Government plans crackdown on illegal immigrant workers

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The Conservative government is planning to clamp down on illegal immigrant workers with measures including seizing their wages, prime minister David Cameron will announce in next week’s Queen’s Speech.

It will apply to both those migrants who have entered the country illegally and those who have overstayed their leave.

The immigration bill will make it illegal for businesses and recruitment agencies to only advertise job vacancies overseas. Companies will also be told when their employees’ visas expire.

It is claimed the measures will close a loophole that only allows migrants with leave to remain to be prosecuted if they work illegally. Currently those without leave sit beyond the scope of the law.

Cameron will say: “The truth is it has been too easy to work illegally and employ illegal workers here. So we’ll take a radical step – we’ll make illegal working a criminal offence in its own right.

“That means wages paid to illegal migrants will be seized as proceeds of crime, and businesses will be told when their workers’ visas expire. So if you’re involved in illegal working – employer or employee – you’re breaking the law.”

He will argue that “uncontrolled immigration” damages the UK labour market and suppresses wages.

 

CBI urges employers to ‘speak out clearly’ on benefits of EU membership

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The CBI is stepping up its campaign for the UK to remain in the EU in the face of a referendum, with president Mike Rake urging members to speak out against leaving the union.

At the CBI annual dinner tonight, Rake will tell member businesses to “turn up the volume” on the benefits of EU membership. He will advise employers to “[speak] out clearly and in a language that people can understand” and say that there is “no credible alternative” to EU membership.

Rake will also raise the issues of immigration and skills. “We need to keep up-skilling our population at home and attract the best and brightest European and global talent,” he is expected to say. “Many businesses, and our National Health Service, could not operate without skilled migration.”

However, while arguing for remaining in the EU, he will acknowledge the issues that often come from “poorly thought-out legislation – especially on employment law”, saying this “can be a real headache for business”.

Prime minister David Cameron has promised an in/out referendum on Britain’s membership of the EU by the end of 2017.

Chief executive of the Recruitment and Employment Confederation Kevin Green said he is concerned a referendum “could create uncertainty for businesses”.

“Markets need stability, and our strength comes from the UK working together and as part of the EU. We will continue to advocate the UK’s ongoing membership in a reformed EU,” he said.

A recent survey by RSM and the European Business Awards found 75% of UK business leaders think the UK should stay in the EU, and 23% think it should exit. Across Europe, 86% of business leaders think Britain should stay and 76% think leaving would have a negative impact on the UK economy.

The main reasons cited by UK leaders to stay in the EU were the economic advantages brought by membership, including a strong trading position, free market, access to skilled workers and greater commercial opportunities.

‘We are not amused’: Industrial action at the Royal Collection Trust

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The Queen is currently facing industrial action. 84% of Royal Collection Trust employees voted in favour of action short of a strike. Their complaints include that they are being paid less than the living wage (£14,400 in some cases) and they have to do additional unpaid duties such as tours.

The Trust has responded stating that staff were paid above market rate for Windsor, and the guided tours are voluntary and as such they shouldn’t be paid extra for them. The action the employees are taking is to ‘work to rule’ by refusing, for example, to undertake these voluntary unpaid tasks.

Working to rule is a risky approach to take. The Employment Rights Act (1996) only requires an employer to provide a statement of ‘the title of the job which the employee is employed to do or a brief description of the work for which he is employed’. As a result, most contracts only contain broad statements of what someone’s duties are or merely say that ‘duties are commensurate’ with their job title.

Even if there is a job description, the final clauses often recognise the requirement for flexibility when working, listing ‘such other duties requested of the employee’. Fixed defined roles are rare, especially in a skilled UK workforce who are often expected to decide on what the tasks required are and how they should be done.

This built-in flexibility is good for an employer. Working to rule may expose employees to allegations that they are in some way refusing to do part of their core contractual duties. In short, the staff member may be refusing to do their job. In the absence of sanctioned strike action, refusal to follow a lawful order in employment can be a disciplinary issue, which could be seen as an act of deliberate (gross) misconduct allowing for summary dismissal.

The Royal Collection Trust has stated that the tours undertaken by staff were voluntary. Therefore the above does not apply to this situation. It does, however, exemplify the converse risk for the employer in relying on staff undertaking duties outside of a formal job description. Employees may cease to do such voluntary tasks without fear of any sanction, especially if they are not reflected in their remuneration.

Voluntary duties are by their nature ones you cannot demand employees do. It is possible sometimes to argue that staff undertaking voluntary tasks for a long period have accepted these as their contractual duties, but only if this does not conflict with any written statement. Even then the arguments are problematic, and in this instance the Trust has had to provide people to cover the gap in services.

From an employer’s perspective flexibility is vital. Often small organisations can only function if it exists. For this reason contracts and job descriptions should reflect this requirement. Statements of duties should be reviewed periodically to ensure any voluntary tasks are incorporated. This should then limit the scope of threats to work to rule. Conversely it also allows for a more transparent discussion regarding pay. Good will may make a relationship work, but reliance on it could be bad for business.

This article was published courtesy of HR magazine and was written by David Buckle (pictured) an employment consultant at Cubism Law

 

Monitoring absence a widespread issue

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Many companies’ workforce management software is not up to scratch, according to research.

How satisfied are you with your workforce management (WFM) system? If the answer is “very”, you are in the minority. Only 6% of those surveyed by a recent Workforce Management Trends & Challenges among UK Employers report said they were “very satisfied” with their WFM system.

And yet the same survey, by WorkForce Software, found such systems are becoming increasingly vital to UK businesses.

Most crucial to manage through such a solution apparently is absence. Almost half (47%) of respondents indicated that they would prioritise absence in evaluating a new solution – little wonder when you consider that employee absence costs UK employers £31.1 billion per year. Just under half (44%) raised absence abuse as a top concern.

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What is needed, according to the report, is real-time knowledge. “The ability to track employee absences in real time can… reveal absence patterns – from when employees are most frequently absent to when they come in late or leave early,” it stated.

Real-time tracking could also empower managers to be more proactive in managing schedules and help with strategic workforce planning. But on the downside, it also raises important issues around trust. How closely should employees be monitored?

Despite that potential hurdle, more than half (55%) of organisations appear to agree that doing things in real time could help their business, citing a lack of real-time communication as a factor inhibiting their ability to best manage employee absence.

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Yet workforce management is still largely a manual process. The three workforce management functions most commonly done on paper are staff scheduling and rostering (52%), labour analytics (41%) and time and attendance (36%).

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But as HR departments continue to jettison admin, the WFM automation revolution is surely just around the corner.

 

Regulation and policies not improving ethics in business

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Increased regulation and policies around fraud and corruption are not translating into more ethical behaviour, professional services firm EY has found.

According to EY’s 2015 Europe, Middle East, India and Africa (EMEIA) Fraud Survey, while 46% of UK businesses said regulation in their sector had increased in the past two years, only 15% reported it having a positive impact on ethical standards in their company.

Less than a third (28%) described their own firm’s ethical standards as “very good”, but this beats the EMEIA average of 26%.

While the survey found most companies to be implementing policies and procedures around fraud and bribery, there appears to be a gap between policy and action. For example, 60% said their organisation has an anti-bribery or anti-corruption policy and code of conduct, but only a quarter (25%) stated action had been taken against staff for breaches.

On whistleblowing, 79% reported that their company has a whistleblowing hotline, but only 28% said management always follows up on whistleblowing reports. This is less than the EMEIA average of 32%.

More encouragingly, it appears UK workers have a greater awareness of the bribery act than in 2013. In 2013, 19% said that offering personal gifts would be justified to help their business survive. This year only 5% agreed with that statement.

Overall 27% of UK respondents believe bribery and corruption is widespread. This is down from 37% in 2013 and much lower than the EMEIA average of 51%.

EY partner and head of fraud investigation and disputes John Smart said policies are “just one lever” in managing fraud, bribery and corruption risks.

“Changing culture and behaviour is a difficult and long-term process,” he said. “It appears that UK employees have heard it all before on anti-bribery and anti-corruption issues and are lacking faith in senior management to clean up.”

He added: “In order to meet the corporate ethics challenge, boards will need to supplement their anti-fraud, bribery and corruption policies with consistent messaging from the top, together with the right enforcement, rewards for whistleblowers and highlighting role models.”

 

Business secretary confirms tougher strike laws

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Recently appointed business secretary Sajid Javid has confirmed the Conservative government will follow through on plans to toughen up strike laws.

Speaking to the BBC Today Programme, Javid said there will be “some significant changes to strike laws” and that changing legislation in this area will be a “priority”.

He confirmed that the Conservative party will limit and control strike action in the public sector by introducing a need for a minimum 40% backing from eligible union members.

Strike ballots will need a minimum turnout of 50%.

Javid reiterated that the government will also end a ban on using agency staff to cover striking workers, and place curbs on picketing.

Commenting on the announcement, Pinsent Masons employment partner Chris Mordue said the new rules are “the biggest overhaul since the Thatcher government”.

“Although these new rules would mean that unions would have to work harder to secure a mandate for lawful industrial action, the risk of business disruption for employers will not necessarily diminish,” he added. “While we could see an increase in unofficial action and wildcat strikes, the union response is likely to be more sophisticated.”

This “sophisticated” action could include social media campaigns and protests, Mordue said.

“These campaigns – which can be very disruptive and difficult to counter – can be run without any industrial action ballot so would not be affected or restricted by the legal changes being planned, making them an even more attractive option for the unions.”

Focus on apprenticeships

Javid also announced the government will focus on apprenticeships, aiming to create three million more over the next five years.

He also confirmed plans that mean young people will have to take up apprenticeships and community work in order to keep receiving benefits.

CBI deputy director-general Katja Hall welcomed the government’s “ambitious targets” but called for employers to be given “greater control over funding to develop high-quality apprenticeships that work for their industry, helping the UK to combat its growing skills gap”.

“Better co-ordination between the government and businesses will also ensure apprenticeships are routes to good careers,” she added.

 

What does the Conservatives’ win mean for employment law?

With the Conservatives now in power following last week’s election, we take a look at what can be expected in terms of changes in employment law.

Zero hours contracts

Most of the political parties took a hard view of zero hours contracts and the Conservatives are no different. Exclusivity clauses are almost certainly going to be banned through bringing in force section 153 of the Small Business, Enterprise and Employment Act 2015.

Wages

The national minimum wage will be increased to £6.70 on 1 October 2015 as expected and by the end of 2020 a commitment has been made that it will reach £8. Alongside this, the personal tax free allowance will be increased to £12,500 and will become linked to increases in minimum wage.

Public Sector redundancy payments

The Conservatives plan to tackle public sector enhanced redundancy payments. It appears that this will be done by capping the redundancy payments to £95,000 with an exception for those who earn less than £27,000. Provision will also be made for the repayment of public sector exit payments in certain circumstances.

Industrial action

A number of proposals for reform have been suggested in this area to prevent “disruptive and undemocratic strike action”. Amongst suggested reforms, the ban on employers using agency workers will potentially be lifted and strike action in important public services will require 40% of eligible voters to vote in favour of the strike.

Tribunal fees

The Conservatives have committed to retaining the current tribunal fee system, subject to the outcome of the judicial review appeal.

Apprenticeships

The Conservatives are keen on creating extra apprenticeships and have pledged that three million more will be created over the next three years. Incentives may be introduced to encourage this commitment to be realised.

Equality

The Conservatives aim to ensure more disabled people are able to gain employment and further intend to promote gender equality by requiring companies with over 250 employees to publish the difference in average pay of their male and female employees.

British Bill of Rights

The Conservatives are keen to have decisions on human rights made by UK courts; they plan to introduce a new British Bill of Rights which would replace the Human Rights Act 1998.

The UK’s membership in the EU may also be renegotiated with a yes/no referendum expected by the end of 2017. This would have a significant impact on employment law.

Long term sickness

The Conservatives say they aim to aid those suffering from long-term but treatable conditions, such as obesity or addictions, in returning to work by ensuring they receive the medical treatment they need. Benefit implications may result if medical treatment is refused.

Paid volunteering leave

It is proposed that public sector organisations and large companies (with over 250 employees) will be required to foot the bill for up to three days a year volunteering leave for all employees.

In conclusion

The Conservatives’ say their policies are focused around their commitment to increasing employment in the UK. In the coming months we can expect to see changes to reflect the pledges highlighted above.

This article has been drafted on HR Legal Service’s behalf by Ward Hadaway Law Firm. Ward Hadaway Law Firm is one of HR Legal Service’s strategic legal advisory partners and provides certain services to our customers through a range of different Legal and HR support services offered by ourselves to the corporate market.

The content of this article does not constitute legal advice and it should not be relied upon. Specific legal advice may be required to address your specific circumstance.

 

Business experts react to election result

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Business experts have reacted to the election result with requests including pensions stability, a sensible approach to immigration, ongoing EU membership and more coherence between programmes for the unemployed.

A Liberal Democrat MP ‘cull’ and the loss of pensions minister Steve Webb is cause for concern regarding pensions stability, warned pension and savings provider GenLife.

“The loss of key members of the coalition, who have been instrumental in preparing and delivering sweeping pension reforms over the last year, will slow the momentum for changes that will help solve the pension crisis,” said managing director Nick Ayton.

He added: “Until this week, we had a very good minister for pensions in the shape of Steve Webb, someone who understands the industry and has worked hard to establish a long-term programme of action. Now we are left unsure as to who will be captaining the ship and whether or not they will be up for the job.”

“The big question is which person will get the now vacant pensions minister brief. We’ve enjoyed a period of consistency with Steve Webb, the incumbent for the whole of the parliament,” agreed technical director at pensions and benefits provider Broadstone, David Brooks. “We may be set for a return to a period of pensions musical chairs. Boris Johnson would certainly be an interesting choice.”

The National Association of Pension Funds (NAPF) requested an independent commission for pensions. “We reiterate our belief that an independent commission is the best way to address the challenges ahead – giving the new minister the benefit of independent expertise and analysis as she or he seeks to make policies that last for the long term,” said chief executive Joanne Segars.

Meanwhile Tapan Datta, global head of asset allocation at risk management, insurance and human capital consulting provider Aon Hewitt, called for the pensions measures set out in the Conservative party’s general election manifesto to be honoured, “including the continued use of the ‘triple lock’ for state pension increases and the reduction in tax relief on pension contributions for people earning more than £150,000”.

Concerns around employment and skills

Regarding employment and skills, the Association of Employment and Learning Providers (AELP) has said youth unemployment must “remain a major priority”.

“We look forward to discussing with the government how for example, the proposals for a new Youth Allowance for unemployed 18- to 21-year-olds will be linked to apprenticeships and traineeships.

“AELP’s own manifesto called for greater integration of employment and skills programmes and we believe that it will be a wasted opportunity if we don’t see more progress on this during the next five years,” said CEO Stewart Segal.

“We will urge ministers to drive more coherence between programmes for the unemployed, including more integrated contracting processes, success measures and provider payment methodologies.”

The Recruitment & Employment Confederation (REC) called for a sensible approach to immigration to avoid skills shortages.

Chief executive Kevin Green said: “The Conservatives have promised to focus on economic growth and competitiveness, which we anticipate being positive for the UK recruitment industry. However, we need to convince the new government to adopt a sensible and balanced approach to immigration so that UK businesses can hire the talent and skills they need to succeed.”

The REC also advocated ongoing membership of the EU, to avoid “uncertainty for businesses”.

The Confederation of British Industry (CBI) has called for “an ambitious, achievable [EU] reform agenda”.
“The majority of businesses want to stay in a reformed European Union, which opens up the world’s largest market of 500 million consumers,” said director-general John Cridland.

 

Pensions compliance ‘crowding out’ other retirement objectives

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Organisations are neglecting more strategic retirement objectives as they struggle to keep pace with changing pensions legislation, according to research by Towers Watson.

Towers Watson’s Fit for Retirement report found that 56% of organisations surveyed said compliance was one of their top defined contribution (DC) pensions priorities.

Compliance scored significantly higher than helping employees to retire (38%), competitiveness (31%) and attraction and retention (30%) as drivers of pensions provision.

Head of Towers Watson’s Fit Age programme Phil Percival said that compliance is “crowding out employers’ ability to focus on retirement adequacy”.

Recent changes to pensions legislation include April’s pensions freedoms, which allow savers to draw down some or all of their money before retirement, the introduction of auto-enrolment and reductions in the annual and lifetime allowances.

“Such a flurry of change is preventing companies from focusing on the real reason for providing pension plans – either for the employer, in terms of attraction and retention, or for the employee in terms of their ability to retire,” Percival added.

In the US, where pensions regulations have been more stable, Towers Watson found a very different story, with compliance at the bottom of the list of priorities for employers (20%). US employers ranked employees’ ability to retire and competitiveness higher, at 29% each respectively.

Percival said the UK’s ageing workforce means that businesses must think more carefully about workforce planning, benefit costs and succession planning.

“With the number of people in employment aged over 65 already doubling in the last 10 years, employers need to make sure that they understand the financial situation of their workforce, in order to gauge the extent to which workers will be able to retire,” he said.

“With this understanding they can start to help employees more effectively plan for retirement at a time of their choosing, as well as planning their own workforce requirements in the near future.”

 

Where next for zero-hours contracts?

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Opinion on the value of zero-hours contracts is divided. But what will happen if legislation is amended after the general election?

Whoever is prime minister from 8 May, zero-hours contracts’ days are numbered. Parties have pledged varying degrees of reform to the flexible working arrangements, and as a result, employers with contracts that require employees to be available for work without guaranteed hours have begun considering their options.

Aside from the Green Party’s proposed outright ban, Labour has announced the most controversial proposals. If in government, it would introduce legislation that gives employees working regular hours at a company for more than 12 weeks the right to a regular contract. According to the Office for National Statistics, this could affect 697,000 people – 2.3% of all those in employment.

An extra burden

The Work Foundation chief economist Ian Brinkley says this approach would add an extra burden to employers, who would have to determine how many hours to include in a contract. “How are you going to measure the hours they worked before they go on a regular contract – what counts towards that requirement?” he asks. “Some employers have to do this anyway for purposes of working time regulation, so it’s not an entirely new concept, but if it’s something they haven’t had to do up to now with zero-hours work, it’s going to make things more difficult.”

Brinkley suggests the change would hit companies such as Sports Direct hardest, which reportedly employs 75% of its 19,000 UK workforce on zero-hours contracts. However, he expects McDonald’s, which employs 90% of its 82,800 staff under the arrangements, would be able to alter its policies. “The way it’s been described to me it sounds like a very sophisticated shift system, so I suspect [McDonald’s] could move to a more conventional shift system with regular work and it wouldn’t be a huge imposition for them,” he says.

Brinkley favours the Liberal Democrats’ proposed reforms, which would give workers a formal right to request a fixed contract. If it remains in power, the party also plans to consult on introducing a right to make regular patterns of work contractual after a period of time. “It seems reasonable to have a right to request as you would for any other form of flexible employment,” says Brinkley.

Getting around the law

Neither Sports Direct nor McDonald’s would discuss zero-hours contracts with HR magazine before the results of the election. But according to independent employment law specialist Selwyn Blyth, it’s likely employers will find ways to avoid new legislation.

“One of the biggest benefits to business in this country is around flexible labour,” he says. “Depending on the level of regulation introduced, either all the employers will breathe a sigh of relief and carry on, or if it is more regulated they’ll find a way around it.”

One way employers can do this is to tell staff to become self-employed. Another is to start using agency workers. Blyth says smart employers could easily switch workers from an agency with enough regularity to avoid 12-week limits.

He also suggests employers could avoid regulation by guaranteeing one working hour a week in contracts. “Whatever regulation you put in place, even if you have anti-avoidance provision, there’s always some other side of the line,” Blyth says. “Even if [the regulations] said anything with less than 10 hours is not permissible, you’d probably end up with everyone giving 11-hour contracts.”

Blyth further points out the Greens’ proposals for an outright ban would be difficult to achieve, because there is no legal definition for zero-hours contracts.

More agency work?

CIPD labour market adviser Gerwyn Davies says CIPD evidence suggests employers are likely to switch to using agency workers. He says this would lead to employees having fewer rights.

“The vast majority of zero-hours contract workers are employees, so not only do they enjoy a much fuller range of rights, but in the majority of cases they are eligible and benefit from training offered by the employer,” he explains. “That may be at risk if they were put on agency work contracts because you don’t have that same relationship. What may happen is lack of continuity.”

In March 2015, the passing of the Small Business, Enterprise and Employment Bill into law banned exclusivity clauses in zero-hours contracts. These prevented workers signing contracts with other employers. Davies says this was the right decision, and would impact few employers as CIPD research found such clauses were used “in a very small minority of cases”.

Upholding this change is all the Conservative party has pledged around zero-hours contracts in its manifesto. Conservative work and pensions secretary Iain Duncan Smith has said zero-hours contracts can offer employees a work-life balance. UKIP’s manifesto also states the party recognises the contracts “suit many people”.

But similarly to Labour, the Conservative party also wants businesses with more than 50 members of staff to give workers on zero-hours contracts either a full- or part-time secure employment contract after one year, upon request.

Pure exploitation?

But Labour’s adviser on employment, Norman Pickavance, recently appointed head of brand, culture, communications and sustainability at Grant Thornton, believes zero-hours contracts are “exploiting people” and have introduced an unnecessary level of insecurity into the job market.

He explains that Labour’s 12-week limit would provide enough flexibility for employers with fluctuating periods of demand. “All the data suggests people who have been employed for more than a year on zero hours are working an average 23 hours a week,” he says. “Those people, if they’re working regular hours, should get a regular contract.”

Pickavance believes zero-hours contracts are symptomatic of a breakdown in relationships between employers and their employees, which is in turn damaging British business. He says organisations are already consulting lawyers about how to get around new zero-hours legislation after the election.

“This is about people trying to make extra margin at the expense of one of their stakeholders, which is their people,” he concludes. “It’s resulting in low levels of employee engagement, increasing levels of stress and productivity levels in the UK that are the worst in the G7.”