Unfair and discriminatory pay set to continue with this government

Victoria Phillips is head of employment rights at Thompsons Solicitors

Another damning indictment of this government came last month when the High Pay Centre released its report on the pay of CEOs in FTSE firms. The figures clearly show that those at the top are continuing to command ridiculous wages at the expense of the average worker.


Extreme pay has been increasing year-on-year, which now means that a FTSE 100 CEO is paid 183 times that of their average full time worker. While so-called reforms introduced by the Con-Dem coalition in the shape of the Enterprise and Regulatory Reform Act 2013 at least allow us to see the absurd levels of pay, the ‘reforms’ themselves have made no difference.


At the time, the then business secretary, now former MP, Vince Cable, promised that the reforms, which included giving shareholders a binding veto on annual remuneration, would tackle the “disconnect between pay and performance”. Do the beneficiaries of such levels of pay really believe that their contribution to the company is 183 times that of their average employee? Or are they still getting away with paying themselves huge salaries because the legislation was, and is, weak?


Far from tackling the culture of high pay, the High Pay Centre report shows that the top ten CEOs alone were paid £156 million and that the average pay for FTSE 100 CEOs has risen by almost £1 million since 2010. Let’s remember that this is while three quarters of FTSE 100 companies are shamefully failing to pay the living wage.


This is a clear reminder that those in the highest positions are treated very differently when it comes to employment and remuneration. While average pay continues to fall in real terms, as big businesses increase their profit margins by restricting pay at lower levels, the very few are rewarded with ever-growing pay packets.


The last government’s superficial and half-hearted move to encourage shareholders to challenge excessive pay company at AGMs was a failure. Instead of taking it upon themselves to do what is best for the vast majority of employees, shareholders have, too, bought into the morally derelict culture of excessive pay for some, low pay for the rest. So much so that the average vote against remuneration policies at FTSE 100 companies was just 5.9% in 2014.


Shareholders that are eligible to vote on remuneration packages must now show some responsibility and leadership. A survey carried out by the Institute of Directors showed that 52% of their members thought that excessive pay was a threat to public trust in businesses – but an equivalent poll of employees themselves would provide a far more important body of feeling.


It is also a worrying trend that those in the most senior positions are not simply content with dividing themselves from their workforce, but also from one another. 40 years on from the Equal Pay Act, women in executive positions are getting significantly less pay than their male counterparts. According to a survey carried out by the Chartered Management Institute and XPertHR, women in directorships at FTSE 100 companies earn over £13,000 less than their male colleagues and just half of their bonuses. This is despite women in their twenties tending to earn more than men of the same age; an indication that the glass ceiling of gender discrimination is still present once women start to progress into more senior roles.


It is a disgrace that these trends look likely to continue. Certainly they will without a proactive response from this government to reform pay. The pay gap is such that the UK is now one of the most unequal countries in the apparently ‘developed’ world. As many people struggle to get by, it is a clear injustice that poverty wages at the bottom continue to supplement luxury pay at the top.


Cameron’s token gesture on the gender pay gap is an act of weakness

Victoria Phillips is head of employment rights at Thompsons Solicitors

David Cameron’s announcement that his government would end the gender pay gap “within a generation” by forcing companies to disclose their figures could have been a reason for tentative optimism about this government’s attitude to equality and worker’s rights.


Yet, once we take a look at the detail of the policy, we can see that its ambitions are unfortunately as superficial as this government’s ridiculous claims to be the new party of the working person.


If this proposal is the measure of “a really big move” in tackling the gender pay gap it is clear the government is happy treading-water whilst claiming to be swimming the Channel.


Under the new proposals, set out in a consultation document from the Government Equalities Office, the government said that employers in the private and voluntary sectors with fewer than 250 members of staff will be exempted from publishing figures describing the size of the gender pay gap in their organisations. This exemption ensures that 99.5% of all private businesses will be excluded from the new plans. In comparison, similar reporting requirements are triggered at businesses with 150 employees in Austria, 35 in Finland and 24 in Sweden.


In one swoop, this gaping hole makes the policy largely useless, little more than headline-generating flimflam, and shows that the Tories are still failing to face up to the very real issue at hand – that women in companies of all sizes are continuing to face discrimination in their pay packets.


The policy is even more surprising when we recall that it was the Tories who attacked Labour’s plans to introduce pay audits in the first place. Subsequently, in coalition, they passed the Enterprise and Regulatory Reform Act 2013 that actually weakened equality legislation by removing – on the grounds of cutting so-called “red tape” – the ability of a worker concerned that they were being discriminated against to submit an equality questionnaire and find out the true level of the gender pay gap in their organisation.


Yet, aside from the moral argument for equality, the strength of the economic case for equal pay makes it strange that a government so obsessed with GDP growth is showing such little ambition. It is even stated in the consultation that equal pay would generate an additional £600bn for the economy, increasing its size 10% by 2030. Given this can the Tories, who in the coalition government oversaw a rise in child poverty (the first in over a decade) and an unprecedented use of food banks, really afford to address this issue with tokenism?


Thanks to union campaigning, the Equal Pay Act was brought in by a Labour Government in 1970. Now the Equality Act 2010 is supposed to ensure equal pay but the government’s failure to properly enforce it means the legislation remains weak.


Employers who discriminate based on gender are already breaking the law and it is therefore difficult to understand why the number of private businesses required to publish their records under these new proposals is so low. Is it too much to ask that the government properly enforces the law already in place? Sadly this move is simply nowhere near enough to effect real change, to ensure that women’s right to equal pay is respected, and to contribute to the economic boost that equal pay would no doubt bring.


Cameron’s token gesture is an act of weakness. Thompsons will continue to work with unions to campaign for gender equality in the workplace and will never shy away from representing workers who have been discriminated against on account of gender, race, sexuality, disability or age.

Workplace injuries cost billions and ruin lives, but this government is determined to rollback vital health and safety laws

Victoria Phillips is head of employment rights at Thompsons Solicitors

The ground-breaking Health and Safety at Work Act is 40 years old and there has been a lot of progress over the years which should be celebrated. Britain is one of the safest countries in the world for workers and HSE statistics show that fatalities at work are on the decline.


But there is no cause to rest on our laurels. The most recent statistics show that for those 133 workers who were killed last year and anyone who took any of the 28.2 million working days lost to work-related ill health or injury, injury, ill-health and death at work are not a thing of the past.


As those concerned with improving the statistics further reflect on the successful impact of the Act over the years, this government is moving health and safety backwards. It’s now de rigueur for Tory MPs and ministers (ably assisted by their Lib Dem stooges and their mates in the media) to lampoon health and safety and dismiss anything associated with it as “red tape”.


Any death and any injury at work is a tragedy. At Thompsons we know how unnecessary and how avoidable they almost always are. Avoidance isn’t rocket science, it’s often blindingly basic.


No government should rest on its laurels. Certainly, no government should take action that could risk a deterioration in health and safety and yet that’s exactly what we are witnessing. It’s a dismissive arrogance of the worst kind.


It appears that laws introduced and respected by the courts since the times of the Victorian factory can be thrown aside. Strict Liability can be junked and self-employed workers removed from health and safety laws. Written agreements with insurers to stitch up mesothelioma sufferers and their families (over 2,500 people died of the fatal cancer mesothelioma, caused by exposure to asbestos last year) are pushed through parliament. Misstating the words of the Professor you appoint to review health and safety is fine if you can get away with it (which thankfully due to some good old fashioned leaking they haven’t).


The insurers are happy (a billion £’s in dividends from two car insurers when there’s meant to be a so-called whiplash fraud ‘crisis’). Lawyers being slapped down and straight jacketed into deals that limit their ability to get the maximum amount of compensation is dressed up for the media as a great advance. The judicial establishment get their wish for injured people to ‘have some skin in the game’ – i.e. face deductions from compensation to pay their lawyers – and all the while backbenchers can belittle and scoff and make health and safety a joke. You can even feed them red meat by seeking to blame it all on those pesky Europeans.


At a time when the battle for proper health and safety is gradually being won the last thing we need is a government more concerned with winning favourable headlines in tabloids and currying favour with powerful corporate interest groups than taking proactive steps to ensure that workplace injury and ill-health really become things of the past. But that’s what we’ve got and the battle goes on.


In the grip of a low pay epidemic

Victoria Phillips is head of employment rights at Thompsons Solicitors

The Work Foundation recently published its final report on the prospects for workers earning less than £15,000 a year.


Readers of the study can only be appalled that low pay now affects a staggering 5.1 million employees (21 per cent of the UK workforce) and that over a quarter of these workers will remain stuck in low pay for over a decade.


When the National Minimum Wage (NMW) was brought-in in 1999, it was one of the most significant planks of Labour policy. But the current Tory-led regime has failed to give it the status it deserves. Serial offenders have been left to get away with NMW non-compliance and the government has chosen to severely under resource the teams who enforce it.


The scale of the UK’s low wage epidemic is a deliberate product of this government’s anti-worker agenda. The mantra that employment prospects are looking up appears shaky when you consider the detail. The reduction in unemployment has been fuelled by a rapid increase in the number of people identifying as “self-employed”, while many others have been forced into part-time and zero hours work where they had previously worked full-time.


Serious wage deflation means that increasing numbers are being pushed to take low-paid work that is near-impossible to survive on, with many workers having to begrudgingly seek the help of the state benefits system – not to mention food banks – to keep their families fed, clothed and housed.


The Work Foundation’s report makes worthwhile recommendations for how the UK can pursue a fairer wage distribution and begin the fight back against Conservative Party policy and the parochial interests of the big business lobby who control it.


One obvious step, the report suggests, would be for the government itself to set best practice by having its departments and local authorities aiming to become Living Wage employers. Unless the government gets its own house in order there is little hope of encouraging the private sector to do so.


Another simple move would be for the Low Pay Commission to increase the NMW at a faster rate than average earnings over the next few years. If the economy is really recovering then it is crucial that those at the bottom of the pay scale should be able to feel the effects not just those at the top.


Unions are leading the way to fight the low pay epidemic in the national interest. We must all continue to do so.


The full Work Foundation report can be read at http://www.theworkfoundation.com/DownloadPublication/Report/365_BottomTenMillionFinalPaper.pdf


Few Dads take Paternity Leave

Victoria Phillips is head of employment rights at Thompsons Solicitors

A new report has found that just ten per cent of new fathers currently take more than two weeks of paternity leave, just months before Shared Parental Leave comes into effect from next year.


The shared parental leave scheme will, for the first time, allow eligible mothers and their partners to take up to 52 weeks of leave in total, to be shared between them either in alternating blocks or taken together.


However, “Shared opportunity: Parental leave in UK business” found a number of cultural and financial differences explaining the low level of take up from Dads, and makes for sorry reading for anybody who believes in gender equality.


The report found that a father taking paternity leave was culturally less acceptable in many organisations. 63 per cent of employers were supportive of mothers taking up to a year’s maternity leave but even two weeks paternity leave was only supported by 58 per cent of employers.


Almost half of the employees surveyed and 58 per cent of managers said that parental leave was disruptive for their organisations. Three quarters of managers felt parental leave affected the efficiency and productivity of their teams and at managerial level just two per cent opted to take the leave they are currently entitled to.


The findings may be hardly surprising when it appears that fathers are paid significantly less on average by their employers when on leave. While 70 per cent of new mothers received full pay for between one and 38 weeks of maternity leave, just nine per cent of new fathers received full pay for longer than two weeks when on paternity leave.


This “paternity pay gap” not only creates practical financial barriers to the concept of shared parental leave, it also projects a negative cultural expectation (that women are the ones likely to take extended periods away from the workplace) and that has the potential to impact detrimentally on their career progression.


We are on the verge of welcome changes in legislation, but rights are only of use if there is an understanding that they are there to be used and using them has no negative implications for the user. Sadly it appears there remains an ingrained view in many organisations that childcare is for mothers and that reflects badly on ‘modern Britain’.


To access the Institute of Leadership and Management, please visit: https://www.i-l-m.com/~/media/ILM%20Website/Documents/research-reports/shared-leave/ilm-shared-parental-leave-report%20pdf.ashx

New ACAS guidance for those who experience discrimination

Victoria Phillips is shortlisted for this year’s UnionHome writer of the year

The Thompsons Solicitors blog for UnionHome


In what was disguised as another slashing of ‘red tape’ in the Enterprise and Regulatory Reform Act 2013, the government decided to do away with a vital questionnaire for jobseekers and employees who think they may have been discriminated against by an employer under the Equality Act 2010.


After 6 April, this convenient way of dealing with discrimination in the workplace will be no more.  That 83% of those consulted about the questionnaire opted in favour of keeping it clearly meant nothing to this government who are ideologically disposed to cutting protections for workers, regardless of their importance for employee well-being.


The current process allows workers to request information from their employer about their complaint on a standard questionnaire form, which can be sent to the employer any time before they lodge their tribunal claim or within 28 days after lodging it.


If the employer fails to answer the questions within eight weeks or replies in a way that the tribunal considers to be evasive, it can draw an inference of unlawful discrimination. 


However, although this questionnaire is being withdrawn, there is obviously nothing to stop potential claimants from putting questions to their employer to further a potential discrimination case.  In anticipation of the withdrawal of the questionnaire, ACAS has drawn up a simple six-step template to follow:


  1. the employee should set out their details and that of the person they want to answer their questions 
  2. the employee should set out the protected characteristic under the Equality Act (race, sexual orientation, religious beliefs etc.)  that they consider has been affected. 
  3. the employee should describe what happened to them 
  4. the employee should set out the type of discrimination they have experienced 
  5. the employee should say why they think it was unlawful 
  6. the employee should outline any further questions they would like to ask 

    Moreover, although tribunals will no longer have a statutory right to draw an adverse inference, there is nothing to stop them from doing so if the employer does not reply or is evasive in their answers.


    Potential claimants should, in any event, use the employer’s grievance procedure, or other internal dispute resolution mechanism before lodging their claim with a tribunal. If that doesn’t resolve the issue, ACAS provides a free “Early Conciliation” service which may avoid the need to make a claim.


    To read the ACAS guidance, go to: http://www.ACAS.org.uk/media/pdf/m/p/Asking-and-responding-to-questions-of-discrimination-in-the-workplace.pdf

Zero power for workers on zero hours contracts

Victoria Phillips is head of employment rights at Thompsons Solicitors

The Thompsons Solicitors Union Home blog


Following an informal information gathering exercise last year, the government recently announced a consultation on zero hours contracts to investigate the extent of their use and abuse by unscrupulous employers.  Many union members will already know the answer.


Workers on zero hours contracts go without even the most basic employment rights. They are expected to be available as and when they are needed but without any guarantee of paid work. They can be sent home without warning and often receive no holiday or sick pay.  Even more shocking is the use of ‘exclusivity clauses’ which ban the employee from taking employment elsewhere -even when no work is available.


Employers take advantage of the fact that zero hours contracts are not properly defined in law so there is a serious lack of transparency around the terms and conditions under which workers are employed; conditions which place the balance of power overwhelmingly in favour of the employer.


And, it is worrying that the government doesn’t know how many people are currently employed on zero-hours contracts.Estimates vary wildly – it could be anything between 250,000 (Office of National Statistics) and 1 million (Chartered Institute of Personnel and Development).


As part of its consultation, the government is seeking views on the abuse of exclusivity clauses and on the various terms and conditions under which those on zero hours contracts are employed.  The consultation also includes proposals to introduce measures to avoid abuse and to provide guidance on the fair use of zero hours contracts.


To fight the cost of living crisis staring the UK in the face, it is vital that abuse from unscrupulous employers,who put profits ahead of the basic welfare of their workers is tackled head on. While we may be encouraged that this consultation has been opened, it is hard not to dismiss it as a way for the government to put an issue that requires immediate redress on the back burner.


Given this government’s record on tackling employment rights, we should be sceptical as to whether the consultation will lead to real action to tackle zero hours contracts once and for all.


To submit your view on the consultation (which closes on 13 March), click here:

Handling small-scale redundancies

Victoria Phillips is head of employment rights at Thompsons Solicitors

The regular Thompsons Solicitors blog


British workers are feeling less secure than at any time in the past 20 years.


Below-inflation pay cuts are creating a cost of living crisis whilst under-employment and more precarious working terms are becoming the norm for many. Redundancies or the threat of them are a weapon used too casually by employers looking to save money and increase profits in uncertain times, particularly in non-unionised workplaces.


This is why it is timely for Acas, the conciliation and arbitration service, to publish new guidance that gives employers advice on how to handle small-scale redundancies. However, it’s a given that no unscrupulous employer will make any effort to inform employees of their rights and the proper legal process, so the guide can also be used by employees to insist on that happening.


Despite this Government slashing the redundancy consultation periods, there are still minimums. Where an employer is proposing to make 20 or more employees redundant within 90 days, they must consult with their employees on the changes at least 30 days before the date of dismissal. The consultation period for more than 100 people is a minimum of 45 days.


However most redundancies number less than 20 workers which means there is no minimum consultation period, and in most private workplaces no union representation to guide them through.


‘Handling small-scale redundancies – a step-by-step guide’ is aimed particularly at small and medium sized businesses that are considering making fewer than 20 people redundant.


Acas rightly advises employers to first consider alternatives to redundancies such as offering flexible working, stopping the recruitment of new workers, retraining staff to facilitate new areas of growth, or reducing or ending overtime. If these are not openly considered and offered, workers might want to refer to the guide and ask their employer why.


However, if the alternatives have been looked at and rejected, Acas recommends a seven step plan:

1.           Brief managers to make sure they are prepared to effectively handle a testing redundancy situation

2.           Talk to staff – it is a legal requirement to consult with each affected staff member individually, not only those who might face redundancy

3.           Be careful in how staff are chosen for redundancy using clear criteria for which posts may have to go

4.           Talk about redundancy notice and pay – this can help reassure staff

5.           Consider notice period rights and what time off workers are allowed to take to look for other work

6.           Uphold a staff member’s right to appeal

7.           Think about the future of the business and make the best use of remaining staff


Good employers should already be aware of what is legally required and what is considered proper ethical behaviour. However, some employers seek to ignore the law or whinge that it is too complicated and weighted against them. Acas’ simple guide, while a good antidote to their excuses and useful information for workers and their representatives, is ultimately no replacement for union representation.


To access step one of the guide, click here

Government advice to interns fails to address the root cause of their exploitation

Victoria Phillips is head of employment rights at Thompsons Solicitors

The Thompsons Solicitors UnionHome blog


Internships have become a way for unscrupulous employers to undermine and evade the National Minimum Wage (NMW) and the government has recently published new guidance for interns with the stated aim of helping them to protect their right to fair pay.


A new video and posters attempt to explain to interns what their rights are in relation to NMW, where to go for more information and what action they can take if they feel they have been exploited.


Alongside the new guidance, HM Revenue and Customs (HMRC) – who are meant to enforce NMW on behalf of the government – will send out letters to 200 employers who have recently advertised internship opportunities and unpaid work to notify them that checks will be carried out to make sure that employers are remunerating interns in line with the law.


So far so positive but the government is still far from being able to guarantee the end of interns’ exploitation.


Recently Unite said it will be writing to HMRC to report that a third of the UK’s top 50 charity employers are using unpaid interns – despite the government’s previous attempts to enforce a code of conduct for the use of interns across all sectors.


Unite’s move follows its report in May, made with Intern Aware, Interns in the voluntary sector – time to end exploitation, which showed the extent to which charities are using ambiguities in NMW legislation to avoid paying their interns.


The sad fact is that, however much the government seeks to inform interns about their rights and encourage employers to implement best practice, the NMW regime is too easily ignored.


Many un-paid internships are already illegal. As the government’s new material states: ‘if the intern has a list of duties they have to fulfill and fixed times when they have to work, the intern is likely to be a worker and entitled to be paid’.


And yet despite the law many interns are doing a job of work and are carrying out the same duties as permanent employees in the same office – except without the pay they are legally entitled to or the likelihood of securing a paid role once the internship ends.


What interns – and anyone else in low paid work – really need is a National Minimum Wage regime that is both robust and properly enforced to make sure that wage exploitation by employers is made far more difficult.


Filtering “common sense” to benefit the employer

Victoria Phillips is head of employment rights at Thompsons Solicitors

The Thompsons Solicitors blog


David Cameron has stepped up his campaign against worker’s rights by asking for a “common sense filter” on EU ‘red tape’.


A business task force commissioned by the government and made up of only employer representatives has identified 30 priority areas where EU regulations are said to be a barrier to economic growth, from ‘excessively strict’ food labeling to health and safety assessments.


The report is predicated on the basis that anything that protects people, such as workers’ rights, data protection and even controls on clinical trials for new medicines is a costly ‘encumbrance’.


EU regulations on employment rights apparently cause ‘a huge headache’ for employers and the “common sense”. The solution? Attack the rights of working people.


The report suggests, amongst other things scrapping proposed protection for British workers sent to other EU countries, removing the rights of agency workers – an increasingly common feature of the employment market in rapidly privatising public services – to equal pay with non agency staff, and stopping measures that would make abuses of work experience by employers illegal.


Singled out for particular attack by the taskforce is the Working Time Directive (WTD) because of ‘problems’ caused by European Court rulings that have ‘expanded the original scope of the legislation’.  It’s a familiar refrain as it parrots the government’ line in its consultation on the issue in May 2011.


The report’s self justificatory line that employment and health and safety laws simply represent a burden to business and bring no benefit is familiar stuff from this government and its mates in business but marrying that rhetoric with “common sense” is dishonest as good employers are well aware.


Read the Labour & European Law Review on the Business Taskforce report “Cut EU red tape” – http://www.thompsonstradeunionlaw.co.uk/information-and-resources/lelr/weekly-342.htm