New National Minimum Rates announced

Effective from April 2018, the Chancellor Philip Hammond confirmed in his Autumn budget, national minimum wage increases and a new scheme affecting care sector employers who may have underpaid their employees.

New National Minimum Wage Rates

In line with the intention for the national minimum wage to increase to £9 per hour from 2020, it will increase from £7.50 to £7.83, representing a 4.4 percent uplift.  In practical terms, this will mean a pay rise of around £600 per year for a full time worker.

The other rates will increase as follows:

  • Workers aged 21-24 from £7.05 to £7.38 per hour
  • Workers aged 18-20 from £5.60 to £5.90 per hour
  • Workers aged 16-17 from £4.05 to £4.20 per hour
  • Apprentice rate from £3.50 to £3.70 per hour

The Budget was also used to announce a review of the flexibility in the way organisations may use their apprenticeship levy (large companies have been required to pay this levy since April 2017 which they can then use to fund apprenticeships) and a National Retraining Scheme to support worker’s career development.

Care employers advised to correct minimum wage wage under payments

A new scheme to encourage companies in the care sector to make good any minimum wage underpayments was launched on 1st November 2017.

Recent employment tribunal judgements have shifted a focus onto a companies minimum wage obligations in the specific area of sleep-in shifts.  HMRC’s interpretation of the legislation, in common circumstances, requires that all hours of a sleep-in shift attract the minimum wage, regardless of whether the worker is asleep.

In order to soften the impact of these decisions on social care companies, the Social Care Compliance Scheme (SCCS) will see any underpayments corrected but remove the enforcement measures applied to companies that are found to have underpaid their workers. Employers have until the end of 2018 to join up to the scheme.

Committees publish draft bill on gig economy workers

A joint draft bill containing enhanced proctections for gig economy workers has been published by two government committees.

The propsal focuses on giving individuals more certainty about their status by providing an automatic assumption of “worker” status, meaning that it would be for the company to prove otherwise at employment tribunal.  This would also mean that these workers would be entitled to certain employment rights from day one.

Some recommendations from the Taylor Report are also included in the Bill, such as considerations of a higher national minimum wage rate for those on zero hour contracts. The government is yet to provide its full response to the review and this Bill will add more pressure on the government to take action.

If you need any help or guidance on the above, get in touch with HR Revolution.

Give us a call +44 203 538 5311 or email: hello@hrrevolution.co.uk or visit www.hrrevolution.co.uk  where our expert CIPD HR professionals are waiting to help you with any questions you may have.

HR Revolution; supporting you, your employees AND your business.

A version of this article first appeared on CIPD HR-inform.

Landmark employment law cases: Uber/Deliveroo – The decision on drivers and riders rights; what could this mean for your business?

This has been a very hot topic recently and we have been overloaded with articles about what the “workers” versus “self-employed” issues/rights means, so now the ruling has been made HR Revolution discuss what this means for businesses going forward.

The Employment Appeals Tribunal ruled on Friday that Uber’s drivers qualify as workers, giving drivers rights such as the minimum wage and holiday pay, resulting in potentially damaging the way the company operates.  Currently the average hourly rate minus fees, petrol and expenses may mean an Uber driver is not earning the minimum wage.

Although Uber argued that their drivers have the freedom to choose when and where they work, the EAT ruled that drivers were effectively working for Uber while the app was switched on, and were not able to make themselves available to other operators as Uber had claimed.  In addition, the way Uber limits driver contact with customers, the language it uses when recruiting drivers and the way it treats those drivers who refuse a fare, resulted in the EAT concluding that Uber exerts control over the drivers, meaning they are to be deemed as workers as opposed to being self-employed and are therefore entitled to worker rights.

http://www.telegraph.co.uk/technology/2017/11/10/uber-loses-key-appeal-drivers-rights/

Conversely in the case brought by the Independent Workers Union of Great Britain, Deliveroo riders have been ruled “self-employed” by the labour law body the Central Arbitration Committee (CAC).  This further highlights the complexity of determining the employment status and why it is imperative care is taken when considering whether the individual has worker rights including holiday pay and minimum wage.

The key to this case was that in the contract between Deliveroo and the riders; riders had the freedom to substitute the services to a “mate” both before and after they had accepted a particular job if they wished – allowing other riders to take their place on a job. The CAC found that the right to substitution was genuine in day to day practice and therefore found the riders be self-employed. To further support Deliveroo’s case, the new terms also stated that riders did not have to wear branded clothing.

Both of these decisions have been based on whether there is “control” from the employer to the employee and in the case of Deliveroo the lack of control meant the balance was tipped as the riders having self-employed status.

Riders enjoy being their own boss – having the freedom to choose when and where they work, and riding with other delivery companies at the same time.  In practical terms, this implies they are genuinely self-employed.

http://www.bbc.co.uk/news/business-41983343

What could these rulings mean for your business?

Both of these rulings although contradictory, have significant implications for the gig economy in particular.  It also clearly demonstrates that there is still a lot of ambiguity and confusion around employment status, which is expected to be given clarity by the government by the end of the year.

The outcomes of both these cases emphasises the importance of ensuring you are giving those entitled to employment rights, just that and also ensuring any contractors are complying with any IR35 rules.  It means care and consideration should be exercised by both the employer and employee when entering into an independent contractor agreement on a self-employed basis.

Any business should take guidance from both of these cases as they demonstrate how important it is that your employee status is. Make sure the use of self-employed contractors are being used correctly within your business and not just as a label to get around the rules.  With the number of self-employed contractors increasing significantly, both of these rulings are likely to be significant for employment law in the UK.

The lesson from both of these cases lies around the control identified in the terms and conditions of an independent contractor agreement.  Although this doesn’t set a new precedent as all cases will be judged on their own merits, the control you exert over anyone self-employed within your business should be carefully considered to avoid any similar claims.

Deciding on the appropriate employment status can be difficult for many companies. If you have concerns regarding this, HR Revolution are here to help, get in touch with one of our consultants who can offer you a free consultation to ensure that you are compliant.

Give HR Revolution a call +44 203 538 5311 or email: hello@hrrevolution.co.uk or visit www.hrrevolution.co.uk  where our expert CIPD HR professionals are waiting to help you with any questions you may have.

HR Revolution; supporting you, your employees AND your business.

 

 

Hung parliament – what does it mean for HR and employment law?

We have a new government of sorts, after all the campaigning, the Conservative party didn’t get enough votes to form a majority government meaning they will be forming a minority government in alliance with the Democratic Unionist Party.

The main priority for the Government will be Brexit negotiations but the following points will be good to keep an eye out for:

  • There will be lots of attention to those working the in the “gig economy” and the introduction of legislation to make clear their worker/employed status.
  • There could be limited changes to National Insurance payments – they could rise but this has not be stated clearly yet.
  • It is likely there will be an increase in the personal tax allowance to £12.5k and £50k for higher tax payers.

Things for businesses to look out for

Brexit negotiations around the rights to work, both for UK and EU nationals and EU workers currently in the UK, should be kept under careful review for any developments.

With increased attention on the “gig economy”, it may result in the re-assessment of contracts between businesses and self-employed workers and will also require greater analysis of the status of an employee, worker or contractor.

If you need any HR advice give us a call, we are here to help +203 538 5311 or email: info@hrrevolution.co.uk

HR Revolution – www.hrrevolution.co.uk

 

The Gig economy, a tribunal waiting to happen?

Over the past few weeks, you might have noticed that the ‘gig economy’ is something that’s being discussed more and more in the media. Essentially, it’s an employment market that’s categorised by lots of short-term contracts and freelance work, rather than permanent roles.

Some might say that it’s a win-win for employers and workers alike… People get to enjoy the flexibility of having less constraints placed on their time, they are free to decide the finer details of how the work is carried out, and they also have an element of ‘pick and choose’ when it comes to finding projects that they want to work on.

Of course, the benefits for employers are obvious, too, but are some businesses taking the market conditions a bit too far, and using them to exploit their workers?   It’s an issue that’s still something of a grey area in legal terms, though there’s been an very recent attempt to shed more light on the subject, in a case brought to the Court of Appeal.

Back in February, Pimlico Plumbers, a London-based company, lost its appeal against a previous ruling that decided that a long-term worker was in fact an employee rather than a contractor, and should therefore enjoy rights such as basic holiday pay.

Other companies such as Uber and Deliveroo have also come under scrutiny, and it’s a safe assumption that discussions won’t end here. As we move into an economy with more flexibility and the traditional role of employment changes, business all across the UK will no doubt be planning their next moves.

Of course, most employers simply want to do their best by their workforce, and they aren’t actively looking for loopholes to exploit. However rulings in recent tribunals have suggested that current legislation will stamp down on unscrupulous employers who aren’t stepping up to their responsibilities.

If you regularly rely on contractors to run your business and you enjoy the flexibility that it gives you, then just hoping for the best and acting with good intentions probably isn’t going to cut it.

Don’t risk costly tribunal procedures down the line, let HR Revolution help, get in touch to have an informal discussion about your rights and responsibilities, we look forward to taking your call +203 5311 5388 or email: info@hrrevolution.co.uk

HR Revolution – www.hrrevolution.co.uk

The rise of the ‘gig economy’

For those of you who are not aware, a new phenomenon is upon us known as the ‘gig economy’. A new trend in which temporary or self-employed positions are common and companies contract independent workers for short-term engagements and casual employment, think along the lines of new companies such as Deliveroo and Uber.

Recently the Guardian newspaper conducted an investigation into working conditions at the employer Sports Direct and as a direct result MPs launched an inquiry into pay and working conditions in the UK.

They produced a pretty damning report on them, stating that working for Sports Direct was akin to working in a Victorian workhouse.  They exposed poor working practices, agency workers being paid less than the minimum wage and exploited through suspect voluntary schemes, such as pre-paid debit cards and deductions from pay for insurance services.

This trend raises questions over employment status and lack of worker rights.  The fact being that these self-employed contractors are not entitled to earn the “national living wage” or receive benefits such as sickness or holiday pay.

However on 28th October, there was a ground breaking UK employment court tribunal decision against Uber; read the full article in The Guardian,  where the court ruled that Uber drivers are not self-employed and should be paid the “national living wage”, a landmark case that could affect tens of thousands of workers.

So in turn this will obviously effect many employers as well, so if you have any queries or concerns about workers rights contact us at HR Revolution where we will be happy to assist.

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