Pension auto enrolment looms large for all companies in the coming years and agency workers will be affected by it as well. Recruitment agencies will therefore be caught in the auto enrolment process leading to increased costs which may or may not be passed onto their clients.In this blog we look at pension auto enrolment and agency workers.
Recruitment agencies must carefully manage opt outs and efficiently implement the auto enrolment process. This could be difficult due to the transient nature of agency workers, therefore, it is important to have good systems in place.
Agency workers who are eligible job holders, subject to age and earnings criteria, must be auto enrolled. They are called this because they are ‘eligible’ for automatic enrolment. These are workers who:
• are aged between 22 and state pension age
• are working or ordinarily work in the UK under their contract
• have qualifying earnings payable by the employer in the
relevant pay reference period that are above the earnings
trigger for automatic enrolment (currently £9440 in tax year 2013/14)
Non eligible jobholders and entitled workers need not be auto enrolled unless they request it in writing. Only the truly self employed need not be auto enrolled.
The obligation to provide the pension lies with the “employer” for the purposes of the
worker’s contract. In the absence of a worker’s contract, the obligation to provide the
pension lies with whichever party is responsible for paying the agency worker or who actually does the pay worker. Therefore this would mean the recruitment agency is required to provide the pension.
The pension can be a private pension, provided it meets the Pension Regulator assessment test, NEST – the government pension scheme or the Peoples Pension, an alternative that has been set up primarily to meet the needs of pension auto enrolment.
Initially, minimum contributions of 1% from both the agency worker and the employer are required based on qualifying earnings which includes salary, wages, commission, bonuses, overtime, statutory sick pay, statutory maternity pay, ordinary or additional statutory paternity pay and statutory adoption pay.
Basic salary would be a good starting point. This will include any commission, bonuses, overtime or similar payments and any shift premium pay.
Contributions shall rise to 3% for employee and 2% for employer from October 2017 and 5% for employee and 4% for employer from October 2018.
Recruitment agencies will have to auto enrol both their own employees as well as agency workers, where appropriate.
It is possible to postpone auto enrolment for three months. This would give the recruitment agency time to decide whether the agency worker will be given continued work. If the agency worker leaves during the three months, then pension auto enrolment is not necessary. It will be important for agencies to keep track of their agency workers and record earnings information in order to be able to work out pension auto enrolment requirements at the end of the three months if the worker remains with the recruitment agency. This will place an increased admin burden on recruitment agencies that is why an effective system is needed.
It could be argued that many agency workers will opt out of pension auto enrolment due to the low wages many receive and the requirement to have work for only a short period of time. However, it is illegal for any employer to encourage opt out of pension auto enrolment. The decision must be that of the agency worker themselves without due influence or enforcement.
The time and cost of preparation for auto enrolment can be significant so recruitment agencies should check their staging date (http://www.sjbealehrconsult.co.uk/pdfs/Staging%20Dates%20-%20Pension%20Auto%20enrolment.pdf). The staging date might seem very far away, but it will soon come round. Recruitment agencies that do not comply will face heavy fines. Planing ahead is therefore vital.
Sickness absence costs the UK millions each year. Managing sickness absence can be challenging and needs employer commitment to tackling the issue. Here we provide some effective sickness absence management tools which are essential in the battle against sickness absence.
If you don’t measure sickness how do you know you’ve got a problem. Of course if you are a small business with only a handful of employees the effect of one of your employees being sick will be obvious. Apart from the cost there will be lost productivity and possibly low morale on the employees holding the fort. However, if you are a larger business with a lot more employees the effect of sickness absence might not be so clear.
An HR information system can be a huge bonus in measuring sickness absence. Based on the inputted data from sick days reports can be produced for discussion at senior management team meetings. Here problematic members of staff can be highlighted and dealt with appropriately, whether it is regular intermittent absence or long term sickness. The main point to remember is that sickness absence management needs to be dealt with. There should also be a sickness absence procedure in place that gives clear guidelines as to how sickness absence will be dealt with.
Employees who are off sick should be required to phone into their line manager on the first day of sickness within one hour of their shift. They should personally phone in and should not be allowed to text or send an email. If the sickness absence continues the line manager should stay in touch with the employee to monitor progress. The employee should be phoning in on a regular basis or the line manager should phone the employee.
On the employee’s return to work, a return to work interview should be conducted by the line manager to check the employee is ok to return, to discuss what has happened whilst the employee has been off work and to ensure they take responsibility for their attendance at work.
If the employee fails to return to work you should consider getting an occupational health assessment to help you manage the situation. This may mean implementing some work place adjustments to allow the employee to return to work. When they are ready to return to work, you need to agree a return to work place then coordinate that process.
Garden leave, or gardening leave, is leave that an employer imposes on an employee so that they remain at home on full pay and contractual benefits till the end of their notice period. The employee should be always available for work. All terms and conditions of employment apply on garden leave. It is usually instigated when an employee has resigned or the employer has terminated employment giving notice. Here we provide some tips on how to manage garden leave.
The practice of garden leave can help prevent an employee doing damage to an organisation when their employment is ending. They may have access to sensitive or confidential material that needs protecting. They may also have access to customers. Contact with colleagues might cause problems. Removing an employee from the workplace will prevent damage being done if they are aggrieved. Garden leave is often used in disciplinary situations whilst an investigation is being completed or when managing redundancy.
The term garden leave came from the British Civil Service where employees had the right to leave for exceptional circumstances.
During garden leave an employee must not work for another employer and may be required to return to work. They can also be assigned duties that are not usually carried out by them.
An employer must provide specific written instructions to the employee about what they can and can not do during garden leave.
In order to send an employee home on garden leave, there must be an express clause in the employment contract or a policy in the employee handbook. If there is no provision for garden leave in employment documents and it is imposed on an employee, there is a small risk of breach of contract. The clause can be linked to a restrictive covenant to prevent an employee working with a competitor or setting up in competition.
In a recent episode of Stella, http://www.sky.com/tv/show/stella the new next door neighbour took his dog to work. I have visited some clients who have had dogs on their premises both inside and out and it has got me thinking about having pets at work and the considerations for employers. In most cases it would be situations where the pet of choice to be taken to work would be a dog but sometimes it can be a cat or other animal. In some ways it solves the problem of leaving the pet at home in solitary confinement, but it can cause other issues.
Let’s face it, most employers wouldn’t tolerate an employee bringing a pet to work, but there are certain circumstances where it would be beneficial.
An example that immediately springs to mind is where a blind employee has a guide dog. It would be discriminatory for an employer to ban the dog from the workplace and relaxing any rules would be a reasonable adjustment.
Many stray cats take up residence on commercial premises and even Downing Street has its own cat called Larry (which apparently has a Twitter account https://twitter.com/DowningStCat) brought in to kill mice in the parliamentary buildings.
Research done in the US a few years ago showed that employees who are able to take a dog to work are less stressed and their colleagues, who may not have a dog of their own, may benefit. The research found that morale and commitment to work all increased over the week that the dogs were at work.
Since 1996 Take Your Dog To Work Day has existed in the UK and takes place every year http://en.wikipedia.org/wiki/Take_Your_Dog_to_Work_Day . Before allowing pets at work there are issues to consider however.
Allergies might be of concern. I once had to provide advice to a client where an employee had submitted a grievance with an allegation that the MD’s dog roaming the offices was causing him breathing problems. I did advise that an occupational health report was recommended to confirm the health situation and whether the employee was classed as disabled. In the meantime I advised that the dog should remain outside the offices. To prevent the allergies from becoming a problem dogs should be banned from communal social areas and in particular the canteen for obvious hygiene purposes. Dogs are not as welcome in the UK as they are in France.
Some people are afraid of dogs so it would not be fair for them to be faced with their colleague’s dog in their vicinity without guidelines about at least keeping the animal on a lead.
Some dogs can be aggressive, therefore only well behaved dogs should be allowed into work. They should not be allowed to show any aggressive tendencies otherwise they should be banned.
To prevent any issues arising and for harmonious co-existence there should be a clear pets at work policy. If you need such a policy let us know.
The current tube strike is causing absolute mayhem in the City of London rippling out across the access the underground in order to return home after a long working day. The strike is set to continue it seems with more days planned next week. In the South West the miles of floods is preventing employees getting to work. So what can employers do when employees travel is disrupted?
For employees who are able to work from home it might be prudent for an employer to sanction this until the disruptive circumstances have disappeared. Technology these days makes home working ideal due the internet, telephone and web conferencing.
An employer needs to be flexible. Implementing flexible working with staggered working hours could allow an employee to eventually get into work and complete the working day. Also there may be employees who could cover who those who can not make it into work.
Staff should be encouraged to attend work wherever possible with a suggestion that they begin their journeys early to minimise any lateness. If an employee has been affected by a school closure the time off for dependents’ legislation will allow them to take a couple of days off unpaid.
Employees do not necessarily get paid if they can not make it into work. An employer can ask them to take holiday with appropriate notice. There needs to be clear contractual clauses which cover such a situation. If the premises needs to be closed by the employer, it is an implied term of the contract that an employer will provide work and if they are unable to due to closure the employee should be compensated otherwise the employer is in breach of contract.
It is important to plan ahead for any possible disruption with a business continuity plan that includes HR management. Employment contracts and employee handbooks should include all rights in relation to travel disruption.
Zero hours contracts have been in the news stirring up a controversy in recent months due to misuse by some rogue employers so much so that the Vince Cable will be looking at them very closely. A consultation process has been launched https://www.gov.uk/government/consultations/zero-hours-employment-contracts. Zero hours contracts have been in place for many years without much trouble, but since the recession they have been used increasingly creating job uncertainty for many and low pay conditions. They are ideal for students and individuals who are only seeking occasional work, but not ideal for individuals with heavy financial responsibilities such as a mortgage. Zero hours contracts do have many benefits for employers allowing a flexible workforce that can grow or diminish according to workload demands. Here we list ten top tips for zero hours contracts.
1. Use zero hours contracts reasonably. They are ideal to flex your workforce when workloads have peaks and troughs and there is not a constant need for certain members of staff. Having a pool of workers to call upon is ideal. Any who regularly refuse work should be removed from the company’s books.
2. Zero hours contracts should not be given to staff who you use on a very regular basis otherwise the staff could claim enhanced employment rights. Pulling different employees from the pool is best so that the working arrangement is very ad hoc. Employees who are used regularly might be best suited on a fixed term, annualised hours or part time contract.
3. If you decide at the last minute you don’t need to call an employee on a zero hours contract into work, if you have already pre-arranged that they will work you should pay them. The CIPD recommend as a minimum paying their travel expenses and one hours pay as compensation.
4. Ensure you provide staff on zero hours contracts with written employment terms and conditions which is required by the Employment Rights Act 1996. The terms and conditions should be reviewed on an annual basis to ensure that the zero hours contract still reflects the actual working relationship.
5. Do not impose any restriction on staff with zero hours contracts so that they are free to work for other employers. Therefore remove any exclusivity clauses.in employment terms and conditions. Zero hours staff should also not be on call without pay or the offer of work.
6. Consider providing comparable rates of pay to staff on zero hours contracts with those on other types of contract. Whilst this is not essential there is an outside change you might have to justify any wage disparity should this be challenged in an employment tribunal.
7. Ensure staff on zero hours contracts are aware of your company’s employee handbook and HR policies and that they know they should comply with them.
8. Train your line managers in the operation of zero hours contracts to ensure they are managing zero hours staff in accordance with employment law and shifts are issued appropriately.
9. Keep careful records of zero hours staff working hours to ensure they receive the correct amount of accrued holiday pay. Holiday pay can be paid on a quarterly basis. If rolled up holiday pay is used instead it must be clearly shown in the employment terms and conditions (how it is calculated) and in wage slips.
10. Manage the working hours of zero hours staff well by distributing work. Zero hours staff are not entitled to SSP or maternity pay if they are only allowed to work on an ad hoc basis. It is therefore lawful that they do not accrue these employment rights on a correctly used zero hours contract.
Today, the first Monday in February, is traditionally known as National Sickie Day as on this day the greatest number of employees phone in sick. Last year over 350,000 employees did so. With the consistently grey and wet weather that does nothing to lift the spirits many people will feel like having a day off to lengthen their weekend.
Sickness absence in the UK costs employers millions of pounds and needs to be tackled. The costs can include sick pay, salaries, lost overtime, reduced service and lost business.
Many employees are allowed to email or text their bosses that they are not coming into work due to sickness. Sickness absence policies should clearly state that the employee should phone in and speak to their manager within an hour of their shift starting and should not text or email The employee should not be allowed to let someone else phone in for them. The idea behind this, is that if someone is swinging the lead they might feel embarrassed to speak to their manager and tell a lie about their situation. Hopefully they will think twice about calling in sick.
Research done by ELAS last year highlighted a number of odd excuses for sickness absence:
- A worker called to say he couldn’t come in because his girlfriend’s sister was having a baby. A follow up call by the employer to verify this revealed that there was no girlfriend (and therefore no sister or baby)
- A woman called to say she couldn’t come in because she had been play fighting with her boyfriend and hurt her finger as a result
- A worker called to say they couldn’t make it to work that day because their car exhaust has fallen off on the driveway
- One man said he only had one pair of work trousers and that they were wet because his mum has washed them, so he couldn’t make it into the office
- Another person said they needed new tyres on their car and it would otherwise be illegal for them to drive to work
- One person said they couldn’t afford to put petrol in their car to get to work
- One person said the weather was too bad to cycle to work while another said they were too tired to cycle to work
- One employee took a leave of absence after saying his grandfather had died. The company’s HR manager knew the family and bumped into the grandfather, who was very much alive and well, at the supermarket. The worker was dismissed as a result
It is important to do return to work interviews when the employee comes back. The employer can then check that the employee is ok following their absence and there are no lingering problems. The employer should then discuss any work issues that have occurred whilst the employee has been off sick then clearly make sure they know they have to take responsibility for their attendance.
If the sickness absence problem continues employers should consider taking formal action and use an occupational health advisor support to manage the issue.