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Labour’s plan to force businesses to hand equity to their staff has divided opinion. What would the policy mean for UK businesses?

The shadow chancellor John McDonnell has revealed details of Labour's employee ownership policy which would see every company with more than 250 staff set up an "inclusive ownership fund" (IOF). Under the proposal, an IOF would own up to 10 per cent of the company's equity on its workers' behalf.
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Labour’s plan to force businesses to hand equity to their staff has divided opinion. What would the policy mean for UK businesses?

Vento bands increase announced

The Presidents of the Employment Tribunals in England & Wales and Scotland have issued new guidance updating the bands of awards for “injury to feelings”, in the event that employees suffer from discrimination in the workplace.

The compensation available for injury to feelings is divided into four categories, depending on the seriousness of the discrimination that occurred, known as the Vento bands. The increased Vento bands, which will be effective for any claims issued on or after 6 April 2018, will be as follows: £900 to £8,600 for less serious cases (the lower band), £8,600 to £25,700 for serious cases (the middle band) and £25,700 to £42,900 for the most serious cases (the upper band). Compensation over £42,900 can be awarded by the Employment Tribunal in exceptional cases.

This increase should act as a reminder for employers to make sure that they are taking all reasonable steps to prevent discrimination in the workplace, including implementing up-to-date equal opportunities and anti-bullying and harassment policies, and carrying out regular diversity training.

Vento bands increase announced

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?

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

Its all change in employment law in April…

April is a key month for employment law changes and this April is no different. 6 April is “D-Day” for a number of significant changes. By way of reminder:

1 April

  • National minimum wage – the National Living Wage (for workers aged 25 and over) increased from £7.20 to £7.50 and there were also changes in the other bands.

Weeks commencing after 2 April

  • Cap on a week’s pay  – the cap on a week’s pay (which is used in statutory redundancy pay calculations for example) increased from £479 to £489.

5 April and onwards

  • Gender pay gap reporting – employers with 250 employees should have collated their relevant data on the first annual “snapshot date” yesterday. Today the work on calculations can begin! Private employers have a 12 month window (4 April 2018) before calculations must be published on the employer’s website and the relevant government website. Remember that public sector employers have a earlier snapshot date (31 March), their calculations need to be published by 30 March 2018 and every four years thereafter.

From 6 April

  • Unfair dismissal compensatory award – the statutory cap increases from £78,962 to £80,541.  Don’t forget that the cap will be one year of the employee’s gross salary if lower.
  • Apprenticeship levy – UK employers in the public and private sectors with annual wage bills of £3 million or more have to pay their monthly levy payments;
  • Immigration skills charge – employers who sponsor workers under tier 2 will have to pay £1,000 per year, or £364 if they are a small employer or a charity;
  • IR35 – new rules apply to public authorities paying personal service companies or other intermediaries. The public authority will need to make tax and National Insurance deductions as appropriate;
  • Salary sacrifice – relief on benefits in kind provided via salary sacrifice arrangements is being scaled back for benefits entered into from today.
Its all change in employment law in April…

Increase in limits

This week new limits applying to certain awards of employment tribunals, and other amounts payable under employment legislation, have been increased.

The increases apply where the event giving rise to the entitlement to compensation or other payments occurred on or after 6 April 2017. Limits previously in force are preserved in relation to cases where the relevant event was before 6 April 2017.

Key new relevant limits are as follows:

  • Minimum basic award in cases where a dismissal is unfair by virtue of health and safety, employee representative, trade union, or occupational pension trustee reasons: Old limit – £5,853; New limit – £5,970
  • Limit on amount of guarantee payment payable to an employee in respect of any day: Old limit – £26.00; New limit – £27.00
  • Limit on amount of compensatory award for unfair dismissal: Old limit – £78,962; New limit – £80,541
  • Maximum amount of “a week’s pay” for the purpose of calculating a redundancy payment or for various awards including the basic or additional award of compensation for unfair dismissal: Old limit – £479; New limit – £489
Increase in limits

Tribunal awards and statutory redundancy pay – annual increases

Where the event that gives rise to an award of compensation, e.g. an unfair dismissal or a redundancy, happens on or after 6 April 2016, new increased compensation or payment amounts will apply.

The limit on a week’s pay which is used to calculate statutory redundancy payments will increase from £475 to £479.

The maximum compensatory award for unfair dismissal will increase from £78,335 to £78,962. This remains subject to the cap on the compensatory award of 52 weeks’ pay.

Tribunal awards and statutory redundancy pay – annual increases