Tag Archive | "Employment"

WHERE EMPLOYERS GO WRONG

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WHERE EMPLOYERS GO WRONG


Human capital is more than just a resource, it is your strongest asset – so look after it writes Adam Bernstein

Employees are a firm’s greatest asset and they’re probably the most expensive too. So why is it that some employers and managers seem hell bent on treating their staff so poorly? Why do they create ‘them and us’ divisions without a care?

Having a unified and happy work force is critical to success. Employees can make or break an organisation. Staff don’t have to go the extra mile, they can upset a customer base, and they will leave for other opportunities taking both knowledge and customers
with them.

Any manager worth their salt knows that recruitment of replacements is both expensive and disruptive.

FIVE CAUSES FOR CONCERN
Lee Ashwood, a Senior Associate in the employment department of law firm Eversheds, reckons that there are a number of common causes of employee malcontent.

In his experience, and in no particular order, there are five key areas of concern.“The first”, says Ashwood, “is company sick pay being withheld in situations where the employer has a discretion over the payment.” From his point of view, those genuinely unwell consider the withholding of monies as an arbitrary penalty.

Next he sees real and sometimes bitter disputes over pay “in relation to hours worked, what constitutes overtime and, of course, simply not being paid enough in their opinion”. The issue at hand is that the web has made salary and pay more transparent and staff consider it their right to be paid the market rate. A number of cases on this have been brought and won by employees.

Thirdly, and this is a big problem for Ashwood, is inconsistency in treatment: “I’ve seen on many occasions situations where an employee feels that they are always given the worst tasks to complete, have not been allowed time off at short notice when others have in the past, or have not had the perks that others have been given in similar circumstances.”

Fourth on the list, and one that many can attest to, is an employee thinking that their workload is too much or that work has not been distributed evenly. This disparity is a real cause of employee stress that can lead to an employer either paying for employee sickness and lost production or finding themselves in a tribunal.

The last cause for concern for Ashwood fits under the heading of bullying by managers and colleagues. Indeed, a recent report by the arbitration service ACAS has found that workplace bullying may actually be on the rise, with ACAS receiving around 20,000 calls relating to bullying each year, more than ever before.thinkstockphotos-627390700

STAFF RETENTION
Points raised about staff retention are true in to all businesses, but it is perhaps factors that rely most on having bright and committed individuals on their teams. However, it is exactly because these people are both bright and an asset, that rival firms will try and poach them… and if the employee thinks they are getting a raw deal at their current employer they will move. Interestingly, research shows that this rarely has much to do with money – more often than not it is to do with how they perceive themselves to be valued by the company. Consider the number of Unipart Automotive employees who ‘defected’ to other companies well before the firm went bust in 2014. If employees think there is a lack of opportunity then there will likely be a high turnover rate.

STAFF APPRECIATION
So with the scene set, why do employers make mistakes? Do they misunderstand the law? Do they deliberately ignore the process? Or are they simply failing to appreciate the value and views of their staff?

With his lawyer’s hat on, Ashwood thinks that “making mistakes in not following what the law requires is understandable as it is often complex” and not well-known. “However,” he adds, “if you treat staff with empathy and respect, you rarely give them a reason to check to see if you are treating them in accordance with the law. It is not appreciating this point that leads to very common mistakes which in turn lead to disgruntled staff, grievances being raised or, worse, Employment Tribunal claims”.

CLAIMS ARE STILL BEING MADE
July 2013 saw the introduction of tribunal fees paid by claimants and although the number of claims has fallen from 50,000 in the first quarter of 2013 to just over 17,000 in the fourth quarter of 2015, an employee claim is not something that employers should welcome. Indeed, in a March 2015 report in the Daily Mail, The British Chambers of Commerce estimated (then) that the average cost to a business of defending itself at tribunal was £8,500 while the average cost of agreeing a settlement was £5,400.

BRING ME SOLUTIONS
The most obvious solution to counter discontent is for employers to take time to consider the impact of a decision on the employee in question; explain the reasons for the decision; and listen to any objection the employee may have about the decision. Following this course of action would make a number of employment lawyers very and distinctly unemployed.

Moving on, the better employer understands the importance of employee motivation, something that Richard Branson is well known for. In an April 2015 blog, How to keep your best staff, Branson underscores one of his key principles…that staff matter: “Making money or moving up the corporate ladder is no longer considered the be all and end all of career success. Today, one of the biggest indicators of success is purpose. And, in a world where purpose reigns supreme, it’s only natural for people to want to be heard and have their opinions valued.”

This logic is noted by Ashwood who understands that every staff member is likely to have different reasons and motivations for coming to work: “Just because you are solely focused on making your business as profitable as possible and would be prepared to work all hours to do this, does not mean others are or should be judged negatively because they are not. This means you should not take staff for granted and should try to tap into what motivates them in order to improve their performance.”

MOTIVATION
So let’s look at motivation. In simple terms, people work because they are either extrinsically or intrinsically motivated. The former is the poorer relation. In essence, it uses bribes to get staff to work harder – pay, holiday or some other reward. The problem is that the efficacy of an extrinsic motivator wanes given time and once the employee becomes disgruntled with the amount of tax charged to the ‘bribe’. Alternatively, and more preferable, is the pursuit of intrinsic motivation where staff do something because they want to do it. It’s the very reason why someone will willingly work through their lunch hour or will go beyond the call of duty to help a customer.

To be a successful manager that can instil intrinsic motivation within employees requires an ability to understand what an employee can do and also what they like to do. These goals can be matched in a number of ways.

Firstly, managers should help staff to develop themselves so that they maintain their market potential. Ignore this and they’ll leave for a firm that will. Next consider that staff now want a good work-life balance because after all, there’s no point being the richest man in the cemetery. Not everyone works for money – it’s the ‘eat to live’ rather than the ‘live to eat’ perspective.

Of course, businesses are not democracies, but nevertheless, staff like to feel that they have some level of input to decisions that affect them. The web has clearly exacerbated the importance of this point and firms that keep employees in the dark will eventually lose out to rumour and gossip.

Firms that don’t treat staff like automatons and who instead offer interesting tasks will keep employees more firmly engaged. It’s a sad function of modern life that people nowadays have shorter attention spans, something that can be squarely blamed on smartphones.

And lastly, staff bask in the glow of recognition for their efforts. Positive feedback and constructive criticism will do wonders for keeping an individual within a firm with velvet handcuffs.

To sum up the mantra for managers must be to look beyond the balance sheet and to those that are the backbone of the business. Get it right and employers will be on to a winner. Get it wrong and it’ll surely be the death knell of the firm.

Posted in CAT Know-How, Factor & Supplier News, Garage News, News, Retailer NewsComments (0)

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KEEPING THE RIGHT PEOPLE


Holding on to the best candidates means more than just money says Andy Savva

Andy Savva

Savva has run various large independent garages and has been a troubleshooter for underperforming franchise workshops. comment@haymarket.com

One of the greatest challenges facing garage employers today is discovering and retaining good technicians, reception personnel, as well as support staff such as administrators, valets and drivers.

As a former garage owner, I know how difficult this can be.I realised early on in my business career that focusing on recruitment, selection and retention was one of the most important steps towards building a successful business.

The implications of poor recruitment selection decisions for the business as a whole can be catastrophic and so often visiting garages up and down the country I find staff members who are placed in positions without the necessary skill set for the job they are doing.

Why this is? Well the answer is garage proprietors are reluctant to pay a salary for the right person, so they end up recruiting people without the right skills and then asking them to fulfil jobs that they are just not capable of doing. You may ask me: ’What’s the right salary?’ Well my answer to that is clear.

If you have identified the correct person with the right skill level and pedigree, why not ask them what they would like to be paid to work in your business? That’s exactly what I did, and guess what? It always caught people by surprise because they were never asked that before. They never knew what to reply back to me, so I used to ask them what their current salary was, and when they replied back £32,000, I’d say well we are in luck then because I’m prepared to offer you £36,000, is that ok with you? If only I could take a picture of look of happy shock on their faces.

SALARY CAP
If you are going to worry about £2000 or £3000 per year, per employee or have salary cap for specific positions or any roles for that matter you will never attract the right person in an already under skilled sector. My attitude was find the right person and offer them a package they could never say no to.

You don’t just want to compete on money to get and keep the best candidates though. You want to demonstrate that you have created a workplace that attracts, retains and nourishes good people by doing things like providing an adequate staff room, and acknowledging good work. There are logical and consistent operating policies and procedures. You provide them with the correct tooling and equipment to carry out their duties, and let them know that they will be a respected team member who will be asked their opinions before business decisions are made that could affect them.

Illustration of a mechanic clinching holding spanner wrench looking to the side set inside shield crest on isolated background done in retro style.

MISSION SHARED
Do they understand your vision and values? If it’s a yes to all the above before you know it your creating a retention environment. Why would they want to leave you? Where would they go? Are there many other garages offering the package they currently have? Above all I insisted on a culture of openness and shared information. I wanted my team to know where the company they were working for was going and what it will look like in the future. I wanted my employees knowing how their specific jobs fitted into the grand scheme and what they can do to help my business get to where I wanted it to go. My experience taught me if you operate in an open environment where information is shared you will certainly benefit from higher retention rates. I would have failed if I knew my employees had thoughts like:

  • “It doesn’t feel good around here.”
  • “I don’t get the support I need to get my job done.”
  • “They wouldn’t miss me if I were gone.”
  • “I am not paid enough”

The lack of opportunity of staff promotions in most independent garages can create problems as some employees who are ambitious to progress in their career positions are very much restricted. This was always on the back of my mind, and to be honest, there was not much I could do in this area if a particular employee decided to leave for a senior role which I could not offer, however hard that was for me seeing them move on, although luckily for me, this only happened a couple of times. My overall goal as an employer was to make my business a place where people wanted to come to work. A place of discipline yet fun to be in and a place where everyone respected each other to cultivate a feeling of family.

These are the fundamentals that are needed to succeed in recruiting and maintaining a stable group of team members. Yes, I may have been the owner of Brunswick Garage and the driving force behind so many ideas however none would have been implemented without my wonderful team that I assembled.

Posted in CAT Know-How, Factor & Supplier News, Garage News, NewsComments (1)

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TAKEN TO TRIBUNAL: WHAT TO DO WHEN YOU RECEIVE A CLAIM


Mark Stevens Don’t sit on your hands if a claim comes through: Prompt action may save you in the long run

Mark Stevens

Mark Stevens is a solicitor at Veale Wasbrough Vizards

Since 2013 most employees wishing to pursue an employment tribunal claim against their employer have to pay a fee to do so. So if your business receives an employment tribunal claim – an ET1 form – what steps should you take and what are the key points to bear in mind?

DIARY DEADLINE
The priority is to make sure the response form is filled in smartly. Employers have 28 days from receipt of the ET1 to respond to the claim by filing form ET3 with the appropriate employment tribunal. The importance of meeting this deadline cannot be overstated. If you miss the deadline, the employment tribunal may enter a default judgment against you. The impact of a default judgment is that you cannot play a part in the claim or defend yourself. Extensions will only be granted by the employment tribunal where there are good grounds for doing so.

CONCILIATION
Employers should always check that the employee has submitted their case within the allotted time. The general rule is that an employee has three months from the termination of their employment to contact ACAS to initiate pre-claim conciliation regarding a potential unfair dismissal claim. If the worker is alleging discrimination, they have three months from the date of the alleged discriminatory act or the last event in a series of discriminatory acts about which they are complaining to contact ACAS regarding their complaint. For wages claims, a worker will have three months (less one day) from the date that the wages were due to be paid to contact ACAS. If the employee has failed to get their claim in before the relevant deadline then the employment tribunal will have no jurisdiction to hear the claim.

Some legal protections only apply to employees – for instance claims of unfair dismissal and for a statutory redundancy payment. Generally speaking, an employee can only pursue an unfair dismissal complaint against their employer once they have at least two years’ service with that employer, although there are important exceptions to this rule.

Make sure you know whom exactly the employee is trying to sue. It may that you have been incorrectly identified as the employer liable for the claimant’s claim – for instance as a result of a transfer when the business was taken over. If the claimant was engaged outside of England and Wales and has no connection with the UK, it may be that the employment tribunals don’t have jurisdiction.

Usually, the claims will be clearly set out on the ET1 form, but there may be further allegations included within any additional information attached to the ET1. Your defence should respond to each specific complaint that is being made.

Should the case proceed to a hearing, witness evidence will be required from those involved in the events giving rise to the claim. To be ready for this, and to accurately draft the defence, take initial statements from relevant employees. This is particularly useful when the events leading to the claim will be fresh and clearer in everyone’s mind. You should also begin to collate any relevant documents and put together your version of events and chronology. The disclosure process will require all relevant evidence to be sent to the claimant. For this reason, managers and employees involved should be told to preserve documents.

ALL COMES CLEAR
Sometimes an ET1 form – and the claims – will be unclear. If the ET1 is vague, part incomplete or contradictory then an employer could consider serving the employee with a request for Further and Better Particulars of the Claim. This will allow for specific questions to be put to the employee regarding the unclear parts of their claim. However, it can also give the employee a second opportunity to get their claim into shape.

TAKE LEGAL ADVICE EARLY ON

Taking legal advice at an early stage will ensure that you understand fully the claims being made against you, the required steps needed to comply with the employment tribunal’s rules of procedure and to help form a response and strategy to defend the claim. Inaccurately completing the ET3 response form – or failing to address something – is likely to cause problems later in the process, and could have expensive consequences at the employment tribunal hearing.

CONSIDER SETTLEMENT
Settlement is always an option to consider – particularly if it appears that the employee has a good chance of a successful claim. Other factors to take into account when considering settlement will be the possibility of any adverse publicity, damage to reputation and the time and legal fees required to defend any claim. You can also consider contacting ACAS to help broker a deal.

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THE BUDGET FOR AFTERMARKET BUSINESS


The March 2016 Budget seemed to offer little to big business but offered concessions to small firms. Richard Wild reports

Richard WildThe Chancellor’s Budget this March was eagerly awaited, not because it was such a rare occasion (it was effectively the fourth in a year if the Autumn Statement is taken into account), but because many expected either radical changes or limited proposals because of the forthcoming vote on EU membership.

Most of the coverage in the mainstream press concentrated on beer, tobacco and of course the sugar tax. However, for businesses – and particularly for business owners.

The main changes from 6 April this year that most will be interested in are the new Personal Savings Allowance, Dividend Allowance, and the higher rates of tax on dividend income. Business owners who pay themselves by a mixture of a salary and dividend will need to review this to see to what extent they are affected by these changes. Indeed, in terms of personal taxation, Class 2 national insurance contributions for the self employed are to be abolished from April 2018.

Further, the Chancellor is to raise the threshold for paying income tax to £11,500 by 2017 while the threshold for paying the higher rate of tax is also to be raised, meaning that the high rate threshold will rise from £43,000 to £45,000 in the tax year 2017/18. There was also a surprise reduction in the main rates of Capital Gains Tax (CGT), which is payable on the sale of assets that have increased in value, such as property investments and shares although investments in residential property will still be taxed at the previous, higher rates. The changes mean that from 6 April 2016 the 18% rate of CGT falls to 10% and the 28% rate of CGT falls to 20%. But there was more in the budget for businesses.

CORPORATION TAXATION
Many will be pleased that the Chancellor announced a range of measures to prevent gaps or deficiencies in the tax rules from providing opportunities for multinational companies to minimise the tax that they pay. However, he also announced that corporation tax was to be to cut to 17% by April 2020.

EMPLOYMENT COSTS
While not a tax measure, the new mandatory living wage will come into effect from 1 April 2016, set at £7.20 an hour for workers aged 25 and above, representing a £900 increase in earnings for a full-time worker on the current national minimum wage. The minimum wage will be increased from October 2016 for workers aged between 21 and 24 (to be £6.95), 18 and 20 (to be £5.55), 16 and 17 (to be £4.00) and apprentices (to be £3.40).
Know How

On the tax front, and while previously announced, there are many changes to the employment taxes rules which businesses need to be mindful of, all taking effect from 6 April 2016.

First off there’s the abolition of dispensations which save the reporting to HMRC of expenses and Benefits In Kind (BIKs) paid to employees. Dispensations will be replaced by an automatic reporting exemption for approved reimbursed expenses. Any existing dispensation will no longer be valid after 5 April 2016. From that date, any fixed rate expenses payments outside the rates set in law will need to be agreed again with HMRC. This even includes where an industry approved rate is being used, such as the Road Haulage Association rate for lorry drivers. Any employer with existing bespoke rates agreed in their dispensation will need to reapply for approval of the rate with HMRC before 6 April 2016. If they don’t, the dispensations will no longer be valid and the amounts will therefore be subject to tax and NIC.

The abolition of the £8,500 limit for BIKs means that all employees, no matter their level of pay, will need to be considered when determining whether it is necessary to report any BIKs received on form P11D.

BUSINESS RATES
Whilst not an HMRC tax, business rates can represent a significant cost to businesses. The Chancellor confirmed that 100% small business rate relief will continue for properties with a rateable value of £6,000 or less. From April 2017, 100% small business rate relief will be extended to properties with a rateable value of £12,000 or less. Businesses with a property with a rateable value between £12,000 and £15,000 will receive partial relief. The Chancellor estimates that 600,000 small businesses will pay no business rates at all, and an additional 50,000 businesses will receive partial relief.

MORE TAX
A number of fairly specific measures were also announced, which might impact on you depending upon the nature of your business or how you are structured. These include: Stamp Duty Land Tax, Insurance Premium Tax and salary sacrifice. The latter warrants a little explanation. Salary sacrifice arrangements enable employees to give up salary in return for benefits in kind that are often subject to more favourable tax treatment than if paid by way of salary. The government is therefore considering limiting the range of benefits that attract income tax and NICs advantages when they are provided as part of salary sacrifice schemes, although pension saving, childcare and health-related things such as cycle to work should continue to benefit.

MAKING TAX DIGITAL
In the March 2015 Budget the government committed to transform the tax system through digital technology and end the need for annual tax returns. It has ambitious plans to require businesses to keep digital accounting records, and require them to update HMRC from these digital records at least quarterly. Some of these measures will be introduced from April 2018, with the remaining changes coming on stream in April 2019 and April 2020. Businesses will be able to make ‘pay as you go’ tax payments, to ease the impact of their final tax bill. Whilst this seems some time away, businesses should start planning for these changes now, especially if manual accounting records are currently being kept.

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