New Year, new laws – upcoming changes in 2020

As 2019 draws to a close, here are some key developments to be aware of next year.

CEO pay ratio reporting

From 1 January 2020, UK listed companies who have in a year, on average more than 250 employees are expected to compare their CEO’s most recent remuneration against that of their full time-employees. 

Statement of main terms (SMTs)

The provision of SMTs will become a day one right for employees and workers from 6 April 2020. They will also need to contain additional details for the first time, including entitlement to family friendly leave, clarification of any probationary periods and confirmation of which specific days and times individuals are required to work.

Extension of holiday pay reference period

The holiday pay reference period, which is used to calculate the average pay of those who work irregular hours, will be extended from 12 to 52 weeks from April 2020. It will be important for organisations to keep track of employees’ working time throughout the year, including overtime, to ensure they are correctly remunerated whilst on annual leave.

End of Swedish derogation contracts

Organisations will no longer be able to make use of Swedish derogation contracts from 6 April 2020 as these contracts, which allow employers to avoid providing agency workers with equal pay after 12 weeks’ of an assignment, will become unlawful. 

Agency Workers ‘Key facts’ page

From 6 April 2020, agency work-seekers will have a right to receive a key information document to help them make informed choices about the work they accept. This document is required to clarify specific matters including the type of contract the worker is employed under and their minimum rate of pay.

Increase to minimum wage

As national minimum wage (NMW) rates are reviewed each year, it is reasonable to expect an increase to the existing rates in April 2020. The government has previously pledged to ensure those aged 25 and over will be entitled to a minimum of £10.50 per hour by 2024.  

Parental bereavement leave

The right to parental bereavement leave will also become effective in April 2020. Although no exact date has been confirmed, we know that qualifying parents will be entitled to two weeks of paid bereavement leave following the death of a child under the age of 18.

Government pledges

Although there have been no fixed implementation dates, the government have pledged to improve redundancy protection for working mothers and alter existing legislation around the use of non-disclosure agreements. We are also expecting the results of separate consultations on preventing sexual harassment as well as restructuring the availability of family friendly entitlements and statutory sick pay. However, it is worth remembering that much of this will depend on the new Conservative majority in government.

Christmas bonuses: key things to remember

With Christmas almost upon us, organisations may wonder if they are under a duty to pay out a bonus to staff.

The issue of pay is typically a sensitive topic in the workplace and this tends to be the case even more around the notoriously expensive Christmas period. Christmas bonuses can be a successful strategy to improve employee engagement, keep morale high or even attract the most talented applicants for a particular position. As giving employees a bonus can be a great way to reward them for their work over the past year, this frequent practice can turn into a tradition which the workforce comes to expect.  That said, the size of an organisation or current profit levels may make paying a bonus difficult for some.

The first thing an organisation should establish is whether they are under any duty to provide such a bonus. Fundamentally, there is no statutory requirement to pay staff a bonus at any time. However, if bonuses are a contractual benefit included in the terms and conditions of employment or in the employee handbook, then employees will have an expectation of the payments and management are under a legal obligation to pay it. Non-payment in this situation could result in a claim for breach of contract.

Much will depend upon the wording of the contract. Many organisations choose to include a clause which reserves the right to withhold any bonus if they see fit. This will help to prevent it being considered ‘mandatory’. Nonetheless, they should still be cautious. If they have paid a Christmas bonus to all their staff for a number of years without any changes or interruptions, adjustment of the practice can give employees a ground to make a claim. In an event such as that, an employee can claim that the annual payment has transformed into a custom or tradition through the consistent conduct of the organisation.

It is advisable for all bonuses to be marked as discretionary within contracts and the employee handbook. As an extra precaution against potential claims, employees should be given advanced notice as to whether the criteria is going to be met for them to claim their bonus. For example, if it was a condition to hit a pre-determined sales level and this has not happened, then it need not be paid. By providing advanced notice, this can also serve as an incentive to staff to improve upon their current productivity levels.

It is always important that, even if a bonus is to be paid, it is fairly calculated. Organisations should have a fair and reasonable criteria to refer to in order to calculate the allowance for each employee. Remember if a staff member feels they have not received as much due to a protected characteristic, they may pursue potentially costly discrimination claims.

Study shows lack of employee awareness in mental health support initiatives

Research by insurance company Towergate Health and Protection demonstrates that although organisations are increasingly offering mental health support, only a small number of employees actually use them.

Mental health at work remains a significant issue for the modern day organisations, with increasing numbers recognising the impact that it can have on the wellbeing of their staff. Although more organisations are now taking steps to tackle this, such as introducing an Employee Assistance Programme (EAP), these latest figures suggest that there may be still more work that needs to be done to raise awareness of these options.

Figures from this study show that 76 per cent of organisations are now offering access to initiatives such as an EAP in order to assist employees with mental health issues. However, just 10 per cent of HR professionals asked felt that staff actually valued these options, with only 5 per cent believing that their EAP was actually used. When asked why take-up had been so low, 15 per cent outlined that it was communication that was the issue; staff remained unaware of the options open to them.

Distribution director for Towergate Health & Protection, Brett Hill, calls for ‘communication to take centre stage’ if organisations ‘want their work in supporting mental wellbeing to really make a difference’. He goes on to state that support is available, urging organisations to make ‘the most of’ external advisors who can assist them.

Managers and inductions should encourage employees to come forward with any issues they may be having, whilst leaflets and cards should be distributed regularly to remind employees of the options open to them. Additionally, the organisation could hold regular employee surveys to ascertain if employees are aware of the support on offer and evaluate if it could do more to improve awareness.

Whilst certain mental health initiatives such as an EAP may not be possible for all organisations, they should bear in mind that, by taking clear steps to support individuals suffering from poor mental health, they can experience real benefits. For example, if staff feel supported in this issue, they are more likely to remain in their roles, take less time off sick and maintain their productivity. Publicly demonstrating a commitment to mental health can also be highly attractive to external candidates, potentially attracting skilled individuals to the organisation that may not have come before.

Two in five employees admit to ‘pulling a sickie’

Survey brings into question how much organisations can trust claims of sickness at work.

A Com Res study has revealed that 40 per cent of workers would fabricate an illness if they needed a day off, which may cause organisations to think twice next time they have an employee who claims to be too ill to make it to work.

The same study also revealed that 66 per cent of employees would not inform their organisation if they became aware that a colleague was faking a bout of sickness, making it much harder for managers to establish whether absent staff are telling the truth or not.

Separate studies show that UK employees take an average of 6.9 sick days’ each year, and although organisations will naturally want to ensure staff are being honest when phoning in sick to work, there is often no way of knowing how many of these are genuine

Whilst it is hard to control employees’ actions, having a clear policy on sickness, which details how employees are required to notify the organisation, may prove beneficial. Conducting routine return to work interviews will also show that bouts of sickness are treated seriously, whilst employees may be less likely to take a ‘sickie’ if it means having to lie about their condition directly to their manager upon their return.

Organisations are also more likely to be suspicious of individuals who take frequent short-term sickness absences, especially if these appear to be ‘scheduled’ on purpose so they are able to take advantage of a long weekend.

Although it would be inappropriate to jump straight to a disciplinary without clear evidence, a well-structured policy will allow organisations to take disciplinary action where the level of absence reaches an agreed upon trigger point. In these circumstances, warnings may be issued and the employee may be placed on an improvement plan.

Having said this, it is important to remember that a disability or other underlying conditions can result in short term absences. Therefore, organisations must make reasonable adjustments where necessary, which could include amending any absence ‘trigger points’ to accommodate for disabled staff.

Organisations who fear they have an issue with staff ‘pulling sickies’ at work may also want to look at any workplace factors that may be contributing to this. Fostering an open and honest working environment is likely to encourage staff to report any issues in the first place, and organisations should respond to any complaints of bullying or harassment without hesitation, as these can make staff hesitant to attend work.