Employment Law Roundup

Employment law is always being updated and changed, and the last year is no exception, so there is the opportunity to review existing practices. We have also added some thoughts about exit planning and highlight the leadership and management grant, which is again available to companies in the SME sector.

Jane Domhill

This article is provided by The Human Resource Centre, a team of highly experienced HR consultants based in the Thames Valley
For further information please contact Jane Domhill or visit www.thehrc.co.uk

Retirement Age
Effective April 2011, there is no statutory retirement age, which means that clauses in contracts or handbooks are now unlawful. Beyond the cosmetic change, there are implications for employers faced with employees approaching retirement age assuming either party wants to continue the employment relationship.

Managing performance will be a key part but will be discriminatory if only applied to older workers. If you employ people through agency agreements, the financial implications of recruiting older workers can be substantial (in terms of having to pay on-going commissions after ‘retirement’) so agency agreements should be checked to reduce this risk.

If you want to talk through how to manage an older worker or how to introduce and ensure your performance management is not discriminatory, please click here

Agency Workers
From 1st October 2011, temporary agency workers have increased rights to bring this
category of worker into line with their full time equivalents.

In practical terms, during their first 12 weeks of employment they are now entitled to equal access to any canteen facilities, existing childcare arrangements, company provided transport facilities and any vacancies which may arise whilst working for
you.

The new regulations do not apply to workers you use through any outsourcing arrangement or consultants employed through personal service companies.
After 12 weeks in a placement, agency workers are then entitled to ‘equal treatment’ in terms of holiday and salary (including overtime and any bonus which is directly related to the individual such as sales commission or piece work) as an internal person assuming the role is the same.

Leadership and Management Grant
This match funded training grant (of up to £1,000) is again available although the criteria have been tightened up reflecting budget cuts but also a focus by the government on higher growth, to support employment generating companies. Higher growth means those businesses which have the potential to increase turnover, or employment, by 20% each year for 3 years, with a business plan to support this.

New businesses with potential to reach £0.5m turnover within 3 years are also
eligible. Within the London boroughs, we have been using this grant to work with MDs and Directors in developing their strategy, work out development plans for key staff to enable the MD to exit, and prepare a growth plan for a MD looking to expand his business through external funding.

It can also be used with more junior employees to subsidise training events in company.

Social Networking
In marketing terms this has become a new channel to market in particular in the B2C
market. Employers have expressed concerns about being able to manage their brand when employees might say things out there that they later regret. It is very similar to the impact that emails had when they became the way of doing business.

So it is worth checking your IT, bullying and harassment, and disciplinary policies to make sure any abuse using social media is covered.

Bribery Act
At the third attempt, this became law on 1st July 2011 and may affect the way you do
business with customers and clients. Corporate hospitality is still acceptable as long
as it is proportionate. Essentially the law now makes Directors liable to unlimited fines and/or custodial sentences (up to 10 years) if either they or their employees are found giving, offering or accepting bribes in the normal course of business.

The first case has already been through the courts where a public official took a kickback at work to waive a traffic penalty. This incident seems pretty straightforward and clear cut.

In our experience, this is not likely to significantly affect our clients yet, again, it may
be worth reviewing your policies and procedures regarding expenses, giving and
receiving gifts and where you use agents ensure they also comply with your policies.

Exit Planning
We came across a statistic recently, which said that only 8% of businesses sold met or
exceeded the owner’s aspirations. Part of the reason for this was because potential buyers were not convinced the staff would stay, or that much of the value lay in the
MD and his or her management team and there were no guarantees that they were
locked in.

Talking to experts in the field they say that exit planning should start 3-5 years before the proposed date of sale to allow time to recruit and embed any gaps that are missing in the management structure, lock in key employees in some sort of efficient share scheme or bonus arrangement, and coach them to take on new responsibilities as well as allowing sufficient time to manage out underperformers.

The MD also needs time to think about his/her own position – whether they want to make a clean break, or whether part of the value of the business is the MD and so coming to terms with what golden handcuffs are required over what period.

Whether the long-term economic prognosis is such that MD’s are bringing their retirement plans forward or it is just an indication that we are all getting older, we suggest that there is no time like now if you are contemplating
retirement/sale.

Minimum Wage
From 1st October 2011, the national minimum wage increases to £6.08 per hour. The
apprentice rate rises to £2.60 per hour. There has been much talk in the press about the use of interns and whether they are getting work experience or doing a real job and therefore whether an intern should be paid.

STOP PRESS
The government is planning to introduce fees for bringing tribunal claims possibly £250 when lodging an ET1 form (to be refunded if the claimant wins) and is considering increasing the unfair dismissal qualifying period from one to two years continuous service.

About the Author: Jane Domhill  is a certified Coach, Master Mentor, and qualified in the use of psychometric assessment and testing materials and tools for use in team building, recruitment and understanding working styles and behaviours.

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About cyberbore

I work with companies to help them define their strategic growth and then assemble the resources to roll out that plan - funding, non-exec guidance and short-term specialists.
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