- How are you currently handling HR issues?
- You need to simplify HR management processes and reduce employment risks.
- Do you have documented workplace policies and employee handbook? How often is updated?
- How do we mitigate risks and enhance compliance with employment regulatory requirements?
- What is peace of mind worth knowing that you are 100% compliant with all regulations?
- How do you know that you are in compliance with all labour related laws?
- What would you do if you were faced with a sexual harassment claim?
- A wrongful dismissal?
- A discrimination claim?
- Are your employees protected if they have an accident or a conflict with another employee?
What are forward thinking, employee-focused companies are doing differently?
The naive way of thinking “It will never happen to me” is no longer viable.
There are enough no-win-no-fee lawyers, unions, insurers, paralegals and others to help a disgruntled ex-employee have a go at you.
The Range of options
When a UK business needs help with employment law, they have a range of options:
- Get the HR team to handle it and Put the systems in place to ensure you manage it;
- Get a lawyers on a retainer to mind your back;
- Get the in-house legal team to back-up HR;
- Insure against it with legal expenses insurance;
- Set up a Co-employment relationship and get all the support & advice you need
For HR in addition to handling a series of business critical day-to-day activities, including payroll, benefits, recruitment, orientation and employee engagement, it also requires an in-depth knowledge of employment law, which is constantly evolving to meet the changing needs of the workplace.
Did You Know?
Attempting to manage a series of business critical day-to-day activities while also staying on top of employment law updates and changes – that do nothing to help grow the company- can have serious implications on productivity, with estimates by HR in excess of £5 billion every year.
According to Croner Research, three quarters of CEOs and Managing Directors cite new business development and customer service as the most likely areas to suffer. In addition, over one third of FSB (Federation of Small Businesses) members cited regulatory burden as the biggest barrier to business, only behind cash flow and the economy status.
Staying on top of all legislation likely to affect your business, is essential to avoid any unnecessary fines or problems.
Small businesses should comply with the following employment law statutes:-
· Equal Pay Act 1970
· Health & Safety at Work Act 1974
· Sex Discrimination Act 1975
· Race Relations Act 1976
· Trade Union and Labour Relations (Consolidation) Act 1992
· Sunday Trading Act 1994
· Disability Discrimination Act 1995
· Employment Tribunals Act 1996
· Employment Rights Act 1996
· Public Interest Disclosure Act 1998
· Data Protection Act 1998
· National Minimum Wage Act 1998
· Human Rights Act 1998
· Employment Relations Act 1999
· Employment Act 2002
· EU Working Time Directive 2003
· Employment Relations Act 2004
· Disability Discrimination Act 2005
· Small Business, Enterprise and Employment Act 2015
· Workplace Pension Reform
In addition, there is a substantial amount of regulations containing further provisions which affect the employment relationship.
For instance, consider the special case of disability absence. The Equality Act 2010 is the legislation that deals directly with disability absence issues. The legislation stipulates that:
The UK legislation in some cases is supported by Codes of Practice drawn up by various government agencies, and they are often taken into account by Employment Tribunals when deciding whether an employer has complied with its statutory obligations.
If UK law has failed to properly implement EC Treaty obligations, individuals may rely on the EC Treaty in the UK courts in the areas of equal pay, discrimination and employees’ rights on business transfers.
Did You Know?
ADP research found that 67% of small businesses have no in-house HR/legal support of their own. Without employment law support there is an increased risk of fines and tribunals which can have a significant impact on your business.
FACTS: Business at risk
- 1000’s of misclassifications and miscalculations resulting in back taxes and penalties
Harassment and intimidation cases on the rise:
- Sexual Harassment and Discrimination
- Wage Disputes and Hourly Disputes
- Wrongful Termination and Breach of Contract
- Negligent Promotion and Supervision
- Emotional Distress and Invasion of Privacy
- According to the British Chambers of Commerce, the average cost to employers of defending an employment tribunal claim is around £8,500. It can go in excess of £30,000 – on top of the legal fees, to be paid even in cases where the ex-employee loses their case. Plus account for further loss of productivity, and any collateral damage impact on the reputation of your business and the morale of the rest of employees.
- In general, an average case will take between 6 – 9 months between lodging the ET1 form and determination at a full hearing. This period may be extended if the case is complex or requires a long hearing.
- After 6 April 2016, the maximum weekly wage that enters into the calculation for redundancy pay and for basic awards and the maximum compensation awarded for unfair dismissals increased to £479.00 per week (ex £475.00).
- The new maximum compensatory award for unfair dismissal rose to £78,962 (ex £78,335 or 52 weeks pay, whichever is the smaller. But in certain circumstances this amount can be much, much higher.
- For claims of discrimination and whistle blowing, compensation is potentially unlimited. Awards for discrimination are generally made up by awards for injury to feelings and health (£750 – £30,000), awards for loss of chance (unlimited), awards for aggravated damages (up to £20,000) and awards for loss of earnings (unlimited).
- The system is leaning against employers. Almost any redundancy comes with a claim for unfair dismissal, and if possible to allege racial, sexual or age discrimination, that will be added too.
- And more often businesses settle unfair dismissal claims under £10,000 to avoid the executive time and legal fees a defence would consume.
- A Tribunal is able to make a breach of Contract award of up to £25,000 with the opportunity to counter-claim. Should they win a Deductions from Pay case, a Tribunal can award the actual amount claimed or the one under dispute, without limit.
- Failing to provide childcare vouchers during unpaid maternity leave could be discrimination
- In misconduct issues, employers should comply with the ACAS Code of Practice on Disciplinary and Grievance Procedures (Code), as failure to follow the Code can result in an employee’s compensation award being increased by up to 25%, in the event of a successful claim
- New regulations that require employers with at least 250 employees to report on the difference in pay between men and women, and finally the introduction of stiffer national minimum wage penalties from a maximum of £20,000 per notice of underpayment to £20,000 for every underpaid worker, all creating additional work for HR, updating their parental policies and HR documentation, auditing their use of zero-hours contracts to include these new legislative changes.
- Businesses have to make contributions to a workplace pension plan for their employees, by deducting a percentage of their employees salary, and then making a similar contribution themselves. Non compliance with this legislation carries the risk of on the spot fines of £400, daily fines ranging from £50 to £10,000 depending on the size of the business, and are subject to court action for continued con-compliance.
These are just some of the issues that small businesses are faced with.
Don’t place your growing business at risk
Working with an HR and employment law expert will offer you the confidence and peace of mind that you are adhering to employment law best practice, and the added advantage to focus on serving customers and growing the business, while caring and looking after your employees.
Partnering with a Shared Services provider, operating within a Collaborative Engagement framework, as developed by The Future of Work ‘Collaborative Engagement’ Institute (FWCI), can help mitigate exposure to risk and compliance regulations, while you retain control over how you manage your employees.
This can be enhanced when adopting a Co-employment.
An administrative employment transfer model, whereby the co-employment management company is acting as an ‘employer of record’.
Overall, the Shared Services provider, acting as your ‘Extended Enterprise’, has a vested interest in keeping your business on top of employment law changes and updates, and will assist you with workers’ compensation claims, employee handbooks and policies that protect your company’s safety and financial success.
We constantly monitor and review developments in the benefits industry aiming to develop, manage and distribute knowledge on HR and employee benefit-related matters, laws and transactional processing and payments industry trends.