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National Living Wage – increase next year

You’ll know by now that each year the government announce increases to the National Minimum Wage and the National Living Wage. Predictions are in for what the new National Living Wage rate will be in 2019 and it’s a significant increase so worth planning for…..

What is the National Living Wage?

This is the rate that employers legally have to pay to their employees over the age of 25. It was first introduced in 2016 at £7.20 and resulted in significant costs to many employers.

Many people are still confused by the other term ‘Real Living Wage’. Just to clarify, this is the figure calculated by the Living Wage Foundation based on the real cost of living in the UK. It causes confusion but the main difference is that there is no legal requirement to pay the ‘Real Living Wage’.

What will the National Living Rate be next year?

The rate is currently £7.83. Phillip Hammond announced in the recent budget that the National Living Rate would be rising to £8.21 next year. This represents a 4.9% rise to the current rate and therefore one that employers need to start planning for.

(For information the real living wage has been announced as a 2.9% increase to £9.00 per hour except for London where it increases by 3.4% to £10.55).

Don’t get caught out

The next rise will take effect in April next year. Remember, employers who are incorrectly paying their staff below the minimum rates can be named and shamed and also fined up to 200% of the underpayment. Most employers caught by this in the past were as a result of simple errors and not deliberate attempts to underpay their staff.

Start planning

You know it’s coming and we recommend that you analyse your workforce now to assess the cost and plan for the increases.

Employment Tribunal Statistics

As people managers, it’s worth a look at these numbers to see what impact the abolishment of Tribunal Fees has had.

Tribunal Statistics April to June 2018

The Ministry of Justice has published statistics and here are the key figures:

  • the number of single claims lodged increased by 165% compared with the same quarter last year;
  • the number of single claims outstanding rose by 130% compared with the same quarter last year. HM Courts & Tribunal Service is in the process of recruiting more employment judges, which will help reduce the backlog in the medium to longer term;
  • disability discrimination cases had the largest average award (£30,700). Religious discrimination claims had the lowest average award (£5,100). The average award for unfair dismissal awards was £15,007.

Tribunal fees were abolished in July 2017 which means that there is no longer a fee to be paid for an individual to bring any type of claim to an Employment Tribunal and this is likely to be a major factor is the sharp increase in claims.

What does this mean for employers?

With the removal of tribunal fees, it is likely as a Company that you may receive more claims from employees/ex-employees than in previous years, as individuals are no longer put off making a claim because they cannot afford the fee. In addition, it could result in an increase in the number of spurious claims made as people can lodge a claim without any evidence to support their case.

Employers need to ensure that they are taking steps to prevent them being taken to tribunal initially. Providing the right documentation, having policies in place and following these procedures correctly will reduce the likelihood of facing a claim.

The reputational damage of ending up in front of an employment tribunal has become greater due to the introduction of decisions being published online. This lets anyone view the decision and the scrutiny of business practices normally carried out by a tribunal. Taking steps to prevent unlawful treatment in the business will reduce the many risks of going before a tribunal.

Employment Tribunal Award Limits Increases

From 6th April 2018, the limits applying to various tribunal awards and other amounts payable under employment legislation increase, including the maximum amount of a week’s pay for the purpose of calculating the basic award for unfair dismissal and a redundancy payment, increases to £508, and the maximum amount of the compensatory award for unfair dismissal, which increases to £83,682.

Family Friendly and SSP Pay Rates Increases

Statutory maternity (SMP), paternity (SPP), adoption (SAP) and shared parental pay (ShPP) will rise from £140.98 to £145.18 a week from April.

Usually the rate increase would be from 1 April, but the statement to Parliament announcing the new figures suggests the date this year may be Monday 9 April 2018.

Statutory sick pay (SSP) is due to rise this month from £89.35 to £92.05.

The lower earnings limit will rise from £113 to £116.

National Minimum Wage / National Living Wage increases

The following rates are effective 1st April 2018:
• The rate for workers aged over 25 years (NLW) will increase from £7.50 to £7.83 per hour
• The rate for workers aged 21 to 24 years will increase from £7.05 to £7.38 per hour
• The development rate for 18 to 20 years olds will increase from £5.60 to £5.90 per hour.
• The rate for 16 to 17 year olds will increase from £4.05 to £4.20 per hour.
• The apprentice rate will increase from £3.50 to £3.70 per hour

7 Quick Tips – Conducting an Effective Appraisal and Setting Objectives

So it’s the beginning of the year and a good time to give some focus to your staff for the year ahead so that everyone is aligned towards achieving your business goals.

Appraisals are a great way to engage your employees which leads to them taking pride in their job and going the extra mile.

But why does the word ‘appraisal’ makes everyone groan?

Managers see it as an additional task to complete with much form filling. The staff themselves often dread the discussion particularly if they’ve had poor experiences of appraisals in the past where it has been purely a paper exercise of no value, or they’ve received criticism that they see as unjust.

So, here’s some advice by way of quick tips that will make conducting appraisals simple and effective for you and your managers.

1. Don’t obsess about having the perfect form – An appraisal is about reviewing objectives and setting new ones for the year ahead, reviewing competence and performance, and discussing training and development needs. So yes it may be useful to have a structured form to record the information, but as long as you write it down then this will suffice. There are many templates available on-line, but be careful not to download one that’s over complicated. Feel free to use our template:

Staff Appraisal Form

2. Do some preparation – it sounds obvious but often gets missed. For each person, you need to be ready to talk about the objectives you’re setting them (see 4. below) and be able to give them feedback on how they’re performing against their previous objectives (see 5. below). If they’ve had a previous review then take time to recap on this before your meeting. Think about talking to other managers or even customers, if appropriate, to get their perspective and feedback.

3. Listen to your employee – although you’ll have already prepared objectives and feedback, remember the appraisal is a 2-way discussion. Be prepared to listen to your employee about any ideas or concerns. Being involved in the objective setting will have a positive impact on your employee’s engagement with them.

4. Set challenging objectives for the year ahead – which align to the overall goals of your business. Think beyond just the day to day tasks of the role. When you set your objectives, ensure they are ‘SMART’:

Specific – state a desired outcome. What the employee need to achieve?
Measurable – how will you and your employee know when the objective has been achieved?
Achievable – is the objective something your employee is capable of achieving but also challenging?
Relevant – does the objective relate to those of your business?
Timebound – when does the objective need to be achieved?

5. Give constructive feedback and lots of praise where it’s due – telling people when they are doing a good job sounds so obvious, but is often overlooked. Yet receiving praise and endorsement that you’re doing well is a powerful motivator. Where you need to let your employee know about concerns with their work, competence or behaviour, make sure you provide specific examples to back up the criticism. This will help your employee understand your concerns and to be more accepting of the issue. Talk about ways that your employee can improve. Remember though, the appraisal meeting should not turn into a disciplinary meeting to address specific issues.

6. Discuss training needs and area for development – Discuss any training and development needs that your employee may need to support with achieving objectives, developing in their current role, or preparing for future roles in your organisation. Remember there are lot of ways to learn, not just attending training courses. Define how the training need will be met and set timescales for it being completed.

7. Write up and ongoing review – End the meeting by summarising the key points and actions agreed. After the meeting, write up your notes from the meeting on a template if you have chosen to use one. Let your employee review the notes and add any comments. And most importantly, agree when you will review the document again. It’s useful to have regular informal catch ups with your employees about their work, but you may want to have a more formal quarterly or 6 monthly review of the appraisal objectives. This will help both you and your employee to monitor whether he/she is on track with achieving the objectives, to agree any necessary changes and to align further support if required.

The Benefits in a Nutshell
• Your employee receives valuable feedback
• Your employee learns what is expected of him/her
• Your employee gains recognition for his/her efforts
• Problems are recognised and addressed
• Your employee can contribute to discussions about his/her training

In a Nutshell: Working Time – What Employers Should Know

Some of our clients have seasonal peaks, particularly through the summer months. So their employees are clear from their contracts of employment about the need to work longer hours through these peak periods. However, employers also need to consider the impact of working long hours on their employees’ home life, and they must also be aware of the Working Time Regulations that sets legal limits on working hours, defines rest breaks and also rights to paid leave.

So in a nutshell, these are the key points from the Regulations:

• The Regulations apply to all workers, and there are special rules for younger workers – see section below.
• There is a limit of an average 48 hours a week on working hours (over a 17 week reference period).
• Individuals may choose to work longer by “opting out” (but should not be under any obligation to). They should sign a written agreement to be kept on file, and can opt back in again by giving notice.
• There should be at least 11 consecutive hours’ rest in any 24-hour period.
• Where the working day is longer than six hours, a 20 minute rest break should be provided. This does not have to be a paid break. Employees should be encouraged to leave their workstation and have a complete rest from working.
• There should be at least one day off per week. This can be averaged over a two week period, so an employee could have less than 24 hours’ rest one week, as long as the average over two weeks is at least 24 hours.
• There is also a limit on the normal working hours of night workers to an average eight hours in any 24-hour period, and an entitlement for night workers to receive regular health assessments.
• There is an entitlement to at least 5.6 weeks’ paid leave per year (pro-rata for part-time employees).

Younger workers’ special rules (under 18)
• There is a limit on their working hours to 8 hours per day and 40 hours per week.
• There should be a rest break of at least 30 minutes where their work lasts more than 4.5 hours.
• There is an entitlement to 2 days off each week.
• Ensure your contracts and policies reflect these entitlements. Contracts should clearly state hours of work, what flexibility and additional hours are required, and whether there is any additional pay or time off in lieu applicable. Holiday entitlement should be clearly outlined and be at least the statutory minimum of 5.6 weeks (28 days), which can be inclusive of public holidays.
• If you decide you need to make changes to your employees’ working hours to accommodate business requirements, use a consultative approach and explain the reasons for needing to change. It is advisable to seek professional HR advice.
• Where your employees work long hours for periods, keep a record of the hours to check they do not exceed the average 48 hours over a 17 week period.
• Employees should not be obligated to sign an opt out, but if they do, keep a copy on file and ensure employees are aware that they can end this agreement by giving notice.
• Encourage your employees to take their breaks, though you don’t have to police this.
• Be mindful of younger workers and their special rules.

Do your employees have to take a break?

Many employees choose not to take a break in their working day, in fact ACAS research shows that less than a third of UK workers take an hour off for lunch.

We’ve all done it, and at the time we pride ourselves on being conscientious, and working through to get the job done, and really where’s the harm?
Well, as employers, there are few things to bear in mind.

There’s obviously a legal perspective which is covered below, but also there is much research showing that taking regular breaks can make people happier, more focussed and more productive, surely this is what we want from our employees?

But down to the legal stance on the matter:

• The Working Time Regulations stipulate that all employees who work for more than six hours in a day are entitled to a rest period of at least 20 minutes. Employees should be encouraged to move away from their work station for this period, and take a complete break from work.
• Different rules apply for young workers under the age of 18, who must take a break of at least 30 minutes if they work for more than 4.5 hours in a day.
• You are not required to pay your employees for this period of rest.
• You are also not required to “police” your employees to ensure they take the break, so you don’t need to be keeping a record of who takes a break and for how long, but your employment policies should make it very clear that your employees are expected to take a break.
And of course, being a good caring employer, and bearing in mind the research noted above on the benefits, why wouldn’t you actively encourage your employees to leave their desk or down their tools and take some time out. Even better, lead by example !