Thursday, 16 February 2017

Sham self-employment?

Q:      When is a self-employed person not self-employed?
A:      When they’re a really worker…..

Plenty of small businesses use freelancers to give them flexibility in meeting customer demand without the legal obligations and responsibilities of having employees.  The freelancer pays their own tax, and doesn’t have to be offered a set number of hours a week.
But here’s a sorry tale where this has worked out very expensive for a plumbing business.  And it’s now likely that similar arrangements will have to be reviewed carefully.
A plumber, Gary Smith, had signed an agreement with his company Pimlico Plumbers Ltd where he was described as a “self-employed operative”.  The wording of the contract suggested that he was effectively running his own business, providing a service to Pimlico Plumbers.
However there were some indications in his contract that in reality, he wasn’t genuinely self-employed.  For example, he was required to wear Pimlico’s uniform displaying the company’s logo, use a van leased from Pimlico (with a GPS tracker and the company’s logo), and work a minimum number of weekly hours.
On the other hand, he could choose when he worked and which jobs he took, was required to provide his own tools and equipment, and handled his own tax and insurance.
All went smoothly for 6 years until Mr Smith suffered a heart attack and decided he wanted to reduce his working days from five days a week to three.  Pimlico Plumbers refused his request, took away the branded van and terminated its agreement with him!
Mr Smith has now successfully brought a claim for disability discrimination.  He argued that he was entitled to basic workers’ rights – and this includes protection against unlawful discrimination.
Pimlico Plumbers argued unsuccessfully that Mr Smith was an “independent contractor”, rather than a worker or an employee, and therefore had no claim. 

The Employment Tribunal, looking at how Mr Smith worked in practice, found that he was a worker not self-employed.  Although he had registered as self-employed with HMRC and paid his own taxes, as far as employment rights are concerned the decision is that he should be legally classed as a worker because:  
  • he was obliged to provide his services personally
  • Pimlico Plumbers was more than just a customer of a business operated by Mr Smith.
Why does this matter?  Because people legally categorised as workers have the same rights not to be discriminated against, to minimum wage, to paid annual leave and to rest breaks as employees, and depending on earnings, need to be included in pension auto enrolment. 
So Mr Smith is now pursuing claims for disability discrimination and 6 years' arrears of holiday pay against Pimlico Plumbers...
But we need to make the distinction that workers aren’t the same as employees.  They don’t have the full range of protections given to employees, for example they aren't entitled to minimum notice periods, they aren't protected against unfair dismissal and they aren't entitled to redundancy pay. 
 General secretary of the TUC Frances O’Grady commented: “This case has exposed once again the growing problem of sham self-employment.  Unscrupulous bosses falsely claim their workers are self-employed to get out of paying the minimum wage and providing basics like paid holidays and rest breaks.”  Oh dear!

If you’re in doubt about whether your people are genuinely self-employed, or workers, or employees, contact The Human Resource today on 07884 475303 for expert advice.   We can give you confidence that the terms and practices applying to your workers and employees are all in order - so your business doesn't become the next Pimlico Plumbers!

Thursday, 9 February 2017

Sickies vs Presenteeism

We seem to have a pattern in the UK that the first Monday in February is the single day of the year with the highest sickness absence -  and now it’s earmarked as National Sickie Day.
It’s not hard to imagine why. The fresh start to the year in January in over, we’re still paying the bills from Christmas, still getting up and coming home in the dark. Freezing temperatures and widespread ‘flu outbreaks don’t help either.  Maybe it’s easier to phone in sick and snuggle down under the duvet….
So … be ready to tackle the odd bad apple in your workforce who has the urge to skive off work on the first Monday in February – or any Monday.  A proactive approach towards absence will make sure that an absence culture doesn’t take root in your workplace, hitting morale and productivity at a time when most businesses are looking to find ways to boost future growth.  Here’s what to do:
·         Communicate a consistent policy that people phone their direct manager if they need to take time off sick, and if practical don’t accept texts and emails.  
·         If an employee doesn’t even phone in but simply fails to turn up, handle it firmly as a disciplinary matter.
·         If you’re given a reason for absence that doesn’t relate to the person’s own health, let them know clearly that it won’t be counted as sickness absence.  It would be this sort of excuse – all reported in National Sickie Day top 10 bizarre reasons lists for not turning up to work:
o   “I’ve accidentally locked myself in the bathroom and I’m having to wait until someone with a key to the house can come round to let me out.”
o   “I’ve accidentally sent my uniform to the charity shop so need to go and buy it back.”
o   “I thought it was a bank holiday today and I’m 500 miles away.”
o   From a worker in Glasgow “I missed the stop on my train this morning and can’t get off the train now until London.”
The time can either be unpaid, or even deducted from the holiday entitlement (though you should make it clear that holiday normally must be booked in advance). 
·         As an employer you’re perfectly entitled to challenge an employee’s reason for absence.  But handle it at a confidential return-to-work interview and be sensitive to the fact that people may not feel comfortable telling you about their reasons.  Perhaps they’re suffering from an illness or mental health issue that they don’t feel they can talk openly about? Perhaps they’re finding it difficult to work with their team and are switching off? Perhaps they’re working around caring responsibilities at home?

There's more advice on strategies to control absence here.

On the other side of the coin, coming into work unwell for fear of your colleagues thinking you’re pulling a sickie if you take a day off (presenteeism) seems to be even more widespread than absenteeism. And could be costing businesses even more money.
Recent UK research has found that a quarter of people have gone into work when they're too ill and should be at home.  Working on through illness could account for as much - if not more  - of a loss in productivity than sickness absence, because of errors, infecting others, irritation, lack of concentration etc. Sickness presence can also mean it takes longer for people to recover from illness.
So tackling presenteeism can reduce costs and improve productivity. Tackling the causes is a start: the report found that personal money troubles, work-related stress, worrying about redundancy and perceived pressure from managers all contribute to people coming into work despite being ill.
Finding a balance

To keep the business running successfully and productivity up, we need to strike the right balance here.  The balance between taking action against any employees taking advantage of your sick pay scheme and on the other hand, ensuring the right support is in place for those who are genuinely ill.
Happy and supported employees are less likely to be absent, and ultimately they will be more productive, committed and engaged with the business.  Skilled managers create a workplace people want, an environment where people don’t think about calling in sick unless they’re genuinely ill. How? Interesting and fulfilling work, opportunities for developing our skills and feeling included and valued are all important.
If you have a motivated and engaged workforce with a strong team spirit, every individual who can come into work will do.
We help businesses to manage sickness absence, advising on policy and individual cases.  Do you want to discuss your challenges with a professional, and walk away with a manageable action plan so you know exactly what you need to do? Give us a call today on 07884 475303 or email 


Friday, 3 February 2017

10 ridiculous (but completely real) excuses for not paying Minimum Wage

Yes, these are real excuses that business owners have given HMRC to explain why the law about minimum wage rates simply doesn’t apply to them:  
  • Her job’s too menial: “She doesn’t deserve the national minimum wage because she only makes the teas and sweeps the floors.” 
  • Do you know who I am?  “The national minimum wage doesn’t apply to my business.” 
  • I’ll pay them properly when they can do the job: “My employee is still learning so they aren’t entitled to the national minimum wage.” 
  • I have a foreign accountant: “My accountant and I speak a different language – he doesn’t understand me and that’s why he doesn’t pay my workers the correct wages.” 
  • It’s not the international minimum wage: “I thought it was okay to pay foreign workers below the national minimum wage as they aren’t British and therefore don’t have the right to be paid it.”
  • Because I’m worth it – they’re not: “It’s part of UK culture not to pay young workers for the first three months as they have to prove their ‘worth’ first.” 
  • Performance-related pay: “The employee wasn’t a good worker so I didn’t think they deserved to be paid the national minimum wage.” 
  • Yeah, but they signed on the dotted line: “I’ve got an agreement with my workers that I won’t pay them the national minimum wage; they understand and they even signed a contract to this effect.” 
  • It’s not who you are, it’s who you think you are: “My workers like to think of themselves as being self-employed and the national minimum wage doesn’t apply to people who work for themselves.”
  • Standby me: “My workers are often just on standby when there are no customers in the shop; I only pay them for when they’re actually serving someone.” 
We could provide commentary on WHY all of these bizarre excuses are completely and utterly wrong … But some things just speak for themselves.
It doesn’t matter who the business owner is, what their accounting arrangements are, whether their workers are performing at the desired level, are pieceworkers, home workers, agency workers, commission workers, part-time workers or casual workers. The fact remains that if they aren’t paying minimum wage, they’re breaking the law.
This lame excuses list has been released as part of a nationwide campaign to raise awareness among the low paid about their minimum legal wage and flag up cases of non-compliance to HMRC.  Anyone who thinks they may be paid less is being encouraged to contact ACAS as soon as possible, and every call is followed up. HMRC’s enforcement budget, used to fund the number of compliance officers investigating minimum wage complaints, is £20 million a year and will increase by another £4.3 million this April.
The consequences for your business of underpaying staff what they’re legally entitled to receive could be dire: here's more about the level of fines being imposed by HMRC.
As a refresher, the current National Living Wage for all employees aged 25 years and over is £7.20 an hour.  The National Minimum Wage rates are currently:
  • for employees aged 25 years and over £7.20 an hour
  • for 21- to 24-year-olds £6.95 an hour
  • for 18-20 year olds £5.55 an hour
  • for 16-17 year olds £4 an hour
  • for those in the first year of an apprenticeship, £3.40 an hour

The rates rise again a little in April 2017: watch this blog for an update.

Enforcement of minimum pay really has some teeth and pay rates need managing carefully to ensure the right one is applied.  Employment law can be complex, and we understand that dealing with it can be a hassle.  That’s why we’re here to help.  If you’re unsure about where you stand and what you need to do to keep your business on the straight and narrow, give us a call today at The Human Resource on 07884 475303.





Tuesday, 29 November 2016

How To Avoid Workplace Christmas Party Nightmares

It’s fair to say that the workplace Christmas party gets its fair share of bad press. From punch-ups and offensively drunk staff, through to extra-marital activities and unwanted advances, we’ve all heard the horror stories. Depending on just how cautious you like to be, you might think that you’d be better off cancelling the whole thing and saving yourself the headache.

But before you rush into anything, remember that your staff have worked hard, and they deserve an opportunity to let their hair down. A festive get-together could prove to be just what you need to show your appreciation of their efforts and boost morale. What’s important here is that you’re suitably prepared. Here’s what you need to consider…

Remind your staff of your standards
At the end of the day, your staff are adults and should know how to conduct themselves at work and in related social situations, but there’s no harm in reminding them. This is about ensuring that everyone understands what’s acceptable, and what will happen if behaviour falls below the required standards. Now could be a good time to remind your employees about what’s expected from them.

Get yourself organised
Planning is extremely important, so be sure to consider absolutely everything. From where you’ll hold the event, through to how people will get home safely at the end of the evening, through to the arrangements for being in work the next day, problems can often be avoided if you’ve considered your approach in advance.

It makes sense to get your staff involved in the planning process, to ensure that their views are taken into account and they have the option to contribute ideas.
Consider differing preferences
A night of drinking isn’t everyone’s idea of a good time, so do think about how you can make the event appeal to your diverse workforce. If you’re providing catering, consider any dietary requirements. You’re never going to be able to please everyone, especially if you have a large team, but it makes sense to consider tastes and preferences.

Finally, on this point, attendance at a Christmas party should never be mandatory, so don’t make your staff feel like they’re obliged to make an appearance.

Relax a little!
At the end of the day, your Christmas party should be fun and enjoyable, and you should be able to let your hair down and celebrate alongside your team. If you’ve covered the points that we’ve discussed here, then it’s unlikely that you’ll experience any significant problems. Your staff are probably just looking forward to having a good time, and aren’t secretly plotting to cause riots or bring your business into disrepute!

More top tips for a happy work Christmas party here.  If you’ve got concerns about this year’s Christmas party, and you’d like to take the opportunity to chat with an HR expert, pick up the phone and give us a call at The Human Resource on 07884 475303.

Tuesday, 22 November 2016

What’s so wrong with zero hours contracts?

Zero hour contracts must have attracted more adverse publicity than any other way of organising work this century. 

So, what’s the problem?  And should you stay well away from them as a good employer?

A zero hours contract means that the employer does not guarantee a set number of working hours for the employee.  Depending on the needs of the business, the worker could be asked to work full time hours some weeks and zero hours other weeks.  

This means people's income can fluctuate significantly and without a regular amount of pay they won’t be able to take out tenancies, loans, credit cards or a mortgage.  High stress level have been reported because of uncertainty about how much work there will be from one day to the next.

On the other hand, the flexibility of a zero hours contract can work well for people looking for casual part-time employment, such as students, home carers and the semi-retired.  A recent CIPD survey found that workers on zero hours contracts were as happy as permanent full-time employees: 65 % of the sample on zero hours contracts said they were either very satisfied or satisfied with their jobs, compared with 63 % for all employees.

The arrangement can help businesses cope with fluctuating demand, enable new businesses uncertain about workloads to get onto their feet, and also provide cover for unexpected sickness absence. They’re widely used by retailers, restaurants, leisure companies and hotels. The care industry is estimated to employ 160,000 workers on zero hours contracts and the NHS has increasingly adopted them.

The problem is that a few "workhouse not workplace" style large employers have exploited the vulnerability of their people on zero hours contracts, with bad practices such as giving unreasonably short notice whether or not they're required at work, and, if the individual isn’t able to come in when “asked”, firing them without notice or punishing them via the disciplinary procedure. 

Some had even forbidden their zero hours contractors from working for anyone else, so that they were more likely to be available for work at short notice: that is now completely illegal.  Zero hours contracts can’t contain exclusivity clauses prohibiting staff from seeking or accepting work from another employer and people working them can seek additional employment and have other jobs.

Even the most notorious – but by no means only – exploiter of zero hours contracts, Britain’s largest sportswear retailer Sports Direct, has now decided to offer its shop staff the option of a minimum contract of 12 hours’ work per week, in line with other retailers such as Next.

Regardless of the debate surrounding their use, zero hours contracts are here to stay as a flexible alternative to full and part time employment, one that can be useful to both employer and employee in some circumstances.

If you opt to go ahead and hire staff on zero hours contracts, you must ensure that you provide the necessary legal rights. All zero hours workers are entitled to at least the National Minimum Wage and paid annual leave, rest breaks and protection from discrimination.  Calculating holiday entitlement has to be done in arrears for each individual based on the number of hours worked, taking additional admin time.  Guidelines on employment rights for zero hours workers from ACAS here.

To help staff plan ahead, it’s best practice to give as much notice as possible regarding possible working hours, ensuring the zero hours contractor understands that they can either accept or refuse the work.

If your business needs more certainty and less to-ing and fro-ing to organise enough workers, consider the alternatives such as:
  • Offer overtime to current permanent staff
  • If regular hours need to be worked, recruit a part time employee
  • Offer annualised hours and fixed term contracts to cope with seasonal demand
  • Bring in temp agency workers as a quicker and easier way to fill gaps.
Zero hours contracts are rarely appropriate to run the core business.  Most businesses are providing a regular service or product and have a broadly predictable timetable or output, and so permanent or fixed hour contracts are likely to be a better fit.  And there's always the traditional British compromise of flexible hours contracts with a certain number of fixed hours plus the option to work additional time if required. 
If you currently operate zero hours contracts, or have considered them and would like assistance and guidance on how to use them properly, please get in touch with us at The Human Resource.


Tuesday, 15 November 2016

Flexing to keep your best employees & attract more applicants

If you want to attract and retain top quality staff - and who doesn’t? -  maybe it’s time to consider some different approaches.  For instance, is the best way to get things done really via a routine of nine-to-five every day in a single place of work?  And is there more you could do to get the very best out of your people by helping them create a happy and healthy work-life balance?

The option to work flexibly is consistently shown in research as one of the most prized benefits.  It's also the one that’s most likely to retain and motivate existing staff.  Gradually, the focus is beginning to shift away from traditional working patterns, in response to UK population trends like the rising number of working mothers in the UK, the increase in pension age, the rapidly ageing population – and the emergence of the so-called ‘sandwich generation’ where individuals are called upon to care for both their children and elderly relatives.  Modern service-based jobs are significantly different to the manufacturing jobs of the past, technology has improved and become widely available and people work differently. 

So the idea is starting to take root that there’s a connection between supporting employees’ work/life balance and retaining and attracting them, with recent research showing:
·         53% of employees would rather have flexible working over a 5% salary increase.   

·         81% look for flexible working options before joining a company, way beyond any other typical benefit such as an enhanced pension scheme (35%), private healthcare insurance (28%) or commission (28%).  Prioritising flexible working when looking for a new role is particularly true amongst parents of young children and with adult dependants. 

·         63% wanted flexible start and finish times. 

·         SME employers told a recent study that their major areas of focus in 2017 to reduce the likelihood of having to recruit new people to replace those who’ve left will be employees’ work/life balance (35 per cent) and offering more flexible working practices (21 per cent). 
Interestingly, the most significant benefit for businesses embracing flexible working is greater productivity. In a recent study 92% of employers believed that those who work flexibly are just as, if not more, productive than those who work regular hours. 
The other benefits cited were attracting and retaining top talent, a better work-life balance and happier employees. A report by Vodafone showed profits increased thanks to the practice, while Inc. reported that stress increased without flexible working, which in turn reduces profitability.  
Flexible working has a wide number of permutations: flexi-hours, term-time working, annual hour working, job-sharing, 9-day fortnight, 4.5-day weeks, on-call working, zero-hours contracts. 

For any of them to work, the business will need to trust its employees to take accountability of their own workload and time management to get things done, whether this is at 9am in the office or 9pm at home.

For expert advice on creating flexible working arrangements that work for both your business and your employees, and staying within the law if you have a flexible working request, contact The Human Resource today on 07884 475303.






Tuesday, 8 November 2016

Help! All My Staff Want Time Off Over Christmas!

So we’re quickly approaching the festive season, and everything’s going well in your business. You’ve got robust plans in place so you’re in the best possible position for maximising your profits, and you’re feeling pretty organised and in control. All of a sudden though, you’ve got a big issue on your hands. Your staff all want time off. Understandably, they want to enjoy the festivities, maybe travel long distances to visit relatives. You hadn’t planned for this though, and you’re now in a bit of a pickle.  
What should you do, and how should you approach this challenge without landing yourself in a nightmare situation?

Before we get into anything else, let’s consider where you stand in the eyes of the law. Thankfully, this is pretty clear-cut. As an employer, you have the right to determine when your staff take their leave. You can decide that you won’t accept leave requests during busier periods, including Christmas, or if it means too many people would be off at once.  So you aren’t obliged to give your workers the time off that they want.

Still though, this doesn’t mean that you should announce that everyone’s presence is required, and accept no more comments or questions on the matter. This approach will no doubt cause a great deal of unrest, and do you no favours.

The best course of action here is to ensure that you’re being fair and consistent. If everyone is being treated the same, then it’s more likely that they’ll accept that you can’t necessarily accommodate all requests.

You may decide to let your staff decide between taking holiday over Christmas or New Year, but not both. If you can’t grant leave for everyone, then you could let those who missed out that they'll have priority when it comes to booking in their dates for 2017. Be firm, but reasonable, and never forget that your staff are simply human beings who probably want to enjoy some time putting their feet up with their families.

And on a final note, provided work can be done as usual you may want to consider offering your staff the option to work from home. If you can still meet your operational requirements, then this could prove to be a good compromise.

By now, you probably recognise that conflict over holiday requests during the Christmas period could have largely been avoided if you’d only anticipated these issues in advance. It’s much easier to manage holiday requests if you’re specific with people well in advance about requests you can accept and those you can’t – and why! Maybe this is a wake-up call to get your ducks in a row for the year ahead.

If you want to speak with an expert about how to manage your HR planning and communicate your policies, get in touch with us at The Human Resource today on We’ll have an initial no-obligation chat about your circumstances, and we’ll establish if we’re a good fit to work together. 
Download our free E-book on managing holiday requests here.