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Management legal issues: Law and order

Retail Jeweller looks at some of the key facts surrounding common legal issues employers may have to face and upcoming changes in the law

Business rates
What you need to know

Business rates continue to make the headlines, particularly in the run-up to the planned increase, due to come into effect on April 1. Ian Pitt, partner at property consultants Bruton Knowles and a Royal Institution of Chartered Surveyors registered valuer, says: “Business rates continue to be a costly burden and, with the high street continuing to suffer, there seems to be no respite for retail occupiers.”

The latest
From April 1, the Uniform Business Rate will increase in line with inflation. Pitt says: “Some experts are predicting an increase of more than 5.5% for the 2012/2013 Uniform Business Rate, up from 42.8p to 45.2p, and authorities will continue to demand payment unless there are exceptional circumstances to grant rate relief to occupiers.”

What it means for you
Pitt explains that business owners are expected to pay rates even if they lodge an appeal. “While the appeal is awaiting negotiation with the Valuation Office Agency, the Billing Authority will continue to demand payment for those rates,” he says. Appeals can be made on various grounds including deterioration of the physical condition of the area where the property is located and reduction in trade due to increased competition in the locality. Pitt adds: “Retailers are in a
better position to seek allowances on a temporary or permanent basis, due to the fluctuating and fragile state of the high street.”

Management: Legal Issues

Management: Legal Issues

Redundancy
What you need to know

Although over the last year or so there have been no significant changes to the laws on redundancy, Martin Searle Solicitors head of employment Fiona Martin reminds employers that the law is highly prescriptive on what constitutes redundancy and advises business owners to be very careful of definitions. For instance, replacing someone in exactly the same job but for less pay is not a redundancy situation.

The latest
To ensure that they act within the law, Martin urges employers to be sure that they follow the correct procedures and to approach all employees sensitively.
“A lot of employees tell us, ‘it’s not what’s done, it’s how it’s done’,” says Martin. She advises that the process should be transparent and should include a consultation phase, to allow for two-way dialogue. “Don’t just inform but consult, so that you can show a process where redundancy really is the last option for your business,” adds Martin.

However, Martin says that recent Employment Appeal Tribunal cases have demonstrated a more employer-friendly approach. For example, in Lancaster v TBWA Manchester it was ruled that the duty to make reasonable adjustments did not require adjusting the redundancy criteria for a disabled employee.

What does it means for you
It is imperative that employers use fair and objective criteria, backed up with hard evidence, in order to be able to show a fair selection process for redundancy, explains Martin. “Doing this will help you avoid employment tribunal claims from those employees you make redundant, while ensuring that your remaining employees will still want to continue working with you.”

Management: Legal Issues

Management: Legal Issues

Payroll
What you need to know

The current payroll system allows employers to issue Pay As You Earn (PAYE) information at payroll year end, however a new system is being trialled by HMRC called Real Time Information (RTI). The new measures are due to be phased in from April 2013 and will become mandatory for all employers by October 2013.

The latest
Ken Davies, director of payroll at Mitchell Charlesworth, an accountancy firm with offices in the Northwest, says the new measures will increase the workload for employers, which will be required to submit data on a more regular basis.

Davies says the trial marks a significant change in the payroll system, which has remained almost unchanged for more than 60 years. “Many businesses will be accustomed to the way their payroll operates,” he says. “We are urging firms to not let news of this new legislation slip through the net.

Employers must be crystal clear on their new obligations.”

What it means for you
“It is essential that firms are up to date with the new payroll system and are ready to comply with the upcoming changes in legislation,” says Davies. “Essentially, RTI will require employers to submit PAYE information electronically to HMRC on or before each pay date. However, for many SMEs time is precious and this new system will ultimately add to the workload. Therefore, it is crucial to get a grip of the new requirements now to ensure payroll systems work effectively in the future. It is vital to the smooth running of any business that staff are paid efficiently and on time.”

Maternity/paternity leave
What you need to know

The key things employers need to know is that under maternity law, expectant mothers are entitled to time off for antenatal appointments. They can also have up to 52 weeks maternity leave. Minal Backhouse, managing director of Backhouse Solicitors, an employment law specialist based in Chelmsford, Essex, says: “Employees are entitled to one year’s statutory maternity leave made up of ordinary maternity leave and additional maternity leave, regardless of length of service. They can also claim statutory maternity pay for up to 39 weeks, the right to return to the same job and priority for alternative employment in redundancy cases. Although the employer also needs to treat other employees fairly too.”

Those taking maternity leave also have the right to request flexible working conditions on return to work and have protection from dismissal, detriment or discrimination because of pregnancy or maternity.

The latest
Although there have been no major changes to the law recently, proposed changes could come into effect in April 2015.

Backhouse says: “On May 16, 2011 the Government published its Consultation on Modern Workplaces, which proposes a new system of shared flexible parental leave. This would mean that fathers would be able to take unpaid leave in order to attend antenatal appointments and parents would be able to take 18 weeks
maternity leave then 34 weeks shared parental leave, which would add up to the 52 weeks that can currently be taken as maternity leave. How and when this shared leave can be taken is what we are now waiting to hear.”

What it means for you
Small employers need to realise that they are not exempt from maternity and paternity law. They should also remember, aside from the basic legislation surrounding leave, employers are obliged to carry out health and safety and risk assessments of the employee’s working environment.

“All employers are under a duty to protect the health and safety of their employees while breastfeeding and pregnant,” says Backhouse. “There are special duties that apply in respect of new or expectant mothers in the workplace.

The Health and Safety Executive has produced a flowchart to help employers with the process.”

Backhouse says employers should also be aware that employees have a statutory right to take time off for dependants, irrespective of their length
of service, or whether they work on a full or part-time basis or are employed on a permanent, temporary or fixed-term basis.

“If, for example, a parent, either male or female, needs time off to sort out a childcare emergency, they are entitled to a reasonable period off to rectify the situation without being penalised,” says Backhouse.

Management: Legal Issues

Management: Legal Issues

FACTS

  • 90% is the average amount a weekly salary is compensated during the first six weeks of maternity leave
  • 4-8% is the estimated amount of eligible fathers who take their full, allotted paternity leave
  • 80% is the amount of data quality problems caused by incorrect employee name, date of birth, or National Insurance Number, which RTI is hoping to fix
  • 30 days is the minimum time to develop a redundancy proposal when there are 20 to 99 proposed redundancies
  • 1 week is the minimum notice of redundancy if an employee is employed continuously for at least one month but less than two years
  • 50% is the top amount of Small Business Rate Relief for businesses with a rateable value of less than £18,000 (£25,500 in London)

 

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