Work Foundation calls for stronger RPA legislation

learnatwork

Lancaster University’s Work Foundation has criticised the government’s “watered down” implementation of the Raising the Participant Age (RPA) policy.

In the paper Staying Power: Making the raising of the participation age a policy success the body calls for stricter rules around keeping those between 16- and 19-years-old in training.

Under current rules, which came into effect in the summer of 2013, young people are required to stay in education or training until the academic year in which they turn 17. From summer 2015 this will be extended to 18.

The paper focuses on the loosening of the legislation around RPA that makes participation by young people effectively voluntary. It also highlights a decrease in funding levels (down from £7.7 billion in 2010/11 to £7 billion in 2012/13) as a worrying trend that will take away the financial incentives for young adults to stay in education.

Lanacaster University Work Foundation researcher and author of the paper Beth Foley told HR magazine “short-term” thinking, along with funding pressure, is behind the government’s decision to decrease the money being put into the project.

“The effect of not being in education or work at a young age can have a profound impact on someone’s whole career,” she said. “So in the long-term there are savings to be made through not paying out benefits to those who struggle to find work. It can also be made up in potentially higher tax revenues in the future.”

 

Gender pay gap for managers rises to 34% in 40s

Gender

Female managers earn on average 34% less than their male counterparts by the time they reach 46, according to research by the Chartered Management Institute (CMI).

The 2014 National Management Survey is based on the pay data of almost 70,000 employees in executive positions, collected in conjunction with XpertHR. It suggests the pay gap for managers increases dramatically with age.

For those aged between 26- and 35-years-old it stands at 8%, and jumps to 23% for the age group between 36 and 45. At 46, the gap of 34% persists until retirement age (65), when it increases very slightly to 35%.

Bonus payments are also significantly higher for male executives, who receive an annual average of £53,010 compared to £41,596 for women.

The pay discrepancy means female managers would have to work on average 14 years more than their male colleagues to earn as much over a typical working life.

CMI chief executive Ann Francke called on companies to pay women and men “on the basis of their performance”.

“Lower levels of pay for women managers cannot be justified, yet our extensive data shows the pay gap persists, with many women hit by a mid-life pay crisis,” she said. “We have to stamp out cultures that excuse this as the result of time out for motherhood and tackle gender bias in pay policies that put too much emphasis on time served.”

Shadow minister for women and equality Gloria De Piero added the figures paint a “depressing picture” for women in the UK.

“We should be closing the pay gap for women at all stages of their working lives but instead we see pay inequality worsening for female managers as they progress and for working women across the country,” she said.

 

Pre-determining Disciplinary Outcomes

Mr J Linwood (J) v British Broadcasting Corporation (BBC)

J was appointed by the BBC as its Chief Technology Officer (CTO) in April 2009. Included in the remit of his role was the Digital Media Initiative (DMI), a project set up by the BBC to enable all of its programming to be entirely digitised. DMI was fraught with problems and following several reviews of the project, in April 2013 it was recommended that it be scrapped altogether. The overall cost to the BBC – and thus the taxpayer – was £98.4m.

J was subsequently informed that he was to be the subject of a disciplinary process and following a series of hearings between May and July 2013 was summarily dismissed. J exercised his right to appeal, but in January 2014 was informed that he had been unsuccessful. J therefore brought an unfair dismissal claim before the Employment Tribunal. He argued that he had been made a “scapegoat” for the failure of DMI and that the procedure followed was “substantively and procedurally unfair”.

The Tribunal noted that the BBC took such an expensive fiasco very seriously and there was held to be a cultural expectation within the corporation that those involved with failed projects such as this would resign. It was clear the BBC Executive Board were expected to “find a culprit” for DMI who would then quietly step aside.

Internal BBC correspondence was used as evidence that J had clearly been earmarked as this culprit and that it was essentially predetermined that he was to lose his job through either resignation or dismissal. J’s line manager (P) had even gone so far as to talk to a recruiter about finding a temporary CTO to replace J. All of this took place before formal disciplinary proceedings had begun.

Despite his obvious lack of impartiality, P also named himself in charge of the investigation and hearings and even after standing aside he was heavily consulted. The Tribunal described his attitude throughout as “unrelentingly and exclusively negatively biased” against J. The two individuals put in charge of the disciplinary and appeals process respectively were inexperienced in such matters and confused as to the underlying law, with the Tribunal recognising that they were clearly out of their depth in such a situation.

Specific instances of a complete lack of fair procedure were noted in detail:

• J requested a postponement of one of the disciplinary meetings, in part due to pre-arranged family leave and in part because he had only just been provided with some 3000 emails relating to his case. The meeting was instead brought forward by a day.
• When finally presented with all of the 16,000 documents relating to the case against him, J was given just one working day in which to assess them before his next disciplinary hearing.
• Having been rushed through the initial disciplinary procedure, J was then effectively in limbo for some seven months between his appeal and the production of the final outcome letter.

The Tribunal found in favour of J, subject to a 15% finding of contributory negligence. This was allocated as 10% due to J’s not calling for an in-depth review of DMI at any stage throughout the life of the project, and 5% to J’s complete denial that he was even partially culpable for the project’s failure.

This case is a helpful reminder that pre-determining the outcome of disciplinary hearings can provide evidence to a Tribunal of an unfair dismissal. Employers should also remember that any internal emails relating to a disciplinary hearing or issues has to be disclosed in legal proceedings. As the BBC learned, emails stating the outcome of the hearing before the internal processes will cause embarrassment during a Tribunal hearing. In addition, Disciplinary hearings should also be conducted in a fair, impartial and reasonable way to ensure fairness to an employee and ensure that in the event a Tribunal claim is lodged, it can be successfully defended.

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.

NEDs drive growth in law firms

 

boardroomss

UK law firms with at least one non-executive director (NED) on their board have seen revenue grow by one-third more than those without, according to figures released by executive search firm Edward Drummond.

The research is based on comparing the growth in revenue of the UK’s top 100 law firms since 2010. It found that companies with at least one NED have grown by an average of 12%, compared to 9% for companies without.

Almost one-quarter (24%) of law firms now employ one or more NED on their board.

Edward Drummond director Neill Fry told HR magazine choosing a NED with “strong commercial expertise” is crucial to driving growth.

“A director with a strong commercial background brought into a top law firm is likely to open up opportunities for introducing potential new clients, but they can also provide fresh perspectives on how the firm can access new lines of work,” he said.

Fry added that the study highlights the need for legal firms to “improve their management structures”.

“Law firms that have good corporate governance structures certainly aren’t exempt from failure, but they are more likely to have stringent processes for making strategic decisions,” he said.

“An NED can provide constructive challenges to the firm’s strategy and objectives – as well as acting as a vital sounding board – which can really help to support the firm’s growth.”

Dan Watts, also a director at Edward Drummond, told HR magazine firms are realising just having a strong CEO isn’t “the holy grail” of commercialism any more.

“To get someone in just for a few days a year often works well for both parties,” he said. “Having someone with strong commercial experience – sometimes within the FTSE 100 – can really drive growth through commercial experience.”

 

Shared Parental Leave – Are You Ready?

The coalition government’s much anticipated shared parental leave rights are set to be introduced for babies expected from, or children placed for adoption from, 5 April 2015. This means that employers can expect to receive queries and requests from expectant parents any time now.

The aim of the new rights is to introduce a more flexible system for both parents to take leave on the birth or adoption of a child. The mother-focused system of maternity leave of up to 52 weeks and shorter paternity leave rights will essentially become optional.

Parents wishing to share their parental leave and pay between them will need to “opt in”, in the absence of the opt-in the default position will be the existing right to maternity leave or adoption leave.

How will Shared Parental Leave work?

In very basic terms, the new system will allow a mother to curtail her maternity leave and any associated pay and put her remaining entitlement into a shared pot. The same applies for primary adopters in respect of their adoption leave and pay.

This shared pot can then be distributed between both parents as shared parental leave and pay.

The existing compulsory maternity leave requirements will remain in place (for most employees 2 weeks) but after that all of the remaining leave can be put into the shared pot. This means that up to 50 weeks of shared parental leave is available.

Each employee will be entitled to take shared parental leave consecutively or concurrently, as long as the total period doesn’t exceed the period that is jointly available to the couple in the shared pot.

The new scheme will require both parents to participate in early discussions with their respective employers regarding how they intend to divide their shared parental leave pot, serve the appropriate notices and provide evidence if the employer requests it.

Other points to note

• Mothers or primary adopters who do not have partners who qualify for shared parental leave may still decide to opt in to the shared parental leave system to give them more flexibility regarding the dates they take their leave.
• The existing right to up to 10 keeping in touch days will be enhanced by up to 20 further days which attach to the period of shared parental leave.
• From 1 October 2014 a new right for partners of expectant mothers to attend up to 2 ante-natal appointments with the mother will be introduced. This right is to unpaid time off.
• From 5 April 2015 primary adopters will be given a new right to paid time off to attend adoption appointments. The partner of the primary adopter will be entitled to unpaid time off to go with them.

Next Steps

The final draft of the regulations have been laid before parliament and government guidance has been published on the new rights.

Employers should consider commencing the process of updating policies and procedures and training managers in preparation for the introduction of the new rights.

Payroll systems may also have to be reviewed to ensure that the administrative arrangements for paying for any shared parental leave are in place.

The shared parental leave system is going to be complex and undoubtedly will face teething issues. Most commentators do not expect take-up to be particularly high when the rights are first introduced as it will take time for people to become familiar with the concept. In addition, historic take-up of similar rights has been low. For example, the right to additional paternity leave which was introduced in April 2011 was only used by 0.6% of eligible employees.

This article was written by Nina Robinson, a practicing solicitor and Head of Legal Services at HR Legal Services.

Employers may face extra costs over pension cap charges

pension saving

The financial impact of pension cap charges on employers and the pensions industry may be significantly higher than first thought, according to pensions experts Hargreaves Lansdown.

In the Budget earlier this year George Osborne announced a charge cap on commission payments of 0.75% for all pensions schemes. The cap is intended to reduce the amount scheme members pay to third parties and increase the total in their pot.

The Department for Work and Pensions (DWP) issued figures at the time estimating the change in legislation would cost the pensions industry £195 million.

Recently two of the largest providers, Standard Life and Scottish Widows, announced they have put aside £260 million to cover the charges between them. This suggests the cost to the whole industry will be much higher than the original DWP prediction.

This increased cost will also spread to employers, according to Hargreaves Lansdown head of pensions research Tom McPhail.

“Employers will no longer be able to enjoy the support of advisers paid for by commission,” he said. “These businesses will either have to pay a fee for the support services that they used to get from commission-paid advisers or move their scheme elsewhere.”

McPhail added that the overall disruption caused by a cap on charges will be “far greater” than first anticipated.

“We’re going to see market participants dropping out, possibly within only a year or two of putting an auto-enrolment solution in place,” he said. “It is inevitable that in some cases, particularly for medium-sized employers, additional fees will have to be paid to cover the cost of this work.”

Government announces supplier of new Health and Work Service

The Government has announced that Health Management Limited (HML), a Maximus company, which is reported to be the UK’s largest occupational health provider, will be the supplier of the new Health and Work Service (the service) which is to be launched later this year.

What does the service do?

The aim of the service is to help employers and employees manage sickness absence and help people return to work faster. It was created to replace the now abolished Percentage Threshold Scheme which enabled employers to reclaim statutory sick pay from HMRC.

The service will initially be introduced on a phased basis beginning in the North of England, the Midlands and Wales with a full national roll-out expected by May 2015.

Employees on sick leave will be referred to the Service by GPs and HML will then supply:
» an occupational health assessment when an employee reaches (or is expected to reach) more than four weeks’ sickness absence;
» a case manager, designated to each employee to support them through the assessment and who will design steps to get that employee back to work;
» a return to work plan; and
» general health and work advice for GPs, employers and employees via the telephone and a designated website.

How does the service benefit employers?

If successful, the service is expected to:
» reduce sick pay costs to employers and increase efficiency and output; and
» reduce the number of employees leaving employment owing to sickness absence and thus reduce the hours which employers have to spend on recruiting new staff and the associated costs of this.

What happens now?

The Government is due to meet with HML to discuss the service in further detail and ultimately decide on an official implementation date. We will keep you informed as to any announcement regarding this.

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.

Three-quarters of IT professionals bullied at work

bullyings

Three-quarters (75%) of IT professionals face bullying in the workplace, according to research by IDG Connect.

Bullying: The uncomfortable truth about IT is based on a global survey of 650 IT professionals. Eighty-five percent of those questioned have witnessed others being bullied at work. Despite this, only 8% admitted to bullying others and 45% didn’t answer the question.

Individuals are most likely to be bullied by a more senior colleague (74% of cases), 21% are bullied by peers and 5% by subordinates.

IDG Connect editor and research project leader Kathryn Cave told HR magazine the evidence suggests the nature of IT professionals means they can be less empathetic.

Introversion is a very common trait among IT professionals, but it’s not something that’s particularly well understood,” she said. “It can lead to people being isolated and mean they don’t work as well in teams.”

An IT development manager at an online retailer, who agreed to speak to HR magazine under anonymity, agreed bullying was commonplace in the sector.

“I have worked in companies where I have observed teams of developers get bullied by other senior staff,” he said, adding that he had seen several cases of “professionals on power trips”.

Is HR blindsighted?

The report also suggests more than two-thirds (68%) of respondents believe their employers in some way ‘condone’ bullying at work. Subsequently, only 61% raised the issue with leadership.

The role of HR in dealing with complaints is criticised in anecdotal evidence quoted in the paper. Founder of Benoit Consulting Suzi Benoit claimed bullying sometimes goes under the radar because HR professionals are far more focused on employee engagement.

“Now engagement is all the rage and companies have figured out that employees are more connected to them,” she added.

“Working towards goals, feeling respected and all those things that engagement implies, they can do much better as a company and be more successful financially.”

 

Average legal department grows headcount by a third in past year, with 65% expecting further expansion by 2016

  • EMEA legal departments increase to an average of 16 lawyers; up from 12 in 2013 and 10 in 2012
  • Over a quarter of departments have already recruited externally in 2014
  • Two thirds expect legal teams to increase over next two years
  • Expansion driven by rising internal spend; 45% of departments set to increase internal budgets

The size of the average legal department in EMEA countries has increased by a third (33%) in the past year, with internal teams rising to an average of 16 lawyers, according to research from international legal recruiter Laurence Simons.

The latest EMEA Legal Department Benchmarking Survey 2014 reveals over a quarter (26%) of in-house teams have already made hires this year, and 65% expect to add to their team over the next two years.*

In a sign of growing confidence no departments anticipate headcount will fall and over a third (35%) expect team size to remain the same.

This is a marked improvement on the previous two years, with nearly half (49%) having expected their headcount to remain static in 2013 and 45% in 2012.

Rising internal legal budgets driving expansion

The expansion of in-house legal teams is being driven by rising internal budgets, with 45% of departments expecting internal spend to grow over the next year, compared to just 33% who thought the same about external budgets.

In 2013, nearly a quarter (24%) of departments anticipated internal legal expenditure would decrease; there has been a marked improvement this year with the figure falling to just 6%. Businesses appear to be prioritising internal spend, with more than three times as many departments (22%) expecting a fall in external spending during 2014.

Rising internal legal budgets driving expansion

The expansion of in-house legal teams is being driven by rising internal budgets, with 45% of departments expecting internal spend to grow over the next year, compared to just 33% who thought the same about external budgets.

In 2013, nearly a quarter (24%) of departments anticipated internal legal expenditure would decrease; there has been a marked improvement this year with the figure falling to just 6%. Businesses appear to be prioritising internal spend, with more than three times as many departments (22%) expecting a fall in external spending during 2014.

Expanding in-house legal work

The past two years have seen a significant expansion in the areas of legal work carried out in-house, with substantial increases across the board. Specific areas of specialism such as taxation have seen the number of internal departments carrying out such work double – 16% are responsible for tax activity in 2014, rising from 8% in 2012.

Over the last twelve months, however, there has been a clear focus on corporate and commercial activity – now practiced by 87% of in-house teams, compared with 86% in 2013 – and bribery, corruption and compliance – up from 64% in 2013 to 69% in 2014.

The number of in-house legal teams carrying out work in banking and capital markets has remained stable from last year, at just under a quarter (24%). Across all other areas, the number of internal teams carrying out work has fallen, with just 43% doing regulatory work compared with 51% last year and 22% doing insurance and reinsurance, down from 30%.

In-house focus on intellectual property has also fallen marginally, but this remains the third area of legal work most commonly practiced by internal teams.

Naveen Tuli, Global Managing Director of Laurence Simons said:

“As the broader economic recovery begins to really take-off confidence is being reinvigorated within companies – but these findings suggest the recession still lies in the back of employers’ minds when it comes to outsourcing legal work, which is reflected in a continued shift towards expanding and investing in in-house legal teams.

“Many firms are choosing to take a long term perspective by hiring more internal staff and increasing legal expenditure, rather than send out work to private practices. From a budgetary standpoint, fixed workforces allow for greater stability when it comes to planning and forecasting compared to the ad-hoc casework often carried out by law firms.

“In terms of legal counsel, in-house teams can provide expertise that is complemented by detailed working knowledge of the company. Having a skilled team of lawyers on-hand internally means that corporations will be able to increase value for money, at a time when many are seeking to safeguard their long-term health after emerging from the depths of recession.”

Global outlook

As the size of legal teams in the EMEA region has increased by a third in the past year to an average of 16 lawyers, global teams have also expanded. The average legal department worldwide has grown by 57% in the past two year, increasing from 35 lawyers in 2012 to 55 in 2014.

Immigration Act 2014 – what’s new?

May’s announcement that the Immigration Act 2014 (IA 2014) would be making significant changes to the UK’s immigration regime has to date had little impact on employers. However as of 28th July 2014, many of the IA 2014’s provisions have now come into force – what does this mean for you?

What’s changed?

» Biometric information (such as fingerprints) is routinely required when an employee makes a visa application. The IA 2014 has extended the type of visas for which biometric information must be supplied and has extended the category of individuals who must provide this to include family members of non-EEA nationals. The definition of biometric information has been amended also.

» Changes to preventing illegal working were brought in to effect on 16th May 2014 by separate legislation to the IA 2014. Crucially, this increased the fine an employer could face if found to be employing an individual without the right to work in the UK (from £10,000 to £20,000 per employee). The IA 2014 now limits the right of appeal an employer has against such a penalty and in cases of non-payment, allows the penalty to be enforced as if it were a Court Order.

» The IA 2014 provides statutory ‘guidance’ for Court and Tribunal Judges to consider when determining whether any decision made under the Immigration Rules breaches an individual’s right to respect for private and family life. This guidance gives little weight to any private life or relationship established when the individual is in the UK unlawfully or when an individual’s immigration status is precarious. Judges should however consider that it is in the public interest to maintain effective immigration control, for individuals entering the UK to be able to speak English and be financially independent. This lessens the burden on taxpayers and allows the individual to integrate effectively.

What does this mean?

» The provision of additional biometric information may cause application processing times to slow down. Employers should check gov.uk which details current processing times for the different types of application in advance to ensure that a prospective employee’s visa is likely to be processed in time for them to commence work. Applicants should also be reminded of the likely requirement to provide biometric data after submitting their visa application. As this must be done in their country of residence, they should bear this in mind when planning overseas travel around this time.

» Where an employer is in receipt of a civil penalty notice the timescales for payment must be carefully noted to avoid a bailiff subsequently attending and if an appeal is to be made, you should seek advice regarding the process and timescale for doing so.

» The ‘guidance’ contained within the IA 2014 affirms that overturning any unfavorable immigration decision is difficult. Careful consideration should be given to whether the decision made is in the public interest before seeking to challenge this.

What else is on the horizon

The most important change for employers introduced by the IA 2014 is yet to come into force.

This is the new appeals regime which will introduce a significant reduction in the number of grounds on which a decision can be appealed. A right of appeal will only be available where an asylum or human rights application has been made and in all other applications, the appeals process will be replaced with administrative review. This will involve Home Office staff, rather than an independent Tribunal, reviewing decisions made by their Home Office colleagues.

There is no date for when this change will come into effect however it is expected that it could be as soon as October 2014.

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.