There has been much talk this last week about zero hour contracts.  While the Office of National Statistics suggested about 250,000 people are on these types of contract, the Chartered Institute of Personnel and Development (CIPD) suggests the figure is nearer one million.   They report that the  average hours worked by employees on zero hour contracts is 19.5 per week, and of the 62% who are working part time, about a third (38%) would like to work more hours.

But is it all bad news?

Certainly for the employer the advantage is greater ability to manage peaks and troughs with a flexible workforce with limited risk and liability on their part.  From an employee perspective these types of contract may suit people who want to work hours that suit them because of other outside commitments and interests.

However, on the whole these types of contracts tend to have no guaranteed hours, employees have to sign to say they will only work exclusively for one employer who can choose when and where the employee works.  Moreover, zero hour contracts are likely to affect women more than men and we already know that the 18 to 24 years old age group and those aged over 55 years are more likely to be in these types of contract.  All of which points to potential gender and age discrimination.

The recent debate has highlighted the need for more scrutiny among employers who use them to ensure they are upholding their responsibilities as fair and good employers.  However, the fundamental question is how can employers build a skilled and flexible workforce where staff are engaged and committed? Furthermore , if your organisation is using zero hour contracts in one of their many different forms, do you have clear guidance about what good practice you should be following?

Each year particularly around April the Government brings in a few changes and 2014 is no exception.  Here is a summary of some of the changes that may be relevant to you.  Please email or call Hafton Consultancy if you’d like to know more

Recent Changes:-

• Employers who do not pay the minimum wage can expect to be fined up to £20,000 (effective 7 March).
• The period during which certain convictions need to be disclosed to potential employers was reduced (effective 10 March).  Further guidance is available.

• ACAS is offering early conciliation from 6 April. Claimants must now send details of their dispute to ACAS who will attempt conciliation and settlement, before the claimant can initiate an employment tribunal claim.  Further guidance is available.
• The maximum civil penalty for illegally employing an immigrant rose to £20,000 (effective 6 April).
• The rates of statutory sick pay (SPP) increased from £86.70 to £87.55 from 6 April.
• The basic rates of maternity allowance and statutory maternity pay (SMP), statutory paternity pay (SPP) and statutory adoption pay (SAP) all increased from £136.78 to £138.18 –from 6 April.
• Increased limits on employment tribunal awards – came into force on 6 April:
  • the maximum compensatory award for unfair dismissal rose from £74,200 to £76,574
  • the limit on a ‘weeks’ pay’ rose from £450 to £464.

Changes to come:-

• From 30 June the right to request flexible working will be extended to all employees with 26 weeks’ service.  ACAS are producing a new Code of Practice and non-statutory guidance for employers.

• National Minimum Wage rates– will increase from 1 October: the standard adult rate to £6.50, the development rate for those aged 18-20 to£5.13, the young workers rate for those aged 16-17 to £3.79, and the apprentice rate to £2.73.
• Employment tribunals will be able to order an employer to carry out an equal pay audit in circumstances where it is clear they have breached the equal pay provisions in the Equality Act 2010 – in October.

Government Consultations

The consultation on zero hour contracts which focused on the particular issues of the use of exclusivity clauses and transparency, has now closed.  Guidance is expected soon.

The Government has published three draft Regulations for consultation on shared parental leave and pay and is intending that shared parental leave will come into effect for babies due on or after 5 April 2015 or children matched or placed for adoption on or after that date.

Caste discrimination – a consultation is expected in 2014 on introducing caste as an aspect of race under Equality Act 2010.

A ruling last month by the Employment Appeals Tribunal (EAT) has sent employers, who take on staff on non-guaranteed overtime, into a bit of a panic.  The EAT ruled that any non-guaranteed overtime should be included when calculating holiday pay.  So what does this mean?

The problem lies with employers where staff are working on a low basic salary (say 40%) with the rest of their pay made up in commission (60%) and those where employers pay staff essential overtime.

The UK government has always stated that employers should use basic pay when calculating how much a worker should get paid while they are on holiday. This was outlined in the Working Time Regulations Act of 1998. It means that overtime and commission, which normally helps to increase average pay levels, is not included when calculating basic holiday pay. This puts the UK at odds with the European Working Time Directive, which doesn’t specify how holiday pay should be calculated, and suggests that overall remuneration should be taken into account.

The discrepancy between British and EU law came to a head earlier in the year when several cases were brought to the European Court of Justice by UK workers whose holiday pay was calculated using only basic pay.  Last month the EAT ruled in the workers’ favour, setting a precedent for how workers’ holiday pay will now be calculated. However, this only applies to the minimum four weeks’ holiday required by EU law and not the additional 1.6 weeks provided by UK regulations or any discretionary holiday on top of that.

In the meantime Vince Cable is setting up a task force under the Department for Business, Innovation and Skills (BIS) to look into the implications and some employment law practices are advising employers to assess their risk by assessing their potential claims under the ruling.

Some employers are sitting tight in the hope there will be a further appeal, while others are using this time, as per the advice from some employment law practices, to do some analysis in their own organsations to see how many of their employees are on non-guaranteed overtime.  However, it is unclear in some instances how employees will prove that the overtime they do is essential to their job.

So, if you are winding down to the Christmas break, maybe there is an opportunity for you to have a look at who might be eligible for recalculated holiday if this applies?

Wishing you all a very Happy Christmas from Hafton Consultancy.

It is surprising to see how many organisations are abandoning their annual appraisal schemes – or is it?   People love to complain about the annual appraisal meeting – I have done it myself. Line managers struggle to think through what they should say, individuals being appraised don’t enjoy the process and the HR team get frustrated with line managers and individuals not completing the appraisal meetings and write- ups on time.

There have been too many stories of individuals, who thought they were doing a good job, and their line manager telling them they are doing a good job and then they get a low rating at the end of the year.

Corporations such as Google, Facebook and Netflix have bypassed annual appraisal altogether. In their thinking the young generation entering the workforce want to have immediate feedback. By pointing out excellent performance and problems as they arise, employees have an opportunity to change behaviour that makes an immediate difference. Why wait until the end of the year?

One of the problems is defining the purpose of appraisal because people need three types of feedback; they need

• appreciation – knowing they are making a valid contribution
• coaching – support in doing an even better job and
• evaluation – a critical and objective review of their work

Appraisal tends to muddle these together according to Sheila Heen and Doug Stone in their book “Thanks for the Feedback “. They also discovered from their research that organisations tend to focus on helping managers to give better feedback – a “push” model of learning that is helping line managers have a set of different tools to help deliver the key feedback messages to staff.   However, they soon realised that it is the “receiver” that chooses “what they let in” so as well as helping line managers it is equally important to support staff receiving feedback to make to most of learning from the feedback – even if delivered in a poor way!

So should your organisation abandon the annual appraisal process? Probably not! However, it would be worth making sure line managers and staff are equipped to give and receive regularly feedback, have opportunities to meet regularly (every four to eight weeks) and that line managers and staff are encouraged to have the conversation in the moment rather than waiting for any formal process so that the organisation has a more trusting environment.

McKinsey recently carried out qualitative research in the USA, conducting 200 in-depth interviews with young professionals across 120 companies.  The purpose was to look for ways to engage younger employees effectively.

Each generation seems to see stark differences in the upcoming generation. McKinsey came across the following quote:

“Because all the peoples of the world are part of one electronically based, intercommunicating network, young people everywhere share a kind of experience that none of the elders ever had. . . .” The quote was written in 1970!

Commentators have branded today’s youth as “millennials”—workers who are said to be difficult to manage and likely to quit at a moment’s notice. But can you define everyone born between 1980 and 2000 by a handful of general characteristics? The reality is more complex.

The research highlighted what shapes this ‘millennial’ generation: the harsh economic realities they’ve seen, the burden of student-loan debt and coming into a workforce amid the global financial crisis. This has understandably influenced their decisions to join or leave companies and sharpened their desire to find meaning and purpose in the chaos of the world in which they’ve grown up. Millennials also speak of themselves as hyper-connected globally—“always on”—and this natural affinity for technology provides them with unique skills and insights that managers can use.

So how are organisations adapting? Here are some examples of actions some companies are adopting.

Put communication on steroids: Yes, all employees are eager to hear from top management, but millennials expect this to happen at hyper speed, in real-time, with two-way communication that accepts input from everyone, followed by fairly immediate action.  One company in the research conducts surveys of its mostly millennial employee base every 90 days and reports the raw findings and analysis, to all employees. This approach provides unprecedented visibility into issues and solutions—and encourages a rhythm of continuous improvement.

Develop a culture of mentorship: Many young people thrive on collaborative work and support from colleagues, but few companies have figured out how to build a culture that helps existing employees to mentor new ones. One company is testing the idea of mentoring circles whereby three more experience employees support the a young person when they join. .

Get creative about professional growth: This young generation has grown up watching entrepreneurs reach the height of success before the age of 30.   They are frustrated by the lack of advancement opportunity in today’s flat structures.  Short-term, temporary projects over and above the day job are nothing new, but for millennials, who thrive on challenges, they are crucial and young workers say they are energised by job rotation programmes, a practice which has fallen by the wayside in many companies.

Make flexibility more than polite talk: Young employees value the genuine blending of their work and personal lives. Approaches whereby core hours mean that staff are responsible for their results, regardless of their work hours, creates trust. 
Flexibility is also important to millennials who are starting families and many cite their families as a top priority and they want more family-friendly policies at work.

 Make young employees part of the solution: Allowing millennials to pose questions that foster solutions, and to pause and engage with their elders before moving on to action means they can identify with the role of the manager. It’s crucial to encourage this two-way dialogue between the generations. Given the right attitudes, senior and junior leaders can bridge the cultural gap that divides them.

Young people can help show the way, not because they are so different, but because they have a fresh perspective and can raise relevant questions about why more progress hasn’t been made already. Leaders who listen, and have the courage to break new ground, can improve their odds of building a lasting legacy that serves generations to come.

Yes, each year the UK Government makes amendments to employment law which can be easy to miss. Hafton is committed to keeping you compliant with current employment law, so please get in touch if you have any questions. Here are some of the highlights of changes in 2016:-

Spring 2016

The new National Living Wage of £7.20 per hour applies to workers age 25 and over – from 1 April.
The National Minimum Wage amendment regulations also double the financial penalties if employers are found to have paid less than the minimum – from 1 April.
Statutory rates of maternity allowance and statutory maternity pay (SMP), statutory paternity pay (SPP), statutory adoption pay (SAP) and statutory sick pay (SPP) are usually increased in April each year, but remain unchanged this year.

The limit on a week’s pay (for calculating redundancy and unfair dismissal awards) increases to £479 – from 6 April.

Autumn 2016

Mandatory gender pay gap reporting is expected to be introduced in October affecting private and third sector employers with 250 or more staff in Great Britain. The first reports must be published by end of April 2018 and then annually after that date. Public sector organisations will be included at some time yet to be decided.

National Minimum Wage rates – will increase on 1 October: the standard adult rate for workers aged 21 and over to £6.95, the development rate for those aged 18-20 to £5.55, the young workers rate for those aged 16-17 to £4.00, and the apprentice rate to £3.40.

The link below will take you to a useful factsheet from the Chartered Institute of Personnel and Development.  It gives a summary of the full changes and in which month you can expect these to happen.   Happy reading.

http://www.cipd.co.uk/hr-resources/factsheets/employment-law-developments.aspx?utm_medium=email&utm_source=cipd&utm_campaign=cipdupdate&utm_term=674551&utm_content=060416-5484-8304–20160409130246-popular%20factsheet#link

Home working, also known as teleworking or remote working, is a work-life practice that has grown significantly in the last decade thanks largely to the technology that has made it possible for workers to perform their roles from home (outside the office) during business hours.  As more employees take up these arrangements, one of the questions still not altogether answered is whether staff under these arrangements, are more productive than their office-based counter parts.

One could consider that a revolution has occurred in the workplace in the last few decades. These changes such as socio-demographic shifts – increasing numbers of women in the workforce and an aging work population as well as technological advancements are affecting people’s expectations and needs from the workplace. An increase in the number of women participating in the workplace has contributed to the growth of dual income households, putting additional pressure on individuals to manage their work and their personal life. New technologies allow people to work faster and perform job tasks from any location at any time. We have also witnessed a change in cultural values where employees want to achieve a better work-life balance, rather than spending more time in the office.

A recent study was completed by a student at the London School of Economics and Political Science.  It comprised over 500 respondents to an on-line questionnaire and interviews with 28 employees and 12 managers.  The research suggested that the benefits of homeworking diminish over time for both the employee and the employer.  In practice when employees first take up such an arrangement it is seen as a ‘privilege’ and the individual feels indebted to their manager and will therefore go beyond what is required.  However, if homeworking is the norm, as more employees take up flexible arrangements, or as the employee continues in the arrangement, these positive behaviours decline and the arrangement is perceived more as an ‘entitlement’ in much the same way as paid holiday.

The study suggests that homeworking initially enhances performance and that the main value of homeworking is achieving a work-life balance and avoiding the daily commute to work.  From an organisation’s perspective homeworking, essentially offering flexibility, is seen as an investment in the individual and also a potential cost saving if desk space can be freed up, particularly when the organization is expanding.

So how can you make sure your organisation’s flexible arrangements are working for individuals and for your business?   Firstly, it is about managing expectations.  Regularly checking in with the staff member to make sure they are clear about their personal objectives and deliverables.   Secondly it will be important to review the arrangement annually during a performance review conversation to make sure it is still benefiting the individual and the organisation. So is home working / flexible work arrangement sometime you should put on your ‘to do’ list?