Why do I need HR?

As a small business you might ask ‘why do I need HR?’ if you have a small headcount and everything seems to be going well.  An HR Consultant is often engaged to support and advise when there are employee related issues or problems. That might be a situation involving redundancy, a disciplinary, grievance or dismissal.  Of course, ensuring that these situations are dealt with correctly is very important.  We do our job, help you to resolve the issue and that’s that.  All good.  But there IS more to HR than troubleshooting of this kind, and it’s important even (or I would argue especially) for small businesses. The way your people are managed will have a direct impact on their success, and by implication the the success of your business.  In a small business where the headcount is under 50, each employee has a greater proportional impact on the working environment, the team, the success of the business and how well it functions.

What do I need to know about HR?

The Chartered Institute for Personnel and Development (CIPD), states that Human Resources Management (HRM) is:

“…the function within an organisation that focuses on the recruitment, management, and direction of the people who work in the organisation. HRM can also be performed by line managers.”

There are multiple stages in an employment relationship, some of which are included in the definition above.  If we look at this in more detail, the stages are:

Employees experience these activities during their journey with you, their employer. But you won’t positively impact the success of your people and your business without considering the ‘how’ in each of these areas. Let’s look at each stage in more detail:

Attraction

What skills, knowledge and experience do you need, and how will you attract these people in a competitive recruitment market?

Recruitment

What are your recruitment methods, and do they successfully identify if the candidates have the skills, knowledge and experience you need?  How many of your new starters leave before they finish their probationary period with you?

Onboarding

How can you ensure effective onboarding of someone into their job and the company, enabling them to become productive quickly and begin making a positive impact on your business?

Development

How do you develop your onboarded employees? What development and progression can you provide so that your people become better and better at their jobs and become the experts, managers or leaders of the future?  Or do people leave to get that development and progression?

Retention

How do you treat your employees while they’re with you? What can you offer them that will keep them loyal and engaged?  Or might they always be on the lookout for the next opportunity elsewhere?  How do you make sure you keep all the knowledge, skill and experience you have supported and developed from walking out of the door, reducing your ROI, and increasing your costs?

Separation

How do you treat leavers? Does that change depending on whether they’re a voluntary or involuntary leaver? What do your current employee population observe when others leave, and does that process feel dignified, respectful and make them feel glad they still work there?  Could your leavers be employees of the future, once they’ve gained other experiences, and would they want to return to you?

And the cycle continues…..

What should I do?

In short, the first stage would be to look at what you currently do.  Ask yourself and selected others 5(ish!) key questions:

  1. Are your people processes efficient and effective for the business and your people?
  2. What kinds of experiences do your employees have at the various stages of the employee lifecycle?
  3. What kinds of behaviours do you value? Do you see these demonstrated by your managers and employees consistently in their interactions with each other?
  4. What kind of employer do you want to be?  How does that link in with your brand marketing and PR?
  5. How high is your employee turnover? How successful are your attempts to recruit new talent?

This is just the start of the process, and it will lead to further conversations and questions, no doubt.  Maybe this next year is the year you start to take a strategic approach to your people management practices?

If you’re asking yourself “Why do I need HR?” and you’d like more information, or if you would like support to look at any or all of these areas to make your business even more successful, get in touch.

Employment legislation changes – April 2023 and beyond

As an employer it’s important to know of any forthcoming employment law changes. Being aware of the changes ensures you can prepare for them and protect your business from any legal claims. Here’s a rundown of the changes taking effect from April 2023.

Payroll costs – National Minimum Wage rates

The cost of living increase continues to be a key issue for many employers who are facing pressure to increase wages.

Whilst there is no legal requirement to increase pay to address issues with high inflation rates, the National Minimum Wage/living rates are going up on 1 April 2023, therefore if your pay is based on minimum wage rates, you will need to implement these changes:

Age group​ Up to 31/3/2023 From 1/4/2023 % Increase​
23 and over​ £9.50 £10.42 9.7%
21 or 22​ £9.18 £​10.18 10.9%
18 – 20​ £6.83 £7.49 9.7%
16-17 £4.81 £5.28 9.7%
Apprentices under 19 (or over 19 but in year 1 of apprenticeship​) £4.381 £5.28 9.7%
Statutory pay rates
Family friendly leave

From 3 April 2023 Statutory Maternity, Adoption, Paternity, Shared Parental and Parental Bereavement pay will increase to £172.48 per week.

Statutory Sick pay

On 3 April 2023 Statutory Sick Pay will increase to £109.40 per week.

Statutory redundancy payments

With effect from 6th April 2023, the statutory redundancy pay cap increases to £643 per week, therefore for anyone who leaves due to redundancy on or after this date, you will need to calculate their redundancy pay on this new rate.  If the redundant employee’s normal weekly rate is under this figure, you should calculate their redundancy compensation based on their actual weekly pay rate.

Bank holidays – The King’s Coronation

In 2023 there will be an additional Bank Holiday to celebrate the King’s Coronation, on Monday 8th May 2023. This is in addition to the usual May Day Bank Holiday on 1st May, and the Spring Bank Holiday on Monday 29th May 2023.

An employee’s individual contract of employment will dictate whether they are entitled to take this additional day off and how this day’s leave will be treated.  Employers should check the wording in their employees’ contracts, and communicate clearly to employees if they are expected to work on the additional bank holiday, and / or if they need to take it from their annual leave entitlement.

Upcoming changes to be confirmed

2023 is potentially going to be a busy year for changes in employment law, with lots of Bills under consideration.  This is a summary of what may be in the pipeline.  There are no firm dates for implementation, but in the meantime it pays to be ahead of the changes and consider how they may affect you and your business in advance of the bills being passed in to law.

Retained EU Law (Revocation and Reform) Bill

During her brief time as Conservative Prime Minister, Liz Truss expressed the Party’s commitment to change Working Time Regulations’ rules on taking breaks, limiting the 48-hour working week and calculating holiday pay. In addition, the government introduced the Retained EU Law (Revocation and Reform) Bill which, if passed unamended, will remove all UK laws containing EU law by the end of 2023. In addition it will give the government powers to repeal or replace those laws without Parliamentary scrutiny. As well as the working time rules, the TUPE and the agency workers regulations may be at the top of a possible list for reform, due the fact that these laws derive directly from EU regulations.

Anti-strike policies

Conservative proposals for restricting the effect of industrial action were outlined by the the previous Secretary of State for Transport, Grant Shapps in July 2022. Consequently, some anti-strike measures are already passing or have passed into law, such as the Strikes (Minimum Service Levels) Bill and Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022 which allow organisations to use agency workers to cover striking workers.

However, the Regulatory Policy Committee have stated the Strikes Bill is ‘not fit for purpose’ and subsequently have suggested another impact assessment is needed. In addition, the TUC has mounted a legal challenge to the agency worker rule change, which is due to be heard in March 2023.

The Carer’s Leave Bill

The Carer’s Leave Bill will give carers one week’s unpaid leave a year to care for a dependant with a long-term care need that is:

  • likely to last more than three months;
  • is a disability under the Equality Act 2010; and/or
  • connected to old age.

This will be a day one right for employees.

Many organisations already support carers and have policies in place, however this will involve changes to flexible working policies and practices, therefore communicating any changes relating to flexible working requests and requests for carer leave to managers will be very important, to ensure any speculative enquiries are dealt with appropriately.

The Protection from Redundancy (Pregnancy and Family Leave) Bill 

This bill extends the right to be redeployed during pregnancy (including miscarriage), maternity and family leave for 18 months after the start of that leave. These are important considerations that will have to be managed during an employee’s family/maternity leave and in restructuring or redundancy exercises.

Neonatal Care (Leave and Pay) Bill

The Neonatal Care (Leave and Pay) Bill will allow parents whose babies need hospital neonatal care to take 12 weeks’ paid leave in addition to their statutory maternity or paternity leave. The right will:

  • be available from day one of employment;
  • apply to parents with babies who are admitted to hospital before they are 28 days old;
  • apply to babies who need to stay in hospital for 7 days continuously or more.
Employment (Allocation of Tips) Bill

This bill will make it unlawful for employers to withhold tips from staff.  A new statutory Code of Practice on how tips should be distributed will be developed, and in addition workers will gain a new right to request information on an employer’s tipping record to help them to bring a tribunal claim under the new rules.

Employment Relations (Flexible Working) Bill

This new legislation would:

  • make flexible working requests a day one right for employees (thereby removing the current 26 weeks’ service requirement)
  • allow employees to make two requests a year (currently only one request is possible)
  • require employers to consult with the employee, before rejecting a request
  • shorten the time employers have to reply to a request from three to two months
  • remove the requirement for employees to set out the likely effects on the business of the change.
Workers (Predictable Terms and Conditions) Bill

This bill will give all employees and workers (including agency and zero hours workers) the right to formally request a more stable working pattern and will be available to those who:

  • have worked for the employer for 26 weeks (not necessarily continuously)
  • are on work patterns that lack certainty in the hours and time they work
  • are on fixed term contracts under 12 months’ in duration.

Workers will be able to make two requests a year, however employers will be able to refuse requests on specific grounds, e.g. due to the additional costs involved or a lack of work at the times requested.  This reform is intended to rectify one-sided flexibility favouring employers to the detriment of workers.

Office of the Whistleblower

A Bill on whistleblowing could, if passed, repeal the current framework in the Public Interest Disclosure Act 1998 and introduce broader protection with a bigger range of penalties. The bill involves the creation of a new body, potentially called the Office of the Whistleblower, which would be given investigation powers and have the authority to order redress.

Auto-Enrolment Pension Changes 

There is an Automatic Enrolment Private Members Bill moving through Parliament which looks set to bring in changes to the Automatic Enrolment populations and employers who use Qualifying Earnings to calculate contributions:

  • Lowering the age criteria for auto-enrolment from 22 to 18 years of age
  • Removing the Lower Earnings Limit of £6,240 if you’re using qualifying earnings

Predictions are that this particular change will come in to effect either in April 2024, or at the earliest in October 2023.

And….

The government is also backing the Worker Protection (Amendment of Equality Act 2010) Bill currently passing through Parliament, which would cover the following:

  • reintroducing employers’ liability for the harassment of their staff by third-parties (whether they are customers, clients, or suppliers). This liability was previously removed in 2013;
  • requiring employers to proactively prevent the sexual harassment of their staff;
  • allowing for a 25% uplift in any award in a successful sexual harassment tribunal claim where the employer failed to prevent the harassment occurring.
If you’re concerned about what these employment law changes mean for your business and need help in preparing for them, please get in touch with Helpful HR.

 

 

Employment legislation changes – April 2022

As an employer it’s important to know of any forthcoming employment law changes. Being aware of the changes ensures you can prepare for them and protect your business from any legal claims. Here’s a rundown of the changes taking effect from April 2022.

Gender pay gap reporting

For businesses in the private sector with a headcount of 250 or more, your ‘snapshot’  gender pay gap reporting is due to be published on or before 4th April 2022.  The information about what you need to report can be found here.

There is currently speculation about the introduction of new ethnicity pay gap reporting, but there are no clear plans to introduce that requirement.

Payroll costs – National Minimum Wage rates

The cost of living increase is likely to be a key issue for many employers who will face increasing pressure from employees to increase wages.

Whilst there is no legal requirement to increase pay to address issues with increases in inflation rates, National Minimum Wage/living rates are going up on 1 April 2022 so if your pay is based on minimum wage rates, you will need to implement these changes:

Age group​ Up to 31/3/2022 From 1/4/2022 % Increase​
23 and over​ £8.91​ £9.50​ 6.62​
21 or 22​ £8.36​ £9.18​ 9.81​
18 – 20​ £6.56​ £6.83​ 4.12​
Under 18 (but above compulsory school age​) £4.62​ £4.81​ 4.11​
Apprentices under 19 (or over 19 but in year 1 of apprenticeship​) £4.30​ £4.81​ 11.86​
Health and Social Care Levy – 6 April 2022

The UK is introducing a new social care levy  from 6 April 2022 to help fund health and social care. This will be collected via a 1.25% increase in National Insurance rates for employers and employees in 2022.

People above State Pension age will not be affected by the temporary increase to National Insurance contributions for the 2022 to 2023 tax year, but will be liable to pay the levy from April 2023.

Statutory pay rates
Family friendly leave

From 3 April 2022 Statutory Maternity, Adoption,  Paternity, Shared Parental and parental bereavement pay will increase to £156.66 per week.

Statutory Sick pay

On 6 April 2022 Statutory Sick Pay will increase to £99.35 per week.

Statutory redundancy payments

For anyone made redundant on or after 6th April 2022, the statutory redundancy pay weekly pay rate increases to £571, therefore for anyone who leaves due to redundancy on or after 6th April 2022 you will need to base their redundancy pay on this new weekly cap.  If the redundant employee’s normal weekly rate is under this figure, you should calculate their redundancy compensation based on their actual weekly pay rate.

Right to work checks

Although the concept of right to work checks is not new, there are changes to be aware of which come in to effect from 6th April 2022.  Full guidance is here

Key changes include:

  • implementation of a new Identity Document Validation Technology (IDVT) process,
  • changes for those that hold a Biometric Residence Card, Biometric Residence Permit or Frontier Worker Permit.
Bank holidays – The Queen’s Jubilee

In 2022 there will be an additional Bank Holiday to celebrate the Queen’s Platinum Jubilee on Friday 3rd June. The usual late May bank holiday has moved to Thursday 2 June to give workers a four-day weekend.

Individual contracts of employment will dictate whether employees are entitled to take this additional day off, and how this day’s leave will be treated.  Employers should check the wording in contracts and communicate clearly to employees whether they are expected to work on the additional bank holiday, and / or if they need to take it from their annual leave entitlement.

As the Jubilee week is to all intents and purposes a 3-day week and is at school half-term in most places, employers should prepare for a large number of annual leave requests.

If you’re concerned about what these employment law changes mean for your business and need help in preparing for them, please get in touch with Helpful HR.

 

 

Getting redundancies right

In a tough economic environment employers may conclude they need to reduce headcount and make some redundancies.

If that’s the case, there’s a statutory process to follow before making people redundant. It’s important to get the process right to avoid unnecessary disputes or Employment Tribunal claims for unfair dismissal.

Here are some key points to remember if you think you need to make redundancies.

Make sure it’s a genuine redundancy

Redundancy is about the role, not the person. The redundancy process should never be used to dismiss a specific employee in place of performance management and a disciplinary process. A redundancy is only genuine if it fits within one of the following descriptions:

    • the employer ceases to carry on the business in which the employee was employed,
    • the employer ceases to carry on that business in the place where the employee was employed,
    • the needs of the business for employees to carry out work of a particular kind cease or diminish, or
    • the needs of the business for employees to carry out work of a particular kind in the place where the employee was employed cease or diminish.
Preparation is key

Once you have established the reason for the redundancy of a role, prepare some notes for the consultation process. These notes should include key information you need to communicate:

    • why you need to make redundancies,
    • which jobs are at risk,
    • how employees will be selected for redundancy,
    • the number of people who could be involved,
    • how you plan to carry out redundancies,
    • how redundancy pay will be calculated and
    • details of any agency workers at the company
Fulfil your obligations

Establish the timeframes within which you need to consult and whether you need to consult a trade union, or elected representatives. If you plan to make more than 20 people redundant within 90 days you will need to do collective consultation, so it’s important to know your obligations.

Plan for the process

Prepare your notes and make sure you know the timeframes and consultation requirements. It can then be helpful to create a communication plan for the consultation process. The plan should include details of the consultation with potentially redundant employees as well as other team members who may be affected by the changes.

Make proposals

When the consultation is complete, a redundancy can be confirmed. True consultation involves listening to alternative ideas to avoid redundancies, considering any contractor or agency worker roles instead and redeployment opportunities within the company. It’s also important to ensure the affected employees fully understand the reasons for the consultation and what it means for them specifically. Prior to consultation being completed any redundancy plans should be presented as proposals, subject to consultation.

 

If you’re making large-scale redundancies, it can result in a long and complex process, but whether it affects one employee or 50, it’s still important to get it right and consider their rights and how the news will affect them. Good planning and communication is key.

We work with businesses during difficult times and help to take away the worries about getting it wrong, so if you’re business needs to make these difficult decisions, get in touch with Helpful HR.