Employers must gear up for April living wage deadline

The National Living Wage has been catching headlines since Chancellor George Osborne announced it last summer, but the Government’s target of £9 per hour by 2020 has overshadowed the detail, and many businesses remain unaware of the transitional deadlines and new penalties now in place. 

The compulsory National Living Wage (NLW) arrives on 1 April 2016 for eligible workers aged 25 and over, and it’s been set at £7.20 per hour.   But the NLW does not replace the current National Minimum Wage, it sits alongside and is a new premium tier solely for those aged over 25.  For everyone under the age of 25, the National Minimum Wage continues to apply.

The new NLW is different also from the ‘Living Wage’, which is an hourly rate of pay calculated to cover the basic cost of living in the UK.  It’s assessed by the independent action group Living Wage Foundation and most recently has been calculated at £8.25 per hour, or £9.40 per hour in London.

When the NLW arrives on 1^st April 2016 all eligible employees – whether permanent workers, agency workers, casual labourers or agricultural workers – who are aged 25 or over must be paid at £7.20 per hour, a pay rise of 50p per hour, whilst other workers will continue to be entitled to the following rates:    

·         21-25 years old - £6.70 per hour

·         18-20 years old – £5.30 per hour

·         Under 18 years old – £3.87 per hour

·         Apprentices – £3.30 per hour

Said employment law expert Elissa Thursfield of Gamlins Law:  “Implementing the National Living Wage for eligible over 25’s is not something that should be ignored or delayed, as there are stiff penalties in place.   Employers can be fined 200% of the amount owed if arrears are not paid within 14 days and receive fines of up to £20,000 per worker.”

She added:  “It’s important to avoid any age-related practices that set out to reduce the number of employees eligible for the higher rate.  Any dismissals of older employees, even with less than two years service, could see employers facing an employment tribunal for unfair dismissal and age discrimination.  It’s the same for recruitment, employers must avoid demonstrating any preferences for younger workers.”

The National Living Wage is expected to increase each year, with recommendations for future rises being made by the Low Pay Commission, as the Government continues its objective towards ‘higher pay and higher productivity’ in place of ‘low wage, high welfare’.

 

Bosses receive frost alert to manage bad weather risks

Bosses receive frost alert to manage bad weather risks

Employers are on frost alert, following the news that a home care worker has won her claim for damages after slipping on ice and breaking her wrist when visiting a client.

The ruling by the Supreme Court means that employers who expect staff to work outside in icy conditions will have to review risk management processes and consider whether they need to provide special equipment.

Tracey Kennedy was visiting the house of an elderly client in December 2010 when she fell and injured her wrist, after slipping on a path covered with snow and ice.  At the time she was wearing a pair of flat, ridged sole boots, and later sued her employer for damages for breach of duty, claiming they should have provided her with crampon style attachments to provide the necessary extra grip in the icy conditions.

The Supreme Court said that her employers had not carried out suitable and sufficient risk assessments to meet health and safety at work regulations, despite having received previous reports of similar incidents and knowing there were icy conditions at the time, as the freezing weather had persisted for weeks.

Because the anti-slip attachments were relatively low-cost, easily available and had been used effectively by other employers to reduce risk, the judges ruled that the failure to provide the crampons had caused, or materially contributed, to the accident.

Said Ron Davison, employment expert with Gamlins Law :  “This case has been through a number of appeals, finally arriving in the Supreme Court, and some may think the ruling seems overly paternalistic, but the Supreme Court made a distinction between an ordinary member of the public who could choose whether to go out and what route to use, and an employee who had no choice but to go out in bad weather and walk on untreated footpaths as part of their employment."

He added:  “It’s likely that trade unions will be arguing for provision of shoe attachments for use in icy conditions, if employers want to avoid liability claims where employees are injured after falling in ice or snow. 

“And of course, the bigger picture isn’t just about slipping in bad weather, it’s why employers have to provide life jackets where employees are working on water, or safety harnesses if they’re working at heights.  What’s important is making sure that risk assessments are made regularly, with feedback or new knowledge factored in, and any appropriate protective or safety equipment put in place.“

The case hinged on a breach of Regulation 3 of the Management of Health & Safety at Work Regulations 1999, failure to carry out suitable risk assessments, and Regulations 4 and 10 of the Personal Protective Equipment at Work Regulations 1992, requiring employers to provide suitable equipment to their employees to avoid risks to their health and safety, and ensure the equipment is properly used.

Grandparents right: Update to parental leave?

The Conservative Party conference last October included an announcement the right to shared parental leave (“SPL”) and pay would be extended to working grandparents. The government is expected to consult on the matter early this year.

 

The current SPL  allows mothers, fathers, partners and adoptive parents to share a total of 50 weeks of leave and 37 weeks of statutory pay in the first year of a child’s life. The Government’s proposal will extend this regime to include grandparents.

Since 30 June 2014, all employees with sufficient service have the right to request flexible leave, something previously reserved for parents and certain carers. Grandparents could therefore request flexible working to look after grandchildren. This right is limited and there is no entitlement, there is only a right to request. It is also of limited value where a grandparent assistance may only be required for a few months.

“More than half of mothers rely on grandparents for childcare”

More than half of mothers rely on grandparents for childcare. Almost 2 million grandparents have given up work and or reduced their hours to help cut childcare costs.

According to the Chancellor this new right will be “good for the economy”. Involving extended family in childcare arrangements will enable parents to return to work more quickly (if they want to). And with more people working longer, it will also help more grandparents stay in employment and combine this with childcare, rather than just quitting their job or reducing their hours to help out.

It is likely to be helpful for single parent families, or for those whose partners do not meet the criteria for SPL.

There are however potential problems, SPL is still in the teething stages for employers and introducing a new practice will be a headache for companies. There will also be more admin to get to grips with the extended rights and dealing with more requests.

There is also a question over how valuable the right will actually be in practice and whether parents will want to reduce the amount of leave they take in the first year.

Research has shown that grandparents often help after the mother has returned to work and at the end of maternity leave.

It will be interesting to see what rights if any actually emerge. We will be monitoring the consultation and will update as details emerge.

 

 

 

Courts move towards higher tariffs on Health and Safety breaches

Two high profile health and safety court rulings have caught the headlines this month, but the penalties imposed reflect the expected shift towards higher tariffs and businesses need to sit up and take notice say experts.  

First, fashion retailer Hugo Boss UK Limited was fined £1.2 million with costs of nearly £47,000 following a prosecution relating to a fatal incident at one of the brand’s outlets in June 2013, when a small child died after a free-standing mirror fell on him.

Then, Oscar's Wine Bar in South Yorkshire was fined £100,000 and ordered to pay £40,000 in costs after a barman gave a potentially lethal liquid nitrogen cocktail to a teenage girl, resulting in her having her stomach removed. 

Under the existing 2010 sentencing guidelines, concerns have been expressed around the inexperience and inconsistency of magistrates and judges leading to fines being imposed that are too low relative to the harm caused, culpability and means.   As a result, following recent consultation, it’s expected that the Sentencing Council will soon publish guidelines that take account of these factors.  

Courts would first consider harm and culpability factors so as to categorise the seriousness of the offence.  This would be put together with the financial standing of the company, with organisations banded from micro to large, to produce a predicted compensation figure.

Dafydd Roberts, Regulatory Law expert with Gamlins Law: “These are both tragic cases, for which no amount of compensation could replace the loss of life or health, but the level of fine is much higher than generally seen in the past, and it seems that the courts are acting in the spirit and ethos of the expected new guidelines, even though nothing has been published yet.”

He added:  “Businesses need to sit up and take notice.  No one wants to be responsible for such accidents, and the best way to avoid that is by making sure that health and safety systems are not just in place, but properly managed and regularly reviewed.  Employees need to have safety at the forefront of their daily activities, and be aware of how it helps to protect both fellow workers and customers. 

“If the employee manual and employment contracts aren’t clear, then now is the time to review them.  Having really robust health and safety policies, regularly reviewed and properly carried out in practice, will go a long way towards providing a defence against any criminal liability, and may provide a defence or at least mitigation against a negligence claim.”

 

Health and Safety Dismissals: Knee Jerk Reactions

In Newbound v Thames Water Utilities, the Court of Appeal upheld an ET decision that the dismissal of an employee for gross misconduct, even after a serious breach of health and safety rules (including failure to wear breathing apparatus in a sewer) was unfair.

Employers have traditionally felt relatively safe dismissing an employee on health and safety grounds, particularly as the sanctions for breach of health and safety for employers can be so severe (think high financial penalties and criminal records). Establishing therefore that a decision was reasonable in the circumstances did not cause employers much reason to lose sleep.

In Newbound, the CA attached significance to the evidence that there had been a lack of training in new procedures and that Mr Newbound had been treated differently to another employee who was not dismissed in similar circumstances.

The CA also approved the tribunal’s finding that Mr Newbound had a 34 year record with a clean disciplinary record. It was considered insufficient weight had been attached to this by the employer.

 

Countdown to new consumer laws

Businesses have until 1^st October to get ready for new consumer rights and dispute resolution procedures

 

Consumers have new rights from October, including a 30-day period to claim a full refund on faulty goods and, for the first time, protections on digital content purchases.  They can also challenge unfair or hidden trading terms.  

The Consumer Rights Act 2015 consolidates eight pieces of separate legislation in this area and whilst most of the changes are updates to existing laws, there are some important new areas covered.

For businesses, it means processes and trading terms must be updated to match the new legislation, as well as ensuring staff are fully briefed.  Alongside, there are also new requirements on businesses to prepare for consumer dispute resolution.    

Under the Act:

·         The new law sees the introduction of rules around what happens where services are not provided with reasonable care and skill, or as they were agreed.  In such cases, consumers can now demand that sub-standard services are re-done or receive a price reduction

·         A 30-day time period to return faulty goods and get a full refund – until now, the law has been unclear on how long is a “reasonable” period for goods to be rejected

·         After one failed repair, or after one replacement which has also failed, consumers can demand their money back, in full, during the first six months, rather than having to agree to repeated attempts to get a repair done

·         Any unfair or hidden terms can be challenged by consumers

·         New rights for consumers for a repair or a replacement of faulty digital content such as online film, games, music downloads and e-books.

 

Businesses have until 1^st October to educate staff about the changes the new legislation brings, although some of the rights introduced by the Act came into force earlier in the year.  These covered publication of fee tariffs by letting agents and requirements on ticket resellers. 

 

The aim of the new Act is to reduce disagreement and court action, but where a dispute cannot be resolved directly between the supplier and consumer, the Government is hoping that dispute resolution, which uses techniques such as mediation or arbitration, will provide a quicker and cheaper route than the courts.   From October, traders will have to provide the consumer with a route to Alternative Dispute Resolution through a certified scheme, which could be through their relevant trade body or similar organisation, if they cannot resolve the dispute directly. 

Legal expert Elissa Thursfield of solicitors Gamlins Law in Rhyl said:  “There are a number of changes and any business selling to consumers will need to be prepared.  It’s important that terms and conditions are reviewed and updated as necessary. In future, these must be prominent and transparent, if traders want to avoid finding themselves being assessed for fairness.  So, if you have hugely detailed small print that no one could possibly read, it’s worth seeing whether you can reduce this, or at the very least making sure that there’s nothing hidden in there that the consumer should know about up-front.

“It’s very important that staff are fully briefed on the extent of the new law as there are a number of far-reaching implications.   For example, where a consumer specifies a purpose when buying and is advised by a member of staff, it’s important that the goods or services are going to be suitable for that purpose; otherwise if it fails to deliver, they have a right to claim their money back.” 

She added:  “For suppliers of digital content, it’s important that traders ensure they are complying with the aspects of the new legislation that specifically relate to them.  In the past the law has been unclear in this area, as it failed to keep up with the huge growth and demand for digital products.”

Commercial Update: Hot Dates and Hot Data

Hot dates and hot data

Reports that an extramarital dating site has been hacked recently may have given its customers more than the usual worry that accompanies news of cyber-crime. 

Following on the heels of many other high profile hacking cases, such as Sony in the United States, organisations are being forced to look ever more carefully at their information risk management regime, to make sure they value information as an asset, and assess their processes with the same rigour as legal, regulatory, financial or operational risk. 

In the case of the dating site Ashley Madison, which promotes itself with the strapline ‘Life is short, have an affair’, it’s been reported that more than 2,500 customer records have been released to the public by the hackers, who claim to have stolen the total database of the site, which is said to contain more than 33 million members in 46 countries.  The company has faced a barrage of calls from customers, concerned that their personal details and credit card information have been compromised. 

And whilst the true picture for the internet daters continues to enfold, Ashley Madison’s problems are a reflection of a fast-growing area of crime, as more and more criminals exploit the speed, convenience and anonymity of the internet.  The Metropolitan Police has recently announced it is boosting the size of its team to tackle cyber-crime and the Government has issued guidance for companies, in a bid to stem the range of criminal activities that know no borders, either physical or virtual.

For companies, cyber-criminals may attack the functioning of computer hardware and software, or try to commit financial crimes, such as online fraud or by penetrating online financial services, or go ‘phishing’ for confidential information.  For company directors, the advice is to ensure the topic is at the top of the boardroom agenda.

 As well as having to meet the requirements of the Data Protection Act and the Communications Act in the UK, also up and coming is the draft EU Data Protection Regulation and the proposed EU Cybersecurity Directive.   There are requirements under the Companies Act 2006 also, which place a duty on directors to keep themselves informed on relevant issues.  They may be held to be negligent if they do not take appropriate professional or expert advice to tackle any identified threats.

The key components for business are to undertake a risk analysis, develop a cyber-security programme, set in place the right policies and take appropriate technological measures. 

“Every business must ask itself what value there is in information they hold electronically, for example, it may be intellectual property, customer information or client funds.  Then they need to consider where the risk lies; as well as outside criminals, the risk could come from current or previous employees or competitors,” explained commercial  law expert Glyn Morrice-Evans of Gamlins Law in Rhyl.

“The response to that review should include a clear cyber-security strategy, with policies in place and staff well informed, backed up by a regular review and updating of technological practices.”

IT system reviews would range from how networks are monitored for attack and what firewalls and malware detection software is in place, through to how internal and external users are controlled and how access may be segregated or restricted. 

“It can come down to the most simple things, such as who holds the passwords and making sure staff don’t open spam mail,” added Glyn.  “Thorough education of staff, with regular updates, is essential.  As well as demonstrating that the company takes the matter seriously, staff are often in the front line, and if they are well informed of the risks, and encouraged to take responsibility, they can be more effective gatekeepers.”