National Minimum Wage – unintentional breach

Recent headlines regarding Monsoon Accessorize where they unintentionally failed to ensure their staff were paid the NMW. highlights a risk that more employers could find themselves in a similar position.
Monsoon Accessorize have been forced to reimburse staff pay and have been fined £28,147.81
The Company are currently working with HMRC and reviewing its payroll processes in order to rectify the breach of pay regulations.

The case: Monsoon requires their staff to wear Monsoon clothes on duty, employees were previously required to purchase clothing but received these at a discounted rate out of their wages, but the compulsory expense meant that many staff were taking home less than the legally required minimum wage.

Foot Locker and French Connection have both failed to pay the minimum wage for the same reason.

It is important that employee benefits are not counted towards a workers average salary.
The strict legal obligation is to ensure that an employee’s average salary over a pay reference period (the interval in which they are paid) does not fall below the minimum. That figure must be calculated after a number of specified deductions and there is a list of items which by law cannot count towards the NMW, these include overtime rates, expenses, allowances, vouchers, loan and wage advances and any other benefit in kind (other than accommodation).

If you offer any additional payments or benefits you need to ensure that you are paying at least the NMW, after appropriate deductions have been made from the calculation.

Zero hours contracts

Zero hours contract is a non -legal term used to describe many different types of casual agreements between an employer and an individual.
A zero hours contract is one in which the employer does not guarantee the individual any hours of work. The employer offers the individual work when it arises, and the individual can either accept the work offered, or decide not to take up the offer of work on that occasion.
Regardless of how many hours are actually offered, the employer must pay at least the National Minimum Wage.
Those employed on a Zero hours contract still has employment rights associated with their employment status and individuals on a zero hours contract will either have employment status of a ‘worker’ or an ‘employee’.
Any individual who is a ‘worker’ will be entitled to at least the National Minimum Wage, paid annual leave, rest breaks and protection from discrimination.
Zero hours contracts are useful where work demands are irregular or where there is not a constant demand for staff. Zero hours contracts may also provide a level of flexibility for the individual.
Zero hours contracts might not be appropriate if the job offered will mean the individual will work regular hours over a continuous period of time.
Employers should consider whether a zero hours contract is the best type of contract for their business need depending on the nature of the work to be offered and the specific circumstances. Depending on the business need, alternatives might include: offering overtime to permanent staff, recruiting a part time employee or someone on a fixed term contract if regular hours need to be worked and considering using agency staff.
It is important to ensure that best practice is followed should you decide to use zero hours contracts, the contracts need to be clear and transparent so that the individual can understand their rights and what the implications of such a contract means to them.

Sports Direct CEO to face criminal charges over warehouse staff redundancies

Breaking news ………

CEO (David Michael Forsey) has stepped down from his post just days before he was due to face criminal charges over the mishandling of staff redundancies.
On Friday 9th October 2015, the insolvency Service announced that Forsey had been charged after failing to inform authorities of plans to lay off staff from the Dundonald warehouse in Scotland. The redundancies were made in relation to the controversial pre-pack administration of wholly-owned fashion chain West Coast Capitial (USC), in January this year.
Around 200 workers at the USC site were given just 15 minutes notice by administrators that they would be losing their jobs, before the company was shut down.
Under employment law this number of workers should be given a minimum period of 30 days consultation before losing their jobs.
A statement from the Insolvency Service read: “We can confirm that criminal proceedings have been commenced against Forsey. He is charged with an offence contrary to section 194 of the Trade Union and Labour Relations (Consolidation)Act 1992.” “The investigation into the conduct of the directors is ongoing”.
This is thought to be the first time a FTSE100 chief has been charged under the Trade Union Act. If found guilty. Forsey could be fined up to £5,000 and banned from holding directorship for up to 15 years.


Shared (Grand) Parental Leave. George Osborne announces that working grandparents will be able to share parental leave in the future

Today (5th October 2015), the Chancellor has announced that he will extend shared parental leave and pay to working grandparents. Note it will only affects working grandparents (non-working grandparents aren’t likely to meet the eligibility criteria).

The planned changes will increase flexibility and choice in parental leave arrangements and support working parents with the costs of childcare during the first year of a child’s life.

The government will bring forward legislation to enable this change, with the aim of implementing the policy by 2018.

The government will consult on the details in the first half of 2016.

For more details please see website