Employment Issues in small business Accounting Services in London

This blog cover the Employment issues in small businesses. The working time and minimum wage regulations apply to nearly all businesses. The working time regulations are normally enforced by the Health and Safety Executive and the Minimum Wage regulations by HMRC and you need to keep records to show compliance with the regulations. There can be severe penalties for breach of the regulations.

The 48 Hour Working Week

The starting point is that workers have a statutory right to a maximum average working week of 48 hours.

The average is worked out over a 17 week reference period, with 26 weeks in some cases or 52 weeks by agreement and can be calculated on successive 17 week periods rather than a rolling basis if the worker agrees. Holiday and sickness need to be taken into account, so a worker cannot be expected to work double following a weeks holiday.
Working hours include all time at the employer’s disposal including training and being on standby. However lunch, travel to and from work and being free to do leisure activities while on standby do not count as working hours.
The rules do not apply to the self-employed and a few other areas such as junior doctors and the police.
The rules do apply to temporary workers.
Workers can opt-out of the 48 hour limit by a written agreement but cannot be forced or pressured to do so.

Rest Breaks and Leave

Workers are entitled to…

On every shift over six hours a minimum 20 minute break which in some circumstances can be accumulated but is increased to 30 minutes if under 18 and the period is more than four and a half hours.
11 hours (12 hours for under 18’s) consecutive rest between shifts each day which again can be accumulated in some circumstances.
One day off each week (2 days for under 18’s) or two days off every fortnight which again can be accumulated in some circumstances.
From 1 April 2009 5.6 weeks (28 days) paid annual holiday based on the workers average pay which can include bank and public holidays. These amounts accumulate pro-rata from the day they start working and is worked out on a pro-rata basis for part time employees. From 1 April 2009, payment in lieu cannot be provided for anything less than 5.6 weeks. The holiday pay must also be paid when the holiday is taken and not added to say an hourly rate when work is done.
There are special rules for night workers who regularly work at least 3 hours during the night which is a period of at least 7 hours including from midnight to 5am and usually from 11pm to 6am. They should not exceed eight hours in each 24 hour period averaged over 17 weeks although if the work involves special hazards or physical or mental strain this is the case in every 24 hour period.

The National Minimum Wage

The national minimum wage affects all businesses without exception.

Nearly all workers including temporary workers aged 18 and over are entitled to the minimum wage. It is £6.08 per hour from 1 October 2011 (increasing to £6.19 from 1 October 2012) an hour for those aged 21 and over. For those aged 18 to 20 the limit is £4.98 from 1 October 2011 (no change in October 2012). For those aged 16 and 17 the rate is £3.68 from 1 October 2011 (no change in October 2012). The apprentice rate is £2.60 from 1 October 2011 (increasing to £2.65 from 1 October 2012)for apprentices under 19 or 19 or over and in the first year of their apprenticeship.
An average pay is worked out for each pay reference period which can be up to a maximum of a month but premium payments such as time and a half for overtime cannot be included in the calculation.
The value of most perks cannot be included in the calculation and tips also do not count unless collected by the employers and then paid as part of the normal salary.
It is not possible to opt-out from the national minimum wage.
The national minimum wage does not apply to everyone. Notable exceptions include the self-employed, company directors without written contracts of employment, au pairs working in the family, students on work experience, armed forces and voluntary workers.

How we can help you

If you need any further assistance with the working time regulations and national minimum wage please contact us.

Age discrimination occurs when someone treats a person less favourably due to that person’s age.

Age discrimination in employment can affect anybody no matter how old they are. The law applies to discrimination in employment and in training and education. This includes access to help and guidance, recruitment, promotion, development, termination, perks and pay. As well as employers it also applies to providers of vocational training, trade unions, professional associations, employer organisations and trustees, and managers of occupational pension schemes.

The age discrimination regulations do not however apply to goods and services, so as an example insurance companies and health care providers will be able to continue to discriminate on the basis of age.

Overview of the Legislation

Age discrimination can take many forms but follows the same pattern as other forms of discrimination law in the UK…

Direct Discrimination – treating someone less favourably because of their age or the age they appear to be. So not employing people because they are over 55 fits this category.
Indirect Discrimination – this involves having a policy or practice that puts people of a certain age at a disadvantage. For example, only recruiting recently qualified accountants may fit this category as these are likely to be younger people.
Harassment – this is unwanted conduct on the grounds of age, which has the purpose or effect of violating a person’s dignity, or creating an intimidating, humiliating or offensive environment for that person. For example, age-related jokes in the workplace fit this category.
Victimisation – this arises from being treated unfairly as a result of making a complaint of age discrimination. For example, not promoting someone because they complain that younger employees are being favoured in their training.

Direct and indirect discrimination are unlawful UNLESS the employer can justify the discrimination.To do so the employer must show that it is a proportionate (appropriate and necessary) way of achieving a legitimate aim.

Harassment and victimisation will always be unlawful.

Other Specific Points

Upper age limits for unfair dismissal and redundancy no longer apply.
From 1 October 2011 the default retirement age is to be scrapped with transitional arrangements in place from 6 April 2011 till then.
Occupational pensions are covered by the regulations, as are employer contributions to personal pensions. However, the regulations generally allow pension schemes to work as they do now.
The regulations do not affect state pensions.
Length of service requirements for employment benefits practices of up to five years qualify for a special exemption and are deemed not to be unlawful age discrimination. If the period is longer than five years this may also be lawful if the employer can show that is expected to meet a business need such as to reward loyalty, to encourage motivation, or to recognise the experience of a worker.
The upper age limit of 65 for Statutory Sick Pay is removed.
Employers can take positive action to prevent or compensate for disadvantages by people from a certain age group. Positive action is allowed to encourage people to take up employment positions and to get access to training and education. For example, employers could aim their recruitment advertising at older people but the position must be open to people of all ages.
An employer can discriminate on the grounds of age if this is required by existing law, such as being aged at least 18 to work behind a bar.

Health and Safety for Employers

This is a brief guide to health and safety law. It does not describe the law in detail, but it does list the key points.

The health, safety and welfare at work of your employees are protected by law. You have a responsibility to protect your employees and keep them informed about health and safety.

Which laws apply?

The basis of British health and safety law is the Health and Safety at Work Act 1974, which sets out employers’ general duties towards employees and members of the public.

The Management of Health and Safety at Work Regulations 1999 clarify what employers are required to do to manage health and safety under the Health and Safety at Work Act. Like the Act, they apply to every work activity.

What does health and safety law require?

You have a duty under the law to ensure, so far as is reasonably practicable, your employees’ health, safety and welfare at work. In other words, the degree of risk in a particular job or workplace needs to be balanced against time, trouble, cost and the physical difficulty of taking measures to avoid or reduce the risk. What the law requires here is what good management and common sense would lead you to do anyway: that is, to look at what the risks are and take sensible measures to tackle them.

You must consult with your employees, or employee safety representative, on matters relating to their health and safety at work, including:

any change which may substantially affect their health and safety at work, e.g. in procedures, equipment or ways of working;
your arrangements to get competent people to help you satisfy health and safety laws;
the information you have given your employees on the likely risks and danger arising from their work measures to reduce or get rid of these risks what they should do if they have to deal with a risk or danger;
the planning of health and safety;
the health and safety consequences of introducing new technology.

In general, your duties as an employer include:

making your workplace safe and without risks to health;
ensuring plant and machinery are safe and that safe systems of work are set and followed;
ensuring articles and substances are moved, stored and used safely;
providing adequate welfare facilities;
giving your employees the information, instruction, training and supervision necessary for their health and safety.

In particular, you must…

assess the risks to your employees’ health and safety. Risk assessment should be straightforward in a simple workplace such as a typical office. It should only be complicated if it deals with serious hazards such as those on a nuclear power station, a chemical plant, laboratory or an oil rig.
make arrangements for implementing the health and safety measures identified as being necessary by the assessment;
if there are five or more employees, record the significant findings of the risk assessment and the arrangements for health and safety measures;
if there are five or more employees, draw up a health and safety policy statement, including the health and safety organisation and arrangements in force, and bring it to your employees’ attention;
appoint someone competent to assist with health and safety responsibilities, and consult your employees or employee representative about this appointment;
co-operate on health and safety with other employers sharing the same workplace;
set up emergency procedures;
provide adequate first-aid facilities;
make sure the workplace satisfies health, safety and welfare requirements, e.g. for ventilation, temperature, lighting, and sanitary, washing and rest facilities;
make sure that work equipment is suitable for its intended use, so far as health and safety are concerned, and that it is properly maintained and used;
prevent or adequately control exposure to substances which may damage your employees’ health;
take precautions against danger from flammable or explosive hazards, electrical equipment, noise and radiation;
avoid hazardous manual handling operations, and where they cannot be avoided, reduce the risk of injury;
provide health surveillance as appropriate;
provide free any protective clothing or equipment, where risks are not adequately controlled by other means;
ensure that appropriate safety signs are provided and maintained;
report certain injuries, diseases and dangerous occurrences to the appropriate health and safety enforcing agency.

Source: Health and Safety Executive

How We Can Help You

For further assistance please contact us.

Employment Issues in small business