House of Lords passes employee-shareholder scheme with more concessions

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After two previous refusals, the House of Lords has finally accepted the Government’s proposal to introduce employee-shareholder contracts having secured a number of concessions.

The Government proposes to introduce the contracts from September this year. Under the contracts employees will receive shares in their employer’s business of between £2,000 and £50,000, exempt from capital gains tax, in return for giving up a number of employment rights. In order to get the Bill through the House of Lords, the Government has now agreed that:

  • benefits such as jobseeker’s allowance will not be affected if an individual does not wish to take up an employee-shareholder position;
  • there will be unfair dismissal rights from day one and protection against detrimental treatment for refusing to agree to an employee-shareholder contract;
  • employers will be required to provide full details of both the employment rights being given up and the rights and restrictions attached to an employee’s shares
  • there will be a seven day “cooling off” period, during which acceptance of an offer to become an employee shareholder will have no effect.

The provisions were only passed by the House of Lords at the third time of asking after the Government made a final concession, namely that an employee-shareholder contract will be valid only if the employee receives independent legal advice prior to entering into it. Furthermore, the employer will be liable to pay the reasonable costs of that advice.

For information on employee contracts please contact employment law specialist Vaishali Thakerar at Lawson-West on 0116 212 1000.

 

TUPE changes could lead to litigation from outsourced staff

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A commercial law firm has warned that the Government could spark litigation from outsourced staff by changing the TUPE employment regulations.

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) protect employees from unfair dismissal, cuts in pay or changes in their terms and conditions of employment if the business they work for changes hands. The regulations also currently protect staff who are employed by outsourcing companies from unfair dismissal or cuts to pay if the organisation using that outsourcer switches suppliers.

Some businesses have argued that this makes it difficult to restructure teams of contractors or improve the performance of contractor staff. The Government has therefore opened a consultation on removing this protection from outsourced staff. However, commercial law firm EMW have warned that the new regulations would create legal uncertainty over whether businesses are free to restructure their contractor staff or not, which could increase the risk of litigation between businesses and outsourced employees.

If you’d like information on your obligations under the TUPE regulations please contact Vaishali Thakerar at Lawson-West on 0116 212 1000.

 

 

Businesses taking longer to fill jobs

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Figures published by Randstad recruitment consultancy have shown that employers are taking much longer to recruit new employees today than when the survey started in 2008.

On average it takes 41 days to recruit at the moment compared to 25 five years ago. The number of interviews that employers are conducting for a position has also risen over the period from 1.6 to 2.4 interviews for a Junior Role, and from 2.6 to 3.4 for a senior position.

Mark Bull, UK chief executive officer of Randstad, explained: “Employers have become increasingly selective when it comes to interviewing staff. Prospective employees have to jump through many more hiring hoops today than they did pre-recession.”

An increasing number of businesses also require candidates to take aptitude or technical tests, with numbers more than doubling from 14% to 29%. Another factor in the length of the process is the vetting of credentials such as qualifications, criminal records and references.

If you’d like advice on your obligations as an employer including employment contracts and policies, please contact employment law specialist Vaishali Thakerar at Lawson-West on 0116 212 1000.

TUPE Consultation launched

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The Government recently launched a consultation on proposed changes to the TUPE Regulations (Transfer of Undertakings; Protection of Employment).

It said the proposed changes will “improve and simplify” the Regulations, and comes after a call for evidence on the effectiveness of TUPE back in 2011.

The consultation is now asking for opinions on various proposals to amend the regulations, including the:

  • service provisions changes;
  • employee liability information;
  • contractual changes, protection against dismissal and substantial changes to working conditions;
  • dismissals arising from a change in the workplace;
  • collective redundancy consultation;
  • micro-businesses;
  • terms and conditions derived from collective agreements; and
  • pre-transfer dismissals.

Employment experts are predicting that the proposed change to service provisions is likely to have the most impact, and that the changes could result in confusion for employers.

Jeya Thiruchelvam, the employment law editor at XpertHR, said: “It remains to be seen whether or not the Government’s proposed changes will have the desired effect of simplification. The Government has proposed a repeal of the provisions on service provisions changes. However, this will lead to greater uncertainty about whether or not a particular service provision change constitutes a ‘relevant transfer’ and, therefore, whether or not the TUPE regulations apply to it.”

If you’d like information on the TUPE regulations and how they affect your business please contact Employment law specialists Lawson-West on 0116 212 1000.

Launch of Employee Relations Institute

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The Employee Relations Institute has been launched by the government recently, to improve relationships between employers and their staff and promote the reduction of workplace disputes. It is now looking to recruit twenty founder members.

The Institute will offer advice and guidance to members about employee relations and will also offer a learning programme and access to formal qualifications in this area.

Jo Swinson, minister for employment relations, said: “I am very pleased to announce the official launch of the Employee Relations Institute, which will foster good relationships between employees and management.

“A positive workplace environment is good for business. It will help companies attract and retain the most talented people and employers will benefit from more motivated, productive staff. Strong managers also make British business credible for trade and investment.

This is why the Government is enhancing the employment law framework and working to promote culture change.”

For information on any aspect of employment law from employment law specialists please contact Lawson-West on 0116 212 1000.

Workers feel unguided by management

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Research published by performance management company Lane4 recently shows that nearly nine out of 10 UK workers say they don’t get the training and guidance required for their role from management, leading to a high rate of job dissatisfaction.

The research found that 57% of workers don’t believe they are being communicated to clearly about their own career progression, with three quarters saying they wanted to know more about the organisation they work for.

The study was undertaken among 1,500 UK employees. Adrian Moorhouse, Managing Director of Lane4 commented: “Ineffective communication between employees and management has serious consequences on both morale and performance. With over three-quarters of workers reporting they don’t feel like they’re being communicated to by their senior management, there’s a real opportunity for business leaders to develop a line of sight between the visions and strategies created by senior levels… This will ultimately help to drive employee engagement, which we know has a direct impact on business results.”

For information on any aspect of employment law please contact employment law specialists Ashley Hunt, Carrie-Ann Randall or Vanessa Crookes at Lawson-West on 0116 212 1000.

Employers remain committed to staff training

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A survey conducted by the Association of Accounting Technicians has shown that employers are still investing heavily in staff skills and training, despite the vagaries of the economy.

Some 92% of those surveyed also expect to invest the same or more money and time into improving their staff qualifications next year as they have done this year. 44% of respondents are expecting to use in-house training more in future while 31% are expecting to concentrate more on remote learning availability.

In support of this, the survey showed that many employers are changing the way they provide staff training with 44% wishing to see more learning resources that can be downloaded e.g. podcasts, and 38% thinking about using live e-learning. Among smaller employers, there is a preference for personal interaction with 38% wishing staff to be trained face to face, compared with 10% of larger employers.

The survey results also suggest that employers are considering more than just finances when investing in training – over half said they saw a main benefit of improved staff qualifications and skills to be increased staff commitment and retention. Just 25% saw the ability to charge more for staff’s work as a main benefit.

If you’d like information on any aspect of employment law, including the right to request time off for training, please contact Ashley Hunt, Carrie-Ann Randall or Vanessa Crookes at Lawson-West on 0116 212 1000.

Employment legislation a burden for employers

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YouGov research, commissioned by recruitment company Brook Street recently has shown that only 9% of those taking part thought that existing employment legislation is fit for purpose, with 18% viewing current legislation as “over-engineered” and 16% feeling that it did not provide businesses with the flexibility they need.

In addition, of the employers taking part, many felt burdened by ‘red tape’ and struggled to keep up with new regulations. One such example concerns the changes to pensions being brought in this month, with only 37% of the respondents ready for this and 28% not even aware of the legislation.

Furthermore, 40% of those surveyed said that regulations deterred them from taking on new people; 16% said that the rules made them nervous about dismissing employees who were underperforming and 16% also expressed a fear of non-compliance.

If you’d like some help with how employment regulations affect your business, please contact Ashley Hunt, Carrie-Ann Randall or Vanessa Crookes at Lawson-West on 0116 212 1000.

 

Employers face ‘make-or-break’ time, says CIPD

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A recent survey by the Chartered Institute of Personnel and Development (CIPD) showed that a third of private sector employers had kept on more staff than they needed to avoid losing valuable skills. This now means that they are facing a ‘make or break’ moment, with many likely to be forced to make job cuts if the economy does not pick up in the next year.

This comes against a backdrop of falling unemployment, with official figures showing that unemployment fell to 2.58 million in the three months to May, from a high of 2.68 million in November 2011.

The CIPD warned that the trend to decreased unemployment could change if the economy does not start growing again soon.

Author of the report Gerwyn Davies said: “Recent falls in unemployment suggest that the labour market is on a sound footing, but a closer examination reveals that many employers are holding on to more staff than is required by the current level of demand in order to retain their skills…This is a make or break moment for employers – unless growth picks up many will find that they cannot hold on to some workers any longer.

“The tenacity with which employers are hanging on to skilled labour is a reflection of the high value they place on it and the damage they fear will be done to their businesses if they are forced to start making more redundancies.”

For information on any aspect of employment law please contact Ashley Hunt, Carrie-Ann Randall or Vanessa Crookes on 0116 212 1000.

 

Ministers call on employers to tackle mental health problems in workplace

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Deputy Prime Minister Nick Clegg and Care Services Minister Paul Burstow have called on employers to take three steps to boost the mental health of their staff in a bid to save £30 billion a year in lost productivity due to absence or underperformance.

Mental ill health including conditions like depression and anxiety costs UK business more than £1,000 per employee per year, with one in six employees currently estimated to have mental health problems: the equivalent of around five million out of the country’s 29 million workers.

A 2010 survey showed that only 28% of workplaces have a formal mental health policy in place, as a result of which ministers have launched their new initiative. Mr Clegg said: “Seventy million working days are lost as a result of mental health issues every year, costing businesses £1,000 every year for each employee. Managing mental health at work well can save around 30% of these costs – businesses cannot afford not to take mental health seriously.”

The new scheme has been put together by the government in partnership with five of the UK’s largest mental health organisations (Mind, Rethink Mental Illness, Turning Point, Centre for Mental Health and the NHS Confederation’s Mental Health Network). Its first step is for a company to sign up to the government’s ongoing ‘Time to Change’ campaign, which has recently been boosted by an £16 million. By signing up, organisations would make a public commitment to end mental health discrimination and receive support from campaign experts.

The second recommendation is to appoint a staff member to act as a mental health expert or to train several people to become more aware of the issues involved in order to reflect the First Aid training provided by most employers.

The final step recommended by ministers is for companies to use the Health for Work Adviceline, which provides occupational health and well-being support for small-to-medium-sized businesses in England by calling 0800 077 88 44.

If you’d like information on any aspect of employment law including setting policies and procedures please contact Ashley Hunt, Carrie-Ann Randall or Vanessa Crookes at Lawson-West on 0116 212 1000.