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The Real Living Wage has increased, but is it actually benefitting employees?

Earlier this week it was announced that the Real Living Wage has been increased from £8.45 to £8.75 per hour across the UK and from £9.75 to £10.20 per hour in London. The changes have been driven largely by inflation, higher private rents and transport costs, and the new figures have been calculated to reflect the actual cost of living required in order to sustain a decent quality of life in the UK and London.

However, the Real Living Wage remains voluntary, unlike the mandatory National Living Wage put in place by the Government. Further, despite more than one thousand employers signing up to pay the Real Living Wage since Living Wage Week last year (including Google and Ikea), 5.5 million people across the UK (comprising 21% of the workforce) are still being paid less than the Real Living Wage. One of the criticisms of the Living Wage campaign was that it targeted sectors that do not tend to have significant numbers of low paid staff – as such, it may not, as yet, have had the desired impact for those who need it the most.

Further, there have been questions around how employers are offsetting the additional cost of meeting the Real Living Wage – some employers have cut overall pay packages to mitigate the costs of increased pay, for example stopping overtime rates and cutting back hours. As such, the overall benefit being passed to employees is, in some cases, questionable.

On a more positive note, the increase in the Real Living Wage will see more than 150,000 employees get a pay rise, as more than 3,600 employers have now signed up to pay the Real Living Wage since it was introduced. Among these is Heathrow, which is set to become the first Real Living Wage airport by the end of 2020.

The Real Living Wage has increased, but is it actually benefitting employees?

Government update on settled status

The Government has published further details on how the new settled status scheme for EU citizens and their family members will work as the UK leaves the EU. In the technical document sent to the European Commission, the Government has pledged that this new system will be streamlined, low-cost and user-friendly and will be designed with input from EU citizens.

Following the UK’s exit from the EU, EU citizens will have up to two years to apply to stay in the UK and obtain settled status. Applications will be decided solely on the criteria set out in the Withdrawal Agreement and there will be no discretion for refusal based on other reasons. As yet, these criteria are not conclusive. However , the Government has confirmed that they will be simple and transparent and will minimise the need for documentary evidence. Unsuccessful applicants will have a statutory right of appeal in line with current rights provided by the Free Movement Directive.

There are also plans to set up a voluntary application process to provide those currently resident with the option to get new settled status at their earliest convenience. This is in recognition of the administrative challenge of granting status to potentially over 3 million EU citizens and their families.

 Negotiations between the UK and EU are ongoing with the next talks set to take place on 9 and 10 November.

 

Government update on settled status

Cost vs. benefit of Pension complaints

The Pensions Ombudsman has some key benefits as a venue for employees with pension grievances. Jurisdiction revolves around ‘maladministration’ which can be quite broad and for employees, costs aren’t a real issue.

However given the potential costs raised by these complaints employers and pension schemes often run up large legal and actuarial costs defending Ombudsman claims.

This can lead to some “challenging” cost to benefit analyses for Ombudsman complaints, particularly where there are arguments around payments for distress and inconvenience caused by proven maladministration.

An example being the recent High Court case of Smith v. Sheffield Teaching Hospitals NHS Foundation Trust [2017] All ER (D) 166 (Oct) where an employee who worked for the NHS lost the right to an unreduced pension due to bad information.

The Ombudsman and the Court both decided that she couldn’t have the unreduced pension, but that an award for inconvenience and distress was appropriate. The Ombudsman decided that she should get £500. The employee wanted £36k based on the Ogden tables. The Court decided it would award £2750.

The question is, how much time and effort did the employer end up spending on defending the claim? Given the outcome, it would have probably been better to carefully check the pensions communications in the first place!

Cost vs. benefit of Pension complaints

Pay cap lift for police and prison officers

The 1% cap on public sector pay rises in England and Wales (which came into force in 2010) is to be lifted. The first professions to benefit will be police officers and prison officers. The government has announced that for the 2017/2018 FY police officers will receive a 1% pay rise plus a 1% bonus and prison officers will get a 1.7% rise, both of which will be funded from existing departmental budgets.
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Pay cap lift for police and prison officers

The Repeal Bill – Workers’ Rights

On 7 September 2017 the government published a factsheet on the impact of the Repeal Bill, which was recently passed by a majority of MPs, and the future status of workers' rights following the UK's withdrawal from the EU.
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The Repeal Bill – Workers’ Rights

People Management article, featuring Michael Bronstein

As you may have seen, People Management recently published an article on some of the big developments in employment law in 2017, particularly Brexit and the Taylor review. The discussion featured Michael Bronstein, a partner here at Dentons. Michael gave some insight on the potential effects of withdrawing from the EU on employment legislation, acknowledging that there is 'a common misconception that all employment rights are created by the EU'. In the lead up to triggering Article 50, the government maintained that there would not be any change to workers' rights following Brexit, so it would be brave to take away key protections, many of which derive from UK law anyway. Other commentators suggested there may be reforms to TUPE, although agreed that it will stay, but perhaps in a slightly amended form. As for a new visa regime for workers, the outcome is unclear. The uncertainty has already caused many workers to leave at a time where we are beginning to see a shortage of labour. This has not been helped by the recent leaked Home Office post-Brexit Immigration Policy which has confirmed the fears of employers with respect to the future of EU workers in the UK.
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People Management article, featuring Michael Bronstein

Leaked Home Office post-Brexit Immigration Policy

As many of you will have seen, the Home Office's draft Post-Brexit Immigration Policy was leaked this week, and has since become a topic of much interest. The document has caused concern among many employers, as the stricter controls being proposed on EU immigration could lead to a significant shortage of labour in the UK, which could be hugely damaging to the economy. EU nationals currently comprise around 7% of the overall workforce in UK, with certain sectors almost entirely dependant on their contribution.
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Leaked Home Office post-Brexit Immigration Policy

President of the Employment Tribunals announces increase in the Vento Bands

Following a recent consultation, the President of the Employment Tribunals has announced a rise in the compensation that employees can recover for 'injury to feelings', in the event that they suffer from discrimination in the workplace.
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President of the Employment Tribunals announces increase in the Vento Bands