren’t the same as employees.  They don’t have the full range of protections given to employees, for example they aren't entitled to minimum notice periods, they aren't protected against unfair dismissal and they aren't entitled to redundancy pay. 

 General secretary of the TUC Frances O’Grady commented: “This case has exposed once again the growing problem of sham self-employment.  Unscrupulous bosses falsely claim their workers are self-employed to get out of paying the minimum wage and providing basics like paid holidays and rest breaks.”  Oh dear!

If you’re in doubt about whether your people are genuinely self-employed, or workers, or employees, contact The Human Resource today on 07884 475303 for expert advice.   We can give you confidence that the terms and practices applying to your workers and employees are all in order - so your business doesn't become the next Pimlico Plumbers!