With Christmas and the New Year now almost a distant memory and work life back in full flow, this month’s newsletter is full of useful business ? and HR hints and tips to make 2016 your best year yet. How will you know if it’s your best year? Well, you need to set targets, have plans to achieve those targets and measure your success against those targets. Easy enough to say, but just like New Year resolutions, the best intentions are often in the waste paper basket by the end of January (if not sooner).
This month (and year), we are going to help you to focus on your business, your people and your success. As anyone who has heard me speak at conferences will know, balancing the needs of your customer and their businesses with the needs of your business, your staff and your own desires is like walking a tight-rope: two steps forward, wobble, a slight step backwards, get your balance …. And then begin the process again! It takes practice, slow patient steps, feedback, adjustment and balance all in just the right proportions. Running a business is not something which people are instantly good at and making sure you have the right knowledge and feedback, in a timely manner is just as important as goal setting, decision making and leadership if you are going to have a truly successful business.
As always, we would love to hear from you. If there is anything you would like us to do more off, less of or differently …… just let us know.
I want my employee out but don’t want to follow any lengthy procedures or offer any money for my employee to leave. When can a Settlement Agreement be used and will the company then walk away scot free?
The use of Settlement Agreements can be massively advantageous, not just for employers but for employees too, if used correctly. Settlement Agreements are essentially a formal, legally binding agreement made between an employer and employee (or ex-employee) in which the employee agrees not to pursue particular claims that they believe they have, in return for a financial payment.
If an employee has more than two years’ service, there is always the risk that a claim could be brought especially if the company have failed to follow the correct procedures in terminating the employment. Even if the employee has less than two years’ service there are a number of other claims an employee could bring if applicable, for example, discrimination or breach of contract.
Issuing a Settlement Agreement is often an effective way of ending the employment relationship and has many advantages, especially:
- If there has been a disagreement/relationship breakdown between employee and employer
- Cost of preparing a tribunal response outweighs the cost of a Settlement Agreement
- Avoids risk of reputational damage/bad publicity
- Employment Tribunal claims that have a strong chance of succeeding
- The company may have been at fault in its treatment towards an employee
- Redundancy situations
- Employee grievances with colleagues
- Underperformance, disciplinary or misconduct issues
- Sickness absence
The Settlement Agreement usually contains a number of important clauses whereby:
- Both parties agree to keep the details of the Agreement confidential and not to make detrimental statements about one another.
- The employee agrees to return company property, including any documents or computer hardware and software.
- The employee agrees to resign as director or company secretary and transfer any shares it may hold.
- The employee may want provision of an agreed reference from the employer.
- What amounts the employee will receive on termination including any notice pay, holiday pay, wages and any non-contractual (ex gratia) sums paid as compensation for loss of employment under the terms of the Agreement.
- The employer agrees to contribute towards the employee’s legal costs. In most cases, this could be a sum in the region of £200 to £400.
- A tax indemnity from the employee.
- Confirmation that the employee has not knowingly committed any breach of their employment contract or breach of duty owed to the employer.
In order for a Settlement Agreement to be legally binding, a number of important conditions must all be fulfilled, such as:
- The agreement must be in writing.
- It must relate to the particular complaints.
- The employee must have received independent legal advice as to the terms and effect of the proposed Agreement and there must be relevant insurances in place.
- Both the employee and their advisor must sign the Agreement.
Only once the Agreement has been signed by both parties will it become a legally binding document.
Settlement agreements are complex legal documents and it is not possible to adopt a ‘one size fits all’ approach to drafting them. They must be specifically drafted and tailored according to the facts and circumstances of each particular case.
There can hardly be a less stressful job in the glare of publicity than that of a football manager!! Barely a week goes by without pundits and fans clamouring for the replacement of the manager – often by someone who is only available because he has recently been relieved elsewhere. Just ask Louis Van Gaal! As Business Owners can we learn something from their ability to rebound from tough times – even to be stronger than before?
We are all hit by challenges – but it is how we meet them that makes a difference. In my experience, it is possible to develop an emotional toughness to overcome the inevitable “bumps” in the road. I would like to share some crucial tips which have proved to help Business Owners overcome a significant setback such as the loss of a major contract or even liquidation.
- Set a successful outcome – frame a clear sense of direction of what you really want making sure it is stretching but not an impossible dream. We all know that committing on paper a set of goals has a magical effect of achieving what we set out.
- Take control of the situation by seeing the situation in perspective – Seldom do I find footballers say anything profound – but I like Carlo Ancelloti’s self-awareness when he stated “Football is the most important of the LEAST important things in life.” It is vital that we place the business obstacle in context of our overall life. Our health or the health of loved ones, is of more importance than the loss of a customer. We can rebuild the company fortunes if we are optimistic – but dealing with health issues are much more difficult.
- Manage your anxiety to channel this to make better decisions – it is natural that as the Owner of your business you have developed self-doubts through the setback, so take measures to boost your self-esteem. Do not focus on beating yourself up – look to your support group to help reinforce your strengths and stimulate confidence in your own abilities. Above all, reframe your attitude to business opportunities to that of “pragmatic optimism” to evaluate the risk and TAKE a decision. We all know people who prevaricate to the point that events make their decisions – not them!
- Improve yourself – evaluating some of the possible causes of the setback, commit to continuous education by reading or joining webinars or attending a seminar. It is important to incorporate that learning in everyday business life – or you will have wasted the time and money!
However, above all be authentic to your true character. I have met people who have consumed the “Dale Carnegie” lessons assiduously – but it comes through that this is not their natural persona!
I also encourage business owners to develop their physical side as well as their emotional dimension. We all know how endorphins can boost your behaviour – so any form of activity will be useful to boosting resilience.
2016 promises to be every bit as volatile as 2015 – we all need to know how to bounce back from seemingly 10 foot high hurdles. I hope employing some of my tips will allow you to scale them with confidence!!!!
Quotes of the Month
This month, seeing as we are in the month of January, I have based the quotes of the month around goal setting. A lot of people set goals and make resolutions for the New Year. So read these quotes for inspiration and encouragement to keep up the good work!
- “Setting goals is the first step in turning the invisible into the visible.” – Tony Robbins
- “Make each day count by setting specific goals to succeed, then putting forth every effort to exceed your own expectations.” – Les Brown
- “Put 100 percent into what you’re doing. Set goals for yourself, know where you want to be and take small steps toward those goals.” – Kristi Yamaguchi
A number of employment law changes are on their way this year. Here are a few things to look out for:
Zero Hours Contracts: Changes to the law in 2015 made exclusivity clauses in zero hours contracts unenforceable. New regulations come into force on 11th January 2016 to provide some remedies for zero hours workers. The Regulations give zero hours workers the right not to be unfairly dismissed (with no requirement for any qualifying period), and the right not to be subjected to a detriment for failing to comply with an exclusivity clause by working elsewhere.
National Living Wage: The National Living Wage will be introduced for workers aged 25 and over on 6th April 2016. A 50p premium will be added to the current minimum wage rate, setting the first National Living Wage at £7.20. Statutory Payments: The Government has said that there will be no increases to statutory rates this year. Statutory Maternity, Paternity, Adoption or Shared Parental Pay, Maternity Allowance and Statutory Sick Pay all remain unchanged for the 2016 / 2017 tax year and will remain at £139.58 or 90% of the employee’s average weekly earnings if this figure is less than the statutory rate for family related rates and £88.45 for sickness. Changes usually come into force in April.
National Minimum Wage increases will take place as usual on 1st October, but the new rates have not yet been announced.
Date to be Confirmed
Public Sector Exit Payments: Changes to public sector exit payments are expected this year. It is envisioned that a cap of £95,000 will be imposed on the pre-tax value of exit payments made to most public sector workers. In addition, it is expected that claw back provisions will be introduced, requiring employees who leave the public sector to repay some or all of their exit payments if they return to the public sector within 12 months of their departure.
Gender Pay Gap Reporting: The introduction of regulations that will require public and private sector employers with 250 or more employees to publish information showing differences in the pay (and bonuses) of male and female employees are expected sometime in the early part of this year. The aim is to increase transparency and to reduce the gender pay gap.
Case law to watch
A number of important court decisions are also expected this year. These will come from both the UK and European courts and may result in necessary changes to your policies and procedures. If you are a retained client, we will be in touch if changes are required. If you are an ad hoc client and would like us to make changes to your contract of employment or handbook, just get in touch.
- Holiday pay – The ongoing issue as to whether commission should be included in holiday pay – Locke vs British Gas –
- Religious and racial discrimination –
- The wearing of an Islamic headscarf and whether there is a genuine occupational requirement not to wear it – Bougnaoui vs Micropole Univers SA and Achbita vs G4S Secure Solutions NV
- A Core Skills Assessment test discriminated against older BME candidates – The Home Office vs Essop,
- TUPE service provision changes – The treatment of an employee on permanent long term absence – BT Managed Services vs Edwards
- Collective Redundancy Consultation – How to define the term ‘in good time’ when commencing consultations – USA vs Nolan
- Whistleblowing – The interpretation of when an employee reasonably believes a disclosure is being made in the “public interest” – Chesterton Global vs Nurmohamed
- Tribunal Fees – The challenge to the introduction of tribunal fees on grounds of indirect discrimination – Unison vs Lord Chancellor
As businesses evolve, changes take place and this month we have lost Lorraine Petken from our team. Lorraine had been with us for 16 months and we wish her all the best for the future. On a short term basis, Brenda is increasing her days so she will now be working Monday, Tuesday, Thursday and Friday 9am – 5pm. If you are affected by this change, we will have been in contact with you directly to let you know who your new primary advisor is. As always, if your primary HR advisor is not available, another member of the team will be able to assist and they will bring your advisor up to speed as soon as possible.
What HR term can be found in the anagram – Teenager Melts Me Tent
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Answers to last month’s Time Out!
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