July 6

Employers should start preparing for the new pensions regime.


From October 2012 a new pensions regime will start to be phased in which will eventually, by 2017, require all employers in the UK to automatically enrol eligible staff into some sort of pension scheme and importantly, for the first time, to pay minimum contributions.
Employers will have to automatically enrol eligible staff in either the Government’s scheme – The National Employment Savings Trust (‘NEST’) – or an alternative scheme which meets the qualifying conditions as laid down in the legislation; this could be an existing occupational or personal pension scheme. Eligible staff will be able to opt out if they wish but employers will have a duty to re-enrol individuals who have opted out every three years.
The aim of the legislation is to encourage those who have not traditionally contributed to a pension to build up provision for their old age. It is therefore expected that many more staff than at present will become members of pension schemes and this will involve a significant increase in administration and record keeping for employers.
Experts are warning that it will take at least a year of planning ahead of the staging date to implement a suitable scheme and so employers need to start preparing sooner rather than later with the key steps being:
• To check the organisation’s staging date
• To assess your workforce
• To choose a compliant pension scheme or review your existing pension scheme
• To communicate the changes to all your workforce
• To automatically enrol your ‘eligible jobholders’
• To register with The Pensions Regulator and keep records
Every employer, no matter how small, will have to implement a staff scheme or face the threat of fines and even prison. The potential financial sanctions for failure make non-compliance a distinctly unattractive option.
There are also considerable advantages to firms, in terms of staff retention and motivation, from providing a good pension scheme. Pensions are a valued employee benefit and organisations should factor in the retention, recruitment and motivational benefits of their firm’s bottom line when deciding not only in which scheme to enrol staff, but also what level of contribution they will be making to their employees’ funds.
A key benefit to employers of not waiting until the last minute to set up their pension scheme is the forecast impact on the bottom line. At the staging date, all of a sudden an organisation is going to have to put in 3% of its salary bill as a contribution into a pension. However, if you start in advance of your staging date you will be able to take that cash flow hit more gradually and, in addition, you will be able to offset the contributions against pay rises that you may want to give to your employees. What you can’t do is wait until your staging date and then give all your employees a 3% wage cut in order to put the money into the pension fund – it is illegal to do that under the new legislation.

There are definite financial advantages for firms in not leaving auto-enrolment to the last minute. Offering a decent pension is proven to be a sound business move, and there is an abundance of suppliers and advisers out there ready, willing and able to help you through the process.

June 6

Boost productivity by adopting flexible and home working.


With the Olympics nearly upon us the merits, and otherwise, of ‘home working’ have been discussed in businesses both in London and where regionalised events are taking place. However, leaving the Olympics aside, employers are increasingly adopting flexible and home working practices as a corporate strategy because it makes good financial sense.
Although remote workers are thought to complicate a manager’s job, a highly distributed workplace has too many potential advantages to dismiss.
O2 conducted a pilot during February this year, in which staff who would normally work in an office were compelled to work from home. This helped employers to see very clearly the cost savings available with a policy of home working:
Of the 3,000 workers subjected to the pilot, just 125 ‘mission critical’ people worked from their desks as normal. The remaining staff saved a collective £9,000 in reduced commuting costs, while 14 percent said they saw more of their families and 36 percent said they were more productive than when at work. An additional 12,000 hours, time otherwise spent commuting, was spent working. Workers said they spent a further 1,000 extra hours sleeping and otherwise relaxing.
The top five reasons why employers can benefit from home working are:
Better staff recruitment and retention – Home working can widen the recruitment pool by attracting people who have traditionally struggled to find work, such as single parents, those with disabilities and those workers who are geographically isolated. In addition, lifestyle concerns can easily trump salaries in a top worker’s decision process.
Improved motivation and productivity – Employees are more likely to have a high morale where employers are seen to take account of their needs. Employees who enjoy flexible working are better at meeting tight deadlines, will put in the extra mile when the business needs it and take time off when more convenient, improving personal productivity.
Improving the quality and reputation of the service – Good employment practices can enhance the reputation of a business. Home working and flexible working can extend the hours when businesses are in touch with customers.
Reduction of sickness absence and travel costs – Not working in an office environment can reduce exposure to colds, flu and other contagious diseases. Cutting out the commute can reduce stress. Motivated staff are less likely to take sick leave, another way in which the business may benefit from increasing productivity.
Infrastructure cost savings – Home working can save on car parking space, office rent and running costs. Businesses save millions each year through flexible and home working, whilst Suffolk County Council is an example of an organisation that was able to cut the size of its new central services office block by one third by using these practices.
In today’s world, true competitive advantage in business is being able to anticipate change, react quickly and be there 24/7. With flexible working in place you can do just that, creating a new way of working that takes into account business productivity factors as well as improving quality of life for your employees and yourself.

Considering the aforementioned benefits, it would be wise for employers to think about incorporating a work from home policy, or expanding their current policy. In the past, home working has sometimes been considered a risk for employers. However, as technology advances and business norms change, it could soon be more of a risk not to incorporate home working into talent management.

June 1

Boost productivity by adopting flexible and home working.


With the Olympics nearly upon us the merits, and otherwise, of ‘home working’ have been discussed in businesses both in London and where regionalised events are taking place. However, leaving the Olympics aside, employers are increasingly adopting flexible and home working practices as a corporate strategy because it makes good financial sense.
Although remote workers are thought to complicate a manager’s job, a highly distributed workplace has too many potential advantages to dismiss.
O2 conducted a pilot during February this year, in which staff who would normally work in an office were compelled to work from home. This helped employers to see very clearly the cost savings available with a policy of home working:
Of the 3,000 workers subjected to the pilot, just 125 ‘mission critical’ people worked from their desks as normal. The remaining staff saved a collective £9,000 in reduced commuting costs, while 14 percent said they saw more of their families and 36 percent said they were more productive than when at work. An additional 12,000 hours, time otherwise spent commuting, was spent working. Workers said they spent a further 1,000 extra hours sleeping and otherwise relaxing.
The top five reasons why employers can benefit from home working are:
Better staff recruitment and retention – Home working can widen the recruitment pool by attracting people who have traditionally struggled to find work, such as single parents, those with disabilities and those workers who are geographically isolated. In addition, lifestyle concerns can easily trump salaries in a top worker’s decision process.
Improved motivation and productivity – Employees are more likely to have a high morale where employers are seen to take account of their needs. Employees who enjoy flexible working are better at meeting tight deadlines, will put in the extra mile when the business needs it and take time off when more convenient, improving personal productivity.
Improving the quality and reputation of the service – Good employment practices can enhance the reputation of a business. Home working and flexible working can extend the hours when businesses are in touch with customers.
Reduction of sickness absence and travel costs – Not working in an office environment can reduce exposure to colds, flu and other contagious diseases. Cutting out the commute can reduce stress. Motivated staff are less likely to take sick leave, another way in which the business may benefit from increasing productivity.
Infrastructure cost savings – Home working can save on car parking space, office rent and running costs. Businesses save millions each year through flexible and home working, whilst Suffolk County Council is an example of an organisation that was able to cut the size of its new central services office block by one third by using these practices.
In today’s world, true competitive advantage in business is being able to anticipate change, react quickly and be there 24/7. With flexible working in place you can do just that, creating a new way of working that takes into account business productivity factors as well as improving quality of life for your employees and yourself.

Considering the aforementioned benefits, it would be wise for employers to think about incorporating a work from home policy, or expanding their current policy. In the past, home working has sometimes been considered a risk for employers. However, as technology advances and business norms change, it could soon be more of a risk not to incorporate home working into talent management.

May 16

Landmark ruling on compulsory retirement age.


A landmark ruling by the UK Supreme Court last week has said that employers are entitled to set a compulsory retirement age if they can prove there is a legitimate reason for doing so. This is despite the change in the law last October which stopped employers compulsorily retiring workers at 65. The important distinction with this ruling is that the Court only said it was acceptable to force an employee to retire, not that it was acceptable to force a retirement at 65. It is therefore possible to justify a retirement age, not the retirement age of 65.
The Court set out new guidelines enabling an employer to dismiss on grounds of age, as follows:

  • They must consider a range of alternatives to retirement
  • They must be able to show specific public interest justification in each 
case where retirement is imposed – ie:
  • It will make it easier to recruit younger workers
  • It will enable promotion of middle management
  • It will enable employers to plan their workforce for the future and train others
  • It will enable the careers of older workers to end with ‘dignity’, rather than being dismissed for poor performance
  • They need to show they have considered other options such as flexible working hours or allowing employees to stay on for a short period.

What is important is that employers need to show these aims are legitimate and are being genuinely pursued. For example, improving the recruitment of young people in order to achieve a balanced and diverse workforce is, in principle, a legitimate aim. However, if in fact there is no problem in recruiting the young and the problem is in retaining the older and more experienced workers then it may not be a legitimate aim for the business concerned.
The situation following this ruling ought to be welcomed by employers. The legislation that came in to force in October, preventing compulsory retirement at 65, caused uncertainty as they were worried about asking workers aged 65 or over to leave the business for fear of being accused of ageism. This Court ruling has made the law clearer in that it reinforces the fact that workers cannot be retired just because of ‘stereotypes’ of age, but is very clear about the fact that they can be forced to retire where a business can justify a compulsory retirement age based on legitimate aims, provided they are proportionate.

This Court ruling has not specified what the correct age is to retire somebody – rather, it has sent the clear message that the abolition of the default retirement age of 65 does not mean employees cannot be retired at a given age, it just means it needs to be a more considered decision than previously was the case.

April 1

Allocating paid time off work . . .

With an extra bank holiday in 2012 employers should be planning how to deal with holiday requests.

Last year we had the Royal Wedding. This year we have another extra bank holiday to celebrate the Queen’s Diamond Jubilee on Tuesday 5 June 2012. How should employers deal with this and more general questions surrounding holidays from work?

Are all staff entitled to the day off on 5 June 2012? 
Not necessarily and some employers will have to keep their businesses running on that day. There is no statutory right to paid time off on bank and public holidays, although all workers are entitled to 5.6 weeks’ holiday each year. Employers need to check what the employment contract says. If it says employees are entitled to 25 days’ paid holiday plus all bank and public holidays they will be entitled to take the extra day and be paid for it. If it says 25 days’ holiday plus the usual bank and public holidays then they would not. If they wanted to take the extra day’s holiday they would have to request a day’s holiday in the usual way.

What about part-timers?
 Some employers give paid time off for public holidays to part-timers who would otherwise work on the day the holiday falls. That approach obviously works in favour of those part-timers who work Mondays since most public holidays occur on that day, but disadvantages those who do not. The better option is to give part-timers pro-rata entitlement to holidays and public holidays so those workers are not treated less favourably than full-time staff. So, if full-time staff are entitled to 25 days, plus all public holidays, someone who works 50% of full-time hours will be entitled to 12.5 days plus four of the public holidays (4.5 in 2011 and 2012).

This may mean that employees who work Mondays will not be entitled to be paid for all the public holidays they take off and should be given the option of treating the extra days as unpaid leave or taking it out of their remaining holiday entitlement. Conversely, those who do not work on Mondays may have more pro-rata public holiday entitlement than the number of public holidays which fall on their normal working days and they will have to take those off at other times. Employers should try to be consistent in the way they treat all part-time staff.

Is ‘first come first served’ the best way to deal with holiday requests? 
One of the difficulties with this approach is that it is not always clear whose request came in first. Another problem is that some employees may put in a request so early, as a matter of course, that no one else stands a chance of getting in first. Generally speaking, ‘first come first served’ works well, but it might be better for staff to take turns if there is a particular holiday period that tends to be popular, for example, the school holidays or the days between Christmas and New Year, or around the Easter break.

Are compulsory shutdowns a good alternative?
 Possibly, however, before requiring everyone to take leave, employers should consider whether this creates a particular disadvantage for workers sharing a protected characteristic (such as sex, religion or belief) who may need to take their annual leave at other times, for example, during school holidays or religious festivals. If an employee brought an indirect discrimination claim along these lines, the employer would need to show that the shutdown was justified – in other words a proportionate means of achieving a legitimate aim. If the employer is in a sector which traditionally shuts down over Christmas – for example the construction industry – they may be able to argue that there is an operational need for them to have a shutdown because there is no work to do and that this amounts to a legitimate aim. However, they would need to show they had considered the needs of their workers in assessing whether the shutdown was a proportionate means of achieving that aim. The other point to bear in mind is that if staff were previously free to choose when they took holiday, requiring them to take it at a particular time is likely to amount to a change in their terms of employment. If the employees’ consent cannot be obtained there may be the risk of claims for breach of contract or constructive unfair dismissal.

February 6

2012 . . . a summer of absenteeism?

With the Olympics descending on London this summer, employers should plan ahead to minimise the risks posed by abnormally high demand for holiday, absenteeism and travel disruption around London and the other Olympic venues.

According to a recent survey of 1,200 organisations conducted by BT, the general view of the Games is positive, but the report also found that just under a third of respondents, 29%, had yet to make even the most basic preparations for the Games.

If you have not already done so, now is the time to start preparing your organisation for the Olympics. With 100 days of travel disruption expected in London – from the Queen’s Jubilee Celebrations at the beginning of June to the close of the Paralympic Games in September – employees are likely to face disruption to their journeys to and from work, especially if travelling at peak times. Some organisations are considering altering working hours or introducing temporary flexible working over this period.

The risk of absenteeism is also high, as indicated by a recent survey which found that as many as 1 in 6 employees would consider pulling a ‘sickie’ to watch the Games. Employees should be reminded of the Company’s policy on absenteeism and make it clear what behaviour will be considered acceptable. State clearly that unauthorised absences from work will be investigated as a disciplinary offence.

You are also likely to experience a higher than usual demand for leave over the period of the Games and an effective system will be required to deal with competing requests fairly – whilst still ensuring employers have adequate staffing levels to conduct their business over the Games. Employers may choose to develop a specific holiday policy for the Games with leave authorised subject to business need, by random selection or on a first come first served basis. An employer who is flexible and permits employees to watch key events at work may help to minimise unplanned absences.

You could also consider introducing temporary flexible working measures, such as allowing employees to work through lunch, leave early, modify start and finish times, or allow shift workers to swap shifts. You will, however, need to consider the consequences of offering preferential treatment to Olympic and Paralympic fans compared to other employees who have made unsuccessful flexible working requests in the past.

With many employees having spent considerable sums on tickets, they should be encouraged to submit their holiday requests as early as possible to avoid disappointment. A further 1 million tickets to the Games will be going on sale in April 2012. If you are unable to authorise any further holiday this should be clearly communicated to employees before the ticket ballots open to avoid employees buying tickets they will be unable to use – especially as they are non-transferable!

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