This is a massive one for me and one that I spend most of my professional career talking about!!!
The Employment Tribunal has ruled that two drivers are infact ‘workers’ under the definition in the Employment Rights Act 1996 and therefore are afforded protections not available to genuine freelancers.
This case will be appealed by Uber, they can’t afford not to because of the implications for their global business model. Uber have also looked at the use of driverless cars and this may well speed up that development as ‘engaging workers’ is more expensive than ‘using freelancers / contractors’.
We are often asked by our clients what alternatives there are to having someone working as an employee, especially for new or small businesses, the thought of having employees and all the implications of employment law is enough to prevent them growing their business. The use of contractors, freelancers and gig workers has made business growth possible for many business who would just not have taken the risk with employing staff.
As employment law becomes more and more constraining for businesses, business owners seek ‘new and innovative’ ways of working. Until it is tested in the courts and deemed to be illegal, they will take their chances and that is exactly what has happened here.
In short, with our clients we apply the duck test:
If it quacks like a duck, waddles like a duck and looks like a duck, then it is a DUCK, no matter whether you call it a hen, a bird a chicken or a goose!
In this case the courts have decided that Uber has workers who are DUCKS and nothing else.
The implications are as workers:
They are not employees, therefore there are other benefits they are not entitled to, but even the above will cause Uber and other companies to have to rethink their financial models.
Our first response is always “What does your contract say”?
As a general rule, if staff are absent from work and it is not for pre arranged holiday, then as an employer, you are not required to pay for the missed day. If your contract indicates that you will, ‘for reasons beyond their control’ then you must!
In many cases, employers will work with employees to find the most appropriate compromise. Imagine a retail shop – you need to keep trading, so arranging to change the rosters so that people who can get to work do so and those who can’t, cover more shifts to make up the time once the snow has passed.
If you run an office based business, can employees work from home? A little forward planning might mean people taking laptops home when they wouldn’t normally and forwarding desk phones to mobiles, ‘just in case’.
If staff do make it into work and then their child’s school shuts, parents do have the right to unpaid time of to resolve family emergencies and a school closure would be considered to be just such an emergency.
One option that many employers explore is forcing staff to take the day as holiday. It is not possible to force holiday upon people with such short notice, however if an employee suggests it (rather than having the day unpaid) and you as the employer are comfortable with that approach, then there is no reason why the compromise can not be agreed.
So what then happens if the weather deteriorates during the day and you send your staff home, what are your obligations then? Well, if you close the office preventing staff from carrying out their duties, then you are not allowed to make any deduction from salary.
As an ideal, your contracts of employment or employee handbook, should document a policy and procedure relating to snow days.
As an employer, you have a legal obligation to ensure that your employees are working in a healthy and safe environment. Be mindful of field based staff and drivers. Don’t force them to work if it is not safe for them to do so, as you could end up with a corporate manslaughter case on your hands. Issue advice about bad weather driving and ensure they have emergency provisions in their vehicles. Be prepared to cover accommodation costs if your mobile staff get caught away from home stranded by the snow.
The festive season is nearly upon us, the new year is looming, staff are flagging and looking forward to a few days off. If you work in retail – not a chance, prepare for the onslaught – Christmas and the January sales. If you work in an office or a manufacturing environment, you might be in luck. Many offices and factories close for at least the three bank holidays, some even close for the three working days between Christmas and New Year. Us, well we are closing for a few extra days as well.
We all need a break and recharging the batteries is absolutely essential to achieving an engaged workforce who are healthy, motivated and highly focused on delivering a fantastic service to clients. In many companies the annual leave (holiday) year runs in line with the annual calendar and therefore for many, this is the last opportunity to take unused holiday time. Many companies operate a ‘use it or lose it’ policy and as long as they have given employees the opportunity to use the time, the onus is on the employee to ensure they ‘claim’ everything they are entitled to.
It is really important that an annual leave policy is clearly documented: that staff know when they can take their holiday, what their entitlement is, how bank holidays are treated and are aware of any ‘black out periods’ when the business is at it’s busiest and holiday can not be taken.
Rules such as the number of staff allowed to be off at any one time and any priority given to parents required to take leave during the school holidays should be communicated so that expectations are managed appropriately.
Good practice dictates that managers ensure leave is spread throughout the year and that staff know what holiday time they have left. They should be encouraged to have used at least half of their leave before the end of Q3 with the rest of their leave planned, authorised and booked appropriately.
Holiday pay can be confusing for some employees and the complexity may occur with part time or term time only staff. It is essential that the contract of employment provides the formula for calculating holiday pay and / or holiday entitlement. All entitlements for part time staff must be pro rated based on the full time entitlements i.e. if the normal working week is 40 hours and an employee works 20 hours, they are a 0.5 full time equivalent (FTE). Therefore the annual leave entitlement is pro rated and if the full time employee has 30 days holiday including bank holidays, the part time employee has 15 days including the public and bank holidays which fall on their normal working days.
Many of us look forward to a summer holiday and a well-earned break. We’re just about to come into that time of year when employers will start to see the ebb and flow of their workforce as staff start to take their main holiday. It’s important to remember that annual leave is much more than just a benefit; it’s essential for the long term health and well-being of your staff. As an employer, you probably recognise that many of your employees are working long and hard, perhaps a reflection of the current recession and harder times. Therefore it’s important and in fact essential that you ensure your team take their annual leave. A holiday gives a much needed boost to often tired workers. When working long hours over extended periods of time, mistakes are made and accidents can occur. It is often the case that motivation and morale can also be low. By encouraging staff to take time off for perhaps a week’s holiday, preferably two means that those run down batteries can be re-charged! It is generally a common theme that people return with new-found inspiration, refreshed and motivated which in turn really can energise and benefit a business.
The entitlement to paid annual leave is governed by the Working Time Directive Legislation. This provides all full time employees with a minimum of 28 days leave per year, including public and bank holidays. This is then pro-rated for part time employees – and this is where the complication for many starts.
We find that one of the biggest on-going issues for our clients is calculating part time annual leave entitlements. It can be complicated so here we provide you with some easy to understand golden rules to enable you to choose the method most appropriate for your business needs.
Rule 1: You cannot treat part time employees any less favourably than your full time staff. Entitlements can be pro-rated, but the base benefit must be the same.
Rule 2: Work out your full time weekly hours as this is the anchor point. If you have two very different categories of staff such as those at head office and those in retail outlets, you may choose to have different full time hours for each category.
Rule 3: Calculate the FTE (full time equivalent) of each member of staff based on your full time hours for that category. Here’s an example: If your full time hours are 40 and someone works 30 hours, they are a 0.75 FTE if your full time hours are 35 and someone works 30 hours, they are a 0.86 FTE.
Rule 4: Following Rule 3 work out leave entitlement. As both annual leave and public & bank holidays are pro-rated, assuming a full time employee has 28 days, in the first example the employee would have 21 days leave. In the second example the employee would have 24 days. The main thing to note with this first calculation is that the day is a normal length working day for that category i.e. 8 or 7 hours if it is a 5 day working week, Monday to Friday.
Rule 5: Perhaps you are managing annual leave in hours? In some organisations, where staff work a different number of hours on each day, it may be easier to manage annual leave in hours, so that in this example both employees have 168 hours leave (first employee 21 days x 8 hours) and (second employee 24 days x 7 hours). In this case if they take a day off and they would only normally work 6 hours on that day, then it is 6 which is deducted not 7 or 8 for a whole day.
Rule 6: Be clear on the Bank Holidays! Bank holidays notoriously cause a problem. The key is to record every absence whether it is a personal holiday or a public holiday. So if the employee usually works 8 hours on a Monday and Monday is a bank holiday, you deduct 8 hours (or 1 day) from their leave entitlement. If the employee does not usually work on a Monday, there is no change to their leave record.
Rule 7: Sunday working; where an employee works short days on a Sunday, it is important to ensure that they don’t use all their annual leave entitlement to take every Sunday off! Therefore it is essential that your policy is well written restricting this practice so that may mean no more than 6 Sundays per year and that your managers are trained to manage holiday absence efficiently and ensure adequate cover for the business.
Rule 8: Where an organisation has staff who do not work regular weekly hours, managing holiday accurately is much harder. We recommend accruing holiday based on actual hours worked on a weekly basis. The accrual rate is determined by your full time hours and normal leave entitlement. Then for every hour worked, holiday is accrued. If the person works every week (or most weeks) then they need to be able to take their leave. If they are a temporary member of staff or only work periodically, then it may be better to pay them each month for the holiday they have accrued. This should show as a separate line on their pay slip.
Getting holiday right is important, legally, morally and for the sake of the business. We recommend you ensure you have a clear policy which supports your business needs and culture. Understand what you have to do and clarify what you want to do. Communicate it to staff and if in doubt, seek advice. Ensuring staff use their annual leave entitlement is for the long term health of your business as well as for good morale. Oh, and don’t forget to lead by example. You are no good to your business if you are exhausted. On that note, have a good holiday; we’re off to book ours!
For more information, or for help with drafting your annual leave policy, contact us on 01923 504100 or at firstname.lastname@example.org
As I speak to my clients, I pick up on general trends. Sometimes it is based on stuff they have heard in the news, sometimes it is the fear of forthcoming legislation; but recently there is one trend which is repeated by almost all of my clients – pay increases! Staff are asking for them because the cost of living is on the increase, but companies can’t afford to give them as the economic future is so uncertain.
Going back five and even ten years, pay increases were generally given by small companies at about 5% and by large companies at 5 – 10% depending on the industry, company and individual performance. In these instances, the pay increase was above inflation and employees generally felt valued.
Today, with RPI at 5.4% and CPI at 5% these sorts of pay increases, if even possible, are barely covering Cost of Living increases. In many cases employees really do understand the pressure their management is under and would prefer to have a job with a low pay rather than no job at all, should the company go out of business. However, employees still need to be able to live: feed and cloth their families, put their children in childcare to enable them to work and to provide an adequate standard of living. As inflation increases and pay rises are not achievable, employers are having to look to alternative ways of motivating staff, ensuring they feel valued and remain engaged in the company, helping it to achieve its aims and objectives.
So, how are companies doing this? The answers vary based on size, industry and performance, but here are some ideas which can be adopted.
Communication and expectation setting
Talk to your staff. Be open and honest with them. If company performance is good, tell them, if it is bad – tell them. If you have to make changes to their compensation packages, tell them why and tell them when you will review the situation and what changes you need to see to provide a platform for restoration of their package. If there are decisions you are making to save costs, consult with staff – they may have useful insights and ideas. Try to put bad news with good news messages, but don’t lie and don’t ‘spin’ – you will loose their trust.
Good performance does not mean you have to give pay increases. If the performance is due to a one off successful sale or project, providing a one off bonus to show your appreciation is an ideal way to demonstrate how much you value staff. It won’t add to the long term fixed financial commitments of the company, but will enable a set amount of money to be shared among employees.
Access to voluntary benefits is another way of showing staff that you are thinking of them, even in these stretched times. The employer usually pays a small amount per person and this enables the employees to access all sorts of discounts making their existing pay packet go a bit further. Choosing the right benefits programme is important, but it can be a very cost effective way of rewarding staff.
Providing staff with extra time off can be another cost effective way of rewarding them. This may not work for every business and certainly won’t work if you have a workforce who are too busy to take the annual leave they normally have, but for many extra time off goes a long way.
Getting reward right is hard at the best of times. Getting it right in the current economic climate is even harder.
What has your experience been with recent pay reviews? What alternative approaches have you adopted?
With only 494 days until the start of the Olympics, have you started planning to protect your business?
Having the Olympics in London in 2012 has given many businesses an opportunity for growth they would not otherwise have had. However, if your business is based in or around any of the Olympic sites, will you thrive or suffocate as a result of the increase in the number of people in the area?
For restaurants, shops, pubs, hotels and other service sector businesses, the Olympics will be a huge financial boost, but if your business requires your staff to be at work on time, to move around the community as part of their role or to travel into and out of London on a regular basis, contingency and business continuity planning is essential.
Have you started to prepare your business so that you can take full advantage of the Olympics? Here are some questions you may want to consider…..
You need to plan and your business needs to plan. Employers need to develop a policy and communicate it now. People are reserving their tickets and will need to know what their entitlements are.
Employees, if your business isn’t raising the issue, I encourage you to do so.
Please take some time to share your “Olympics at work” stories with us.