Business groups have reacted angrily to an Employment Appeal Tribunal (EAT) judgment that could mean the holiday pay of millions of UK workers will need to include overtime. Currently, holiday pay is based on basic pay.
To make matters worse for employers, this could be backdated, with some business groups warning that the resulting additional cost burden could force many small firms out of business.
According to the government, about a sixth of the UK’s 30m employees could be entitled to the “backdated holiday pay bonanza” (as The Daily Mirror described it). Critics were quick to point out that the ruling did not make it clear whether “overtime” referred to compulsory and voluntary overtime.
The EAT judgment was made on 4 November and relates to appeals in Bear Scotland v Fulton and Baxter, Hertel (UK) Ltd v Wood and others and Amec Group Ltd v Law and others cases. The employees won their original claims and the tribunal rejected the companies’ appeals.
John Allan, national chairman of The Federation of Small Businesses (FSB), said: “Clearly it would be desperately unjust to expect businesses to pay retrospective compensation for how they calculated holiday pay when they were fully compliant with the law as it was understood at the time. The FSB has been appointed to a government taskforce to examine this issue and will be fighting hard for small businesses to be insulated from the uncertainty and legal risks this ruling brings.”
Allie Renison of the Institute of Directors said: “Businesses have had the rug pulled from under them. Overtime has never been included in holiday pay before and many companies are rightly worried about the administrative nightmare this judgement creates. The extra complexity will be hard for small firms in particular to handle, especially in industries where the workload shifts up and down over the year.
“There is some consolation that backdated claims may be limited to three months, but it’s not clear how watertight this is. Overall, it will increase costs for businesses, and the money has to come from somewhere. Firms may have to postpone investment or hiring, or give existing staff fewer hours. Managers will have to spend a lot of wasted time making sure they comply with the extra red tape, when they should be allowed to focus on developing new products and services and growing their businesses.”
CBI director general John Cridland, described the ruling as a “real blow to UK businesses now facing the prospect of punitive costs potentially running into billions of pounds – and not all will survive, which could mean significant job losses,” he warned. “This judgment must be challenged. We need the UK government to step up its defence of the current UK law, and use its powers to limit any retrospective liability that firms may face.”
Predictably, employee representatives welcomed the ruling. Howard Beckett of Unite said: “Until now, some workers who are required to do overtime have been penalised for taking time off [to which] they are entitled. This ruling not only secures justice for our members who were short changed, but means employers have got to get their house in order.”
TUC general secretary Frances O’Grady commented: “Failing to count overtime when calculating holiday pay is quite simply wrong. This ruling marks a victory for people who work long and hard to make a living, and who deserve to be properly paid when they take their well-earned leave.”
Business Secretary Vince Cable has set up a task force to assess the impact of the ruling. He said: “The government will review the judgment in detail as a matter of urgency. To properly understand the financial exposure employers face, we have set up a task force of representatives from government and business to discuss how we can limit the impact on business.”
So, employers can breathe easily – at least for the time being. The EAT judgment could also be referred to the Court of Appeal, which means a final decision on implementation could be some years away.
Blog written by Start Up Donut editor and freelance SME content writer Mark Williams.
Published recently on the Health & Safety Executive (HSE) website, the Health and Safety Statistics – Key figures for Great Britain 2013/14 provides food for thought for employers.
According to the statistics: “1.2m people who worked during the last year were suffering from an illness (long-standing as well as new cases) they believed was caused or made worse by their current or past work. [Half a million] of these were new conditions [that] started during the year. A further 800,000 former workers (who last worked more than 12 months ago) were suffering from an illness [that] was caused or made worse by their past work.”
Tragically, 133 workers were killed at work, which equals 0.44 deaths per 100,000 workers, with 77,593 other injuries to employees reported under RIDDOR (Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013), a rate of 304.6 per 100 000 employees.
As HSE reminds us: “RIDDOR places duties on employers, the self-employed and people in control of work premises (the “Responsible Person”) to report certain serious workplace accidents, occupational diseases and specified dangerous occurrences (near misses).”
According to the Labour Force Survey (a quarterly national survey by the Office for National Statistics of some 44 000 households), 629,000 injuries occurred at work in 2013/14 (or 2,140 injuries per 100,000 workers), with 148,000 of these leading to a workplace absence of seven days or more.
Still too many employers get it wrong when it comes to health and safety, with HSE having prosecuted 551 cases in 2013/14 and 88 cases prosecuted by local authorities in England and Wales in 2013/14. In Scotland, the Procurator Fiscal prosecuted 35 cases, with 13,790 enforcement notices issued by all enforcing authorities.
So, what was the impact on business and the economy? According to HSE, 28.2m days were lost because of work-related ill health or injury (that’s an average of 16 days per case), while 23.5m days were lost because of work-related ill health and 4.7m because of workplace injury. And “injuries and new cases of ill health resulting largely from current working conditions cost an estimated £14.2bn in 2012/13 (based on 2012 prices).” Employers and the government paid half of this; with the rest paid by “individuals” (presumably that means those killed, injured or made ill), but the total cost has fallen significantly since 2006/07 (£16.5bn).
Although one death or serious injury in a workplace in the UK or anywhere else is one too many, without doubt the introduction of the Health and Safety at Work Act 1974 brought about the major reduction in work-related injury and ill health that has happened in recent decades. According to the HSE, in Great Britain between 1974 and 2014 fatal injuries to employees fell by 87%; while reported non-fatal injuries fell by 77% between 1974 and 2012. That’s something for which employees and employers can be grateful.
Blog written by Start Up Donut editor and freelance SME content writer Mark Williams.
If you’ve worked hard to build up a brand or come up with a new product or process, you have intellectual property (IP). You probably know that your IP is at risk; others may try to copy your idea or pass off their products under your brand. This is known as infringement and can cause financial and reputational harm.
What you might not know is that members of your supply network can be one of the most common IP infringers. That’s right, incredible though it may seem, people you trust to make or sell your products can be among the most likely to steal your ideas.
Upon further examination, this makes more sense. When you instruct a supplier to manufacture your product, for example, you share secrets with them. They then not only have the required information, but also the means to roll it out quickly.
Meanwhile, the retailers you supply often have their own manufacturers and if a product succeeds, they could create an “own-label” version, enabling them to dramatically increase their margins – by cutting you out. Think this would never happen? Think again.
If you’re a small business or start-up, you’re at risk of being caught in a David v Goliath battle with bigger organisations, which is certainly not where you want to be.
This isn’t just limited to start-ups that sell physical products either. If you’ve commissioned a programmer to create some software for you, what’s to stop them designing a similar product and selling it to one of your competitors? Thankfully, you can protect yourself, but what steps should you take?
There are a number of essential steps that any business ought to take when instructing third parties to create and sell its products, chief among them having agreements in place. Non-disclosure agreements should be signed before any information is disclosed and relationships with all suppliers, distributers and consultants should be governed by agreements that clearly define your IP and confirm your ownership.
Make sure that where you can, you register your IP – especially trademarks, patents and product designs. This isn’t enough to prevent IP theft on its own, but it’ll come in handy should an infringement occur.
There’s a good rule of thumb here – don’t tell anyone anything they don’t need to know.
If the worst happens and your IP is infringed, it’s up to you to enforce it. Many businesses believe that having a registered right is enough to stop IP theft, but it actually falls to you to instruct lawyers (and pay their fees, of course).
The legal costs to take a case to court can easily be £100,000, which is why IP insurance exists. If your IP is infringed and you’ve taken out a policy, the IP insurer will fund the case.
By going into business, you necessarily incur the risk of IP theft. However, taking a few relatively painless steps can provide a good degree of protection.
Copyright © 2014 David Bloom. David Bloom is an IP lawyer and founder of IP insurance broker Safeguard iP.
Body art has become part of everyday life throughout western society. Long gone are the days when tattoos were considered a novelty favoured by specific social groups and subcultures.
However, not all employers welcome tattoos, so, should body art enthusiasts be told to cover up their tattoos at work or would this be discrimination? With one in five people in Britain now having a tattoo, this is a relevant employment law issue for many UK businesses.
Employers insist they have the right to make employees cover up if their appearance compromises the company’s image. But while there's plenty of examples of workers being asked to leave their job for having “excessive” tattoos, there's a growing number of dismissals of employees with minimal body art.
A recent example of “ink prejudice” involves a business consultant in Milton Keynes who reportedly lost her job because she has an image of a butterfly measuring 4cm across her foot. If body art is part of someone’s identity, surely censorship of this kind is not far removed from the stifling of other forms of self-expression, such as sexuality and religious belief?
Considering tattoos to be a form of self-expression also encourages debate over exactly what is an “acceptable” belief. Should a controversial symbol or phrase be permitted just because an individual believes in it?
With no single set of rules in place for having tattoos, organisations are free to put their own in place – and alter them as they see fit. Larger businesses can seemingly get away with this due to their prestige, but smaller businesses relying on a specific image can be damaged if they don't have the right to influence employee conduct.
However, there is room for argument thanks to the Equality Act of 2010, which can be used to claim that censorship of tattoos is an infringement of someone’s human rights if the image relates directly to a religious or cultural belief. This law provides “protection for people discriminated against because they are perceived to have, or are associated with someone who has, a protected characteristic”.
But does a self-inflicted body modification truly count as a characteristic?
With more people getting tattoos, it seems likely that body art will eventually receive less discrimination, but who gets to decide what is acceptable when it comes to body art? The questions are vast and opinions differ widely.
Copyright © 2014 Nationwide Employment Lawyers.
More than eight million patents are held worldwide by thousands of businesses, many of which do not know they are paying far more than necessary to renew their patents.
For each patent a business holds, a fee must be paid to the patent office every year to keep their intellectual property in force. If you hold patents in multiple regions, the costs can quickly spiral out of control.
To manage the process, most of these businesses employ the expensive legal expertise of patent attorneys, believing that the renewal process is complicated. In fact, the process is very simple. So these patent holders are, in turn, often paying four times the patent office fees they are required to pay – unnecessarily.
This is because most patent attorneys outsource the work to other companies without the patent-holder knowing and these organisations mostly quote a single fee for each renewal, but then bury hidden charges into inflated foreign exchange rates.
For instance, to make a United States Large Entity 3rd renewal with one of the market leading international renewals company, we were quoted a patent office fee of $7,400, which at the time of the quote and exchange rate, equalled £6,585.
But the actual patent office fee was only £5,094, meaning that the company charged its client £1,490 somewhere in this exchange process. It is expected that the patent holder will not bother to check what the actual patent office fee was and can end up paying up to four times more than they need to.
Patent holders can cut this wastage by simply administering their own patent renewals using online automated systems.