Hand Morgan & Owen Employment Bulletin – June 2016

HMO Employment Bulletin – June 2016

 

THE NATIONAL LIVING WAGE

From 1 April 2016 the National Living Wage came in to effect.

In reality this is not a great deal more than an adjustment of existing provisions for the National Minimum Wage. From the 1 April there will be five Minimum Wage rates;

• £7.20 per hour for workers aged 25 or over (the National Living Wage)
• £6.70 per hour for workers aged 21 to 24
• £5.30 per hour for workers aged 18 – 20
• £3.87 per hour for workers aged under 18
• £3.30 per hour for apprentices aged under 19 or over 19 but in the first year of their apprenticeship.

The changes have been accompanied by a substantial increase in the penalty to employers who fail to pay National Minimum Wage, this has been doubled from 100 to 200% of the underpayment and a potential penalty charge of up to £20,000 for each member of staff underpaid.

At the same time the Department for Business, Innovation & Skills has issued a 55 page guidance booklet on the National Living Wage and calculating the Minimum Wage which can be found on this link ;https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/529399/bis-16-301-nmw-calculating-minimum-wage.pdf

COMPENSATION LIMITS INCREASE

The Employment Rights (Increase of Limits) Order 2016 the following changes were made in respect of compensation payments with effect from 6 April 2016;

• The maximum calculation for a week’s pay (for example to calculate the statutory redundancy payment or a basic award for unfair dismissal) increases from £475 to £479.
• The maximum compensatory award for unfair dismissal increases from £78,335 to £78,962.

ENFORCEMENT OF EMPLOYMENT TRIBUNAL AWARDS

In a busy quarter the Department of Business Innovation & Skills has also published a form for claiming penalties from employers for non payment of Employment Tribunal Judgments (and settlements). Under the Employment Tribunals Act a Claimant who has not been paid their Employment Tribunal Judgment can ask the Department of Business Innovation & Skills to issue a penalty equivalent to 50% of the outstanding amount, subject to a minimum of £100 and a maximum of £5,000. Of course if a reason for non payment is the solvency of the employer, such steps are unlikely to assist the employee.

Employment Tribunal Judgments that are unpaid can be enforced through the County Court. As with County Court Judgments, these can be transferred up and enforced by High Court Enforcement Officers (Three solicitors at this firm are High Court Enforcement Officers) . Working in partnership with Penham Excel Enforcement Agents this is a service this firm provides to its clients and more information can be found on the following link http://www.highcourtenforcementofficers.com/high-court-enforcement/tribunal-award-enforcement/

RESTRICTIVE COVENANTS

Drafting terms to restrict employees from acting in competition following the termination of their employment is a tricky task at the best of times. The recent High Court case of Bartholomews Agri Food v Thornton reiterated the principle that for such terms to be enforceable they have to be reasonable at the time that the employee entered in to them.

The fact that an employee subsequently works his or her way through the ranks of a business would not retrospectively make these covenants enforceable.

In this particular case the employee had joined the business as a trainee agronomist with no experience of customer contacts when restrictive covenants were imposed on him. These were held unenforceable (also because of the rather wide drafting of the terms) notwithstanding that at the time of termination he was fully qualified and advising a number of the business’s clients on issues such as crop planting, rotation, seed choice and soil conditions.

A further development of this issue is the Business Secretary Sajid Javid announcing a call for evidence seeking opinions on these clauses with a view to investigating whether they obstruct entrepreneurs.

20 June 2016

If you would like to read other articles, fact sheets and bulletins on Employment Law go to our Employment page.

For advice and assistance in respect of Employment matters contact Nigel Pepper, Consultant or Patrick Nelson, Associate on 01785 211411.

Disclaimer
The contents of this article are for the purpose of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.(50587)

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