On 10 May 2023, the UK government announced its intention to legislate to limit the length of non-compete clauses to a maximum of three months.
Announced as part of a number of planned legal reforms (also see our employment law watch blog on changes to post-Brexit employment legislation), the proposal is currently light on
The UK government has announced new, increased statutory rates and limits that will be in place in England and Wales from April 2023. The updates impact a range of employment payments including, among others, national minimum wage rates and statutory sickness, parental and redundancy payments.
These rates are reviewed on an annual basis but, in 2023, given recent economic and inflationary pressures, they are set to increase considerably. For some employers, these increases could have a material impact on their overall wage bill and the cost of some types of operational change. We discuss some of the main changes below. Please see a list of the key new rates and limits and how they have changed.
National minimum wage (from 1 April 2023)
National minimum wage rates are set to materially increase at all levels and age categories. By way of example, the national living wage (for workers aged 23 and over) is set to rise from £9.50 per hour to £10.42 per hour.
Steps will need to be taken to increase pay for workers currently below these limits from 1 April 2023. Attention will also need to be given to workers whose pay is close to the new threshold to confirm that, when their hourly pay is calculated in accordance with national minimum wage legislation, it continues to meet statutory minimum requirements. Not doing so risks costly penalties for non-compliance (up to £20,000 per worker) as well as payments of arrears and being named and shamed on government lists.
Where changes are made to some workers’ pay for compliance with these changes but not others, employers may also want to consider the impact on overall pay structures. Is there now a smaller gap / increased pressure between the lowest paid roles and slightly higher paid roles? Will there be increased pressure from other workers to also receive an inflationary pay rise? Employers should review contracts and pay review practices to assess how these type of issues will be managed and be ready to answer employee questions. Some employers may consider one-off payments/bonuses to employees to support them during the cost of living crisis but targeting such measures at employees at the lower end of the pay scale can create its own problems in terms of justifying an arbitrary cut off point.
Continue Reading Are you ready for the new employment rates and limits in England & Wales?
As reported on our blog in November, the idea of a four-day working week is gaining momentum in the UK. Last month, the not-for-profit organisation, 4 Day Week Global, reported the results of its six-month UK trial. With 92% of reporting companies confirming they will continue with the four-day week, the trial has been reported as a resounding success. In this article, we review where the four-day working week movement may go from here and what employers should be thinking about now.
What is a four-day working week?
The UK trial typically involved working hours being reduced to 80% (or full time employees working 4 out of 5 days a week) crucially without any drop in pay. The expectation is that productivity matches or even exceeds usual standards.
There are numerous ways to structure a four-day working week depending on what best suits a particular business, including a whole business shut down on one day, staggered days off or different sets ups for different teams or times of the year (e.g. to meet seasonal demand).
Why is a four-day working week becoming increasingly popular?
Coming out of the pandemic there has been an increased focus on work life balance, mental health and wellbeing, and employers’ roles in supporting employees on these fronts. Employers in some industries have also seen a talent war emerge as they find it harder to recruit and retain the best talent.
These conditions have arguably assisted the four-day working week in gaining momentum. Happy employees enjoying a healthy work life balance are less likely to fly the nest and join the so-called “great resignation”. For the moment at least, offering a four-day working week is also sufficiently unusual that it is likely to give a competitive advantage when recruiting new talent.
If it is correct that productivity is not negatively impacted, a four-day working week provides a way to recruit and retain without the cost burden of increasing salaries. It also offers cost savings in terms of recruitment costs and, potentially office running costs and, for some employees, potentially childcare costs. Of course, the more companies that make the move, the more pressure other employers in the same industries may feel to do the same.
Other benefits include reducing carbon footprint due to less frequent commuting and a potential social impact if employers use their time off for voluntary work. There is also a view that a four-day working week could improve equality by better enabling employees with caring responsibilities to manage those responsibilities around work and therefore remain in the workforce.
What were the conclusions of the trial?
The UK trial involved just under 3000 employees across 61 organisations. The headline results were as follows:
However, it is important to note that these statistics are based on a relatively small pool. The survey response rate from the participating employees was only 58% by the end of the trial and in some cases, the no/negative change was greater than the positive story. For example, whilst 39% of employees reported being less stressed by working a four-day week, 48% reported no change in their stress levels and 13% reported increased stress. The retention and absenteeism statistics may also be skewed by the small populations involved.
The UK government has largely rejected recommendations to reform the existing legal framework for employees experiencing menopause, instead promoting employer-led education and support. In this article, we review the government’s response to the House of Commons Women and Equalities Committee’s (the “WEC”) July 2022 report, “Menopause and the workplace” (the “WEC Report”), and consider what it means for employers.
The WEC Report considered the ways in which menopause affects women* in work and, in its own words, “wanted to understand what drove women to leave their jobs, the impact on the economy of haemorrhaging talent in this way, and the legal redress for women who have suffered menopause-related discrimination.” It made a number of recommendations to address the needs of menopausal employees and drive change, ranging from the publication of guidance and the appointment of a Menopause Ambassador, to larger scale reform of the legal framework.
The government has now confirmed that it will not be adopting the majority of the recommendations. The Chair of the WEC has voiced their disappointment and concern with the response, deeming it a “missed opportunity”.
The Report’s main recommendations and the government’s responses relevant to employers and the workplace are summarised below.
Continue Reading Menopause and the workplace – UK employers in the driving seat
The National Union of Teachers has announced industrial action across England and Wales during February and March over disputes concerning pay, with national strikes on 1 February and 15 – 16 March, and several other regional dates. Scotland is also facing a rolling programme of teaching strikes until April.
With over 23,000 schools affected across England and Wales, the potential disruption for working parents and their employers should not be underestimated, especially as we do not know how long the strike action will continue. The Strikes (Minimum Service Levels) Bill is currently making its way through parliament which, if enacted, will allow minimum service levels to be required in certain sectors (including education) during periods of industrial action. This could reduce the impact of teaching strikes on working parents and their employers, but it is not law yet and will not completely eradicate the disruption even if or when it is.
Instead, employers should prepare for disruption over the coming months and consider the effects on their parent employees and other staff. Employers who anticipate the challenges faced, engage early to facilitate a solution, and plan for the longer term rather than simply the currently announced strike dates, will be best placed to minimise the impact in the workplace. Employers should also keep in mind that employees may only receive very short notice of school closures or adapted arrangements, with teachers not required to inform their employer if they intend to strike, making advanced planning more difficult in some cases. Teachers’ own childcare issues during the strikes may also impact the ability of certain schools to stay open which again, may be an issue that arises at the last minute.
Of course, occasional school closures do happen (snow days, for example, are not uncommon in winter months), and employers will be well versed with managing the knock-on impact on working parents and managing requests for, for example, emergency leave, unpaid leave, annual leave, time off in lieu (TOIL), and flexibility (such as working at home or adjusted hours of work). Strike days are, in many ways, no different but there are a few particular points to remember, plus the regular and widespread nature of the planned action provides both employees and employers with an opportunity to plan ahead.
Continue Reading Teacher strikes: How UK employers can mitigate workplace disruption
Potential reform of the statutory flexible working regime has been on the agenda for several years but finally, after a consultation first launched in autumn 2021, the UK government has announced its intention to bring about some changes. Legislation will need to be introduced, and the timescale for that is currently unknown, but employers in England, Wales and Scotland will need to be prepared to review and amend their flexible working policies and procedures to ensure they comply with the new requirements.
Contrary to some headlines, the changes do not introduce flexible working as the default position. The reforms fall short of flexibility being the starting point (i.e. only to be deviated from if there was a good reason) and instead retain the current principle that there is a right to request flexible working, but no right to work flexibly. This means that, like now, employers will still be able to turn down requests if there is a good business reason for doing so or if eligibility criteria are not met. The eight business reasons for rejecting requests (the burden of additional costs; detrimental effect on ability to meet customer demand; inability to reorganise work among existing staff; inability to recruit additional staff; detrimental impact on quality; detrimental impact on performance; insufficiency of work during the periods they propose to work; or planned structural changes) will remain the same.
Continue Reading Flexible working reforms: what do UK employers need to know?
In mid-October 2022, Parliament has debated, for the first time, a proposal to implement a four-day working week in the UK. The bill, proposed by Labour, would reduce maximum working hours per week to 32 with no corresponding reduction in pay. Whilst it is unlikely that the bill will get very far (it is not supported by the government), it marks an interesting development in the case for a four-day working week, which is continuing to gain momentum.
In the UK, this increasing momentum is currently focused on a major six-month trial run by 4 Day Week Global involving over 3,000 employees across 70 organisations. The trial involves employees working 80% of their contractual hours for 100% pay with the expectation of achieving 100% productivity. Whilst the trial isn’t due to end until December 2022, the mid-term reported results are positive, with the majority of the companies which responded to the interim survey saying it worked for their businesses and 86% saying they planned to continue with a four-day working week after the trial.
Continue Reading Is a four-day working week the future for UK employers?
On 23 September 2022, the new Chancellor, Kwasi Kwarteng, unveiled the Growth Plan 2022 detailing the UK government’s set of economic policies aimed at, as the name suggests, boosting economic growth in the UK by improving competition and improving living standards by allowing people to retain more income. Much has been said in recent days on the merits and dangers of the plan and whilst we have seen an immediate impact on the value of the pound, it remains to be seen whether in the longer term the plan meets its aims and supports the country in navigating the likely impending recession. In the meantime, we summarise below the key elements of the plan from a UK employment perspective:
Continue Reading UK Employment Law: key messages from the UK Government’s Growth Plan
The Government Equalities Office has published new research giving helpful guidance on clearer ways for employers to present pay gap data. The research is the result of a trial by the Behavioural Insights Team focusing on how the public interprets gender pay gap figures. Taking as its starting point the idea that gender pay gap
The Supreme Court has delivered its ruling on the landmark Pimlico Plumbers case, upholding previous decisions that an ostensibly ‘self employed’ plumber was in fact properly classified as a ‘worker’ with valuable employment rights under UK law (including discrimination protection and holiday pay). The case has been closely monitored because of its impact on organisations