Monthly Archives: November 2013

Living Wage in the News

This week is Living Wage week (4-10 November) – and the living wage is being promoted in the news.  The economy is on the up so we are told.  There are more people in jobs and the economy is growing, but at what cost?  The media reports the number of people in the UK who are paid less than a living wage are increasing whilst the economy is recovering.  The living wage is based on the amount of money an individual needs to have a basic standard of living and cover basic living costs. .

It is not a legally enforceable level of pay, however, unlike the national minimum wage that rises annually every October set by the Chancellor of the Exchequer and enforceable by HMRC.  The living wage is currently calculated by the Centre for Research in Social Policy at Loughborough University, while the London living wage has been calculated by the Greater London Authority since 2005.  For London it is set as £8.80 per hour and in the rest of the UK £7.65 per hour as of 4 November 2013.  The living wage is higher in London because it is the most expensive place to live in the UK.  The Living Wage Foundation promotes the rate which compared to the national minimum wage which currently is £6.31 for adults and £5.03 for those aged 18-21.

Ed Milliband is keen on implementing the living wage and has just announced that if Labour get into power he will introduce a tax break to employers who implement it.

Very few employers use it as a benchmark, but so far this year 432 employers have signed up to the living wage.  Whilst many employers pay more than the living wage many pay much less. KPMG have revealed that 21% of the working population do not earn enough to make ends meet.   Those workers who suffer are part timers, women and young people under 21.  27% of women for example are paid less than the living wage compared to 16% of men.  Workers in the private sector are more likely to be affected.

Data compiled by the Office of National Statistics for 2012 shows that median weekly earnings before tax were £506 in the year to April 2012. Men earned £546 a week, while women earned £449.  Median annual earnings were £26,500.  However, there was substantial variation across the UK with the highest median weekly earnings in London, at £653 and the lowest were in Wales, at £453.

Progress to get pay above the  national minimum wage has been slow but now there is more campaigning about the living wage because low pay has been an issue for years.

For more details on the living wage: http://www.livingwage.org.uk/

 

 

 

 

Penalties for Employers Who Lose At Employment Tribunal

The government has recently announced that from April 2014 there will be penalties for employers who lose at employment tribunal.  This change is part of the reform of the employment tribunal system in accordance with the The Enterprise and Regulatory Reform Act 2013.  The penalty will be paid to  the Secretary of State with a minimum of £100 and a maximum of £5000.  A penalty can be awarded against an employer even if the employee has not been successful in their claim and is separate to financial compensation to an employee who is successful.

The tribunal will have the power to make an order where the employer’s breach has ‘one or more aggravating features’ (a term which is not further defined in the legislation) or where the employer’s breach involves unreasonable behaviour (for example where there has been negligence or malice involved).

The Tribunal can take into account the employer’s size and resource, the duration of the breach of the employment right and the behaviour of both the employer and employee. If a financial award is awarded at Tribunal, then the financial penalty must be 50% of the amount of the award.  If the employer pays the penalty within 21 days they will get a 50% discount. 

Multiple claims in respect of the same act and the same workers are treated as a single claim. 

A  tribunal cannot review an order to pay a penalty if they subsequently award compensation for failure to comply with a Tribunal recommendation or reinstatement or re-engagement order.