As autumn moves into winter and the clocks go back it is the time that we all start to think about new year plans and the “to do” list for 2010. Here are our top tips on being prepared for the most recent changes that have taken place affecting HR matters ranging from the impact of new legislative changes, statutory increases, the impact of recent case law to general practical steps to take going into the new year.
Statutory redundancy calculation
Do not forget that as from 1 October 2009 the maximum week’s pay when calculating statutory redundancy payments has increased from £350 to £380. This new limit applies to all statutory limits to a week’s pay, for example when calculating the unfair dismissal basic award.
Increase in the national minimum wage rate
If you have any employees whose salary was pegged at the previous minimum hourly rate of £5.73 those salaries should have increased to £5.80 with effect from 1 October 2009.
Consider the implications of the HeyDey compulsory retirement case
You would have to have been living on the moon for the last couple of years if you had not at some point heard about the case brought by the “HeyDey” group which was part of the charity Age Concern. It has taken more than three years and a trip to the European Court of Justice and back before it obtained a decision to its challenge to the UK’s compulsory retirement age of 65 years. In the meantime all employment tribunal cases arising out of compulsory retirement were stayed.
It was finally decided at the end of September that the UK legislation on compulsory retirement is lawful (and consequently the stay on claims has been lifted). Although the decision means that imminent changes to default retirement ages in employment contracts are not required, the High Court commented that in light of the current economic circumstances it will be unlikely that the UK can keep the default retirement age at 65 years after the scheduled review in 2010.
Top tip: keep possible changes to normal retirement ages in mind when reviewing and updating your employment contracts and handbooks in the New Year.
Change to maximum injury to feelings awards
As you will be aware, discrimination claims give rise to awards to injury to feelings as well as loss-based compensation. The level of the award depended on the severity of the discrimination suffered, and formerly the lowest award was £500 and the highest award was £25,000. The recent trend has been for future losses to be greater due to the current economic climate.
Now, in the case of Da’Bell v NSPCC, the Employment Appeal Tribunal has decided the bands within which it determines awards for injury to feelings should also be increased to take inflation increases into account.
With immediate effect, the bands have increased as follows:-
- Lower band (for less serious discrimination e.g. where one-off incident): £600 to £6,000
- Middle band: £6,000 to £18,000
- Top band (most serious cases of discrimination e.g. campaign of harassment): £18,000 to £30,000.
Get your HR documents into shape going into the New Year
Now might be a good time to check that all of your employees – particularly the ones with very long service – have contracts with the kinds of protection that your business requires. Similarly, it is also worthwhile conducting a review of your other standard documents such as compromise agreements to ensure that its terms take into account the effect of current legislation and recent case law.
Be prepared for bonus season
As bonus season approaches make sure that you have updated your bonus policies – particularly if you have expressed these as changeable year to year. In addition, ensure that there are adequate clauses in your contracts which protect the company if an employee is terminated after bonuses have been announced but before the bonus is paid.
If you have concerns about an employee who is in line to receive a guaranteed large bonus next year and the business no longer wants to pay, consider whether there is a fair reason to deprive the employee of that bonus and start planning the appropriate process now.
Book training courses
You might wish to consider whether any of your managers might need to attend HR training courses to assist them with the day-to-day responsibility of managing staff. Areas such as discipline and dealing with complaints are issues that will come up regularly but your managers might not always deal with them correctly and the consequences for the company can be severe.
Whether or not you have had allegations of discrimination made against your business or its management, you might also wish to book diversity and equal opportunity training. Having regular training in such matters for all staff can be very positive with regard to improving employee relations. Furthermore, if there are instances where discrimination is alleged, the business can exhibit that it is proactive in trying to avoid such issues.
Clear the desk of disputes!
Finally, if there are any niggling disputes or issues with your employees, now might be the time to clear the decks by dealing with all of them. For example, do you have an employee on long-term sick leave? It is often tempting to let such issues continue when they are being paid by permanent health insurance and you have adequate cover for the work. However, now might be the time to get in touch with your employee, arrange for an occupation health assessment and tackle things head on. Similarly, if you have a performance issue with an employee, rather than suppressing your concerns arrange for performance management now. In normal circumstances it is difficult to fairly dismiss an employee for performance reasons without giving the employee a period during which he/she can improve and so waiting until you cannot take it anymore can lead to much difficulty later on!
Romella Manning-Brown is an HR and employment solicitor at Fox Williams LLP. Romella can be contacted on 020 7614 2616 or rmanning-brown@foxwilliams.com
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