UK Unemployment

Labour Market Statistics
March 21 2013 – The unemployment rate stands at 7.8% – unchanged over the quarter and 0.5% down over the year. 29.73 million people were in work in November 2012 to January 2013 according to the labour force survey (LFS). The number of people employed was 131,000 higher this quarter and 590,000 higher than last year.

The working age employment rate is 71.5% – up 0.3% on the last quarter and up 1.1% over the year.

ILO-defined unemployment in November 2012 to January 2013 was 2.52 million (7.8%) – up by 7,000 on the previous quarter but down 136,000 on the same quarter last year.
The claimant count for key out-of-work benefits was 1,542,000 in February – down by 1,500 on the previous month and down 67,500 on the year.

Earnings growth over the year weekly pay in January 2013 (including bonuses) was 1.2%.
Mark Hoban, Minister for Employment, said:

“It’s a credit to businesses that the private sector is employing one and a quarter million more people than when this Government took office, helping us compete in the global race.

“Today’s figures show that against a difficult economic backdrop we’re helping people to move off benefits and into work.

“There are still tough challenges ahead which is why we’re working hard to give jobseekers all the help and support they need to realise their aspiration of finding a job.”
Mark Beatson, Chief Economist at CIPD commented:

“This month’s figures continue the trend that we have seen for the last year or so. The number of people employed has increased again to record levels – although the employment rate still remains below its pre-recession peak – and this has happened during a period when we have seen little evidence of economic growth. The number of unemployed people has increased slightly but this could be the result of welfare to work changes intensifying job search activity among those out of work and claiming benefits, and in the long term this should be beneficial to the economy by boosting labour supply.

“One of the explanations as to why employment has continued to grow is the declining real value of earnings. The annual rate of growth of average earnings was 1.2% in January, which was 1.5 percentage points below the rate of inflation. As a result, those in work continue to see their living standards squeezed.

“It will be interesting to see whether the forecast accompanying today’s Budget from the independent Office for Budget Responsibility anticipates employment growth on this scale to continue when economic growth resumes, or whether they expect productivity to increase and more moderate rates of employment growth.

“The employment figures for 16-24 year olds remain a matter for concern. The total number of unemployed 16-24 year olds has increased since last month’s figures. Young people appear to be missing out on the jobs growth we have seen, risking the future supply of talent and potentially leaving a permanent scar on the UK labour market. The mismatch between young people’s behaviour and employer expectations at the recruitment stage is part of the problem and via our Learning to Work programme we are seeking to address this disconnect.”

TUPE – What businesses need to know about the retention of employment model

November 1 2012 – The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) give domestic effect to the EC Acquired Rights Directive (ARD) on “the approximation of the laws of Member States relating to the safeguarding of employees’ rights in the event of transfer of undertakings, businesses or parts of undertakings or business.”

In essence the underlying purpose of TUPE is to protect employee rights in the event of a transfer or service provision change. This is secured by the statutory novation of the employee’s contract of employment.

The RoE Model
The Retention of Employment model (RoE) was originally developed by the Department of Health (DoH) in response to UNISON campaigning several years ago on Private Finance Initiative (PFI) schemes. UNISON negotiated the RoE model as a means of limiting the number of non-clinical staff forced to transfer to the private sector from the NHS under PFI.

In summary the RoE model works as follows:

Stage 1
Employees opt-out of the transfer of their employment under regulation 4(7) of TUPE. The employees must be properly informed of their situation and be freely objecting (see Senior Heat Treatment -v- Bell [1997] IRLR 614, EAT). The objection can be given either to the transferor (generally the public sector employer) or to the transferee (the incoming private sector provider). A model Notice of Objection appears in the box below.

Stage 2
If employees opt-out under TUPE, their employment terminates immediately by operation of law and automatically on the date of the transfer. They have not been dismissed and are legally in the same position as if they had resigned.

Stage 3
However, under RoE the employees are then immediately re-employed by the public sector employer on the same terms and conditions of employment as they previously enjoyed with continuity of service preserved for all purposes, including pension rights.

Stage 4
The final stage in the RoE model is for the employees to be seconded to the private sector provider, but remain employed by the public sector employer. It may be necessary to change the relevant employees’ terms and conditions of employment to make express provision to allow for secondment.

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The Hidden Cost of Sick Leave

October 17 2012 – Although the holiday season has ended the holiday pain has not for those employing individuals on long term sick leave.

Thanks to European law, employees in the United Kingdom can now save up holiday leave entitlement accruing to them whilst on sick leave and take it when they are well enough to return to work. They can also claim to carry over this holiday leave to the following holiday year for a reasonable time thought, following European cases, to be about three months. If the employee’s employment terminates during sick leave, they will be entitled to payment in lieu of holiday.

So, if an employee has been on sick leave for a year and has a holiday allowance of six weeks per year, when they return to work the following year, they may be entitled to 12 weeks holiday leave.

One of the major causes of sick leave is stress. Stress triggers are on the rise and just reading the news can be stressful at a time when few have confidence in their job security. Money troubles at home place domestic relationships under pressure. Anxiety and tensions heightened outside work can disable the ability to concentrate and cope with the normal demands of the workplace. Once an individual is diagnosed with depression, the employer is legally obliged both under employment and health and safety law to take steps to reduce normal work pressures and to offer support.

Employers carry a financial and moral burden. If full pay is continued for a time after an employee goes on sick leave, it is often a difficult decision to curtail that arrangement, particularly when the employee is known to be depressed or anxious about money worries. Another cost is the hiring of temps to cover sick leave. If the funds are not there it is common for work colleagues to be asked to take on the additional burden of covering for their fellow worker and this can in turn cause colleagues to be stressed or unhappy about workload.

There is also an issue of trust. Employees on long term sick leave may neglect to apply for holiday leave if they are taking holiday whilst off sick, perhaps taking the view that a trip abroad is therapy for their illness and not really holiday. If it comes to the attention of the employer that the employee has gone to Spain for a fortnight and not applied for holiday, this can affect trust and also cause the employer the administrative burden of an investigation if the employee disputes that the travel amounted to holiday.

Where the illness qualifies as a “disability” under the Equality Act 2010, the employer is normally obliged to obtain a medical opinion from an advisor to identify what reasonable adjustments the employer should be considering making, to support that person so that they can continue or return to work. For many employers this will mean referring the employee to an independent occupational health specialist at a cost of around £500. This can be problematic as the specialist is unlikely to meet with the employer but will meet with the employee. This means it is not uncommon for the specialist to hear, and be persuaded by, the employee’s perspective on their health and ability to work, without properly understanding the employer’s. Employers should make it a priority to communicate with the specialist, in advance of the patient review, to ensure that the specialist has a clear understanding of the requirements of the employee’s role, the nature of the work environment and the constraints upon the employer to modify these features.

For example, if the employee is a Sales Executive on sick leave for depression, exacerbated by stress and the employer must increase the employee’s sales targets by 15% or the business goes under, it may not be feasible for the employer to hold the employee’s job open or to enable the employee to return on reduced targets or hours. If the specialist does not know the financial pressures on the business they may advise a reduction of the Sales Executive’s targets to reduce stress. The employer, upon receipt of the specialist’s advice to reduce targets, will be on the back foot, explaining why they reject the advice on business grounds. This can lead to unpleasant and unhelpful disputes between the specialist and the employer, which can undermine the relationship of trust with the employee.

The current economic troubles mean employers should be looking to make their contractual terms and employment policies as recession-proof as possible. Policies that may have been sustainable in boom times may be impracticable now.

If the employer pays over and above statutory sick leave, can they afford to do this and, if so, have they retained the ability to stop such payments? Does the sick pay policy set out how any discretion is exercised and, once exercised, the circumstances in which the discretion to pay sick pay will be reviewed and stopped and on what notice to the employee?

Does the employer restrict the ability to carry over holiday from one year to the other and, for those on sick leave, is the ability to carry over restricted to the minimum holiday allowance permitted under statute, rather than any enhanced holiday allowance under the contract?

If the employer operates a bonus scheme, is the entitlement to bonus moderated if the employee is on sick leave for a lengthy period of time?

Are employers engaging in home visits? These are valuable to monitor the progress of the employee and to signal to the employee that they are of value so that a relationship of trust is maintained, conducive to honest discussions about the employee’s recovery and the likelihood of returning to work within a reasonable time taking into account the needs of the business. The employer should also consult regularly with their employees covering for sick colleagues to ensure that they are not over burdened.

The UK government is concerned about the way in which the European Court of Justice has interpreted the holiday entitlement of those on sick leave, and there is a conflict between the Working Time Directive and the UK’s Working Time Regulations. This is currently under review. Most employers though will wish to avoid legal disputes with employees about the interpretation of the conflict between UK and European law. Instead it is more pragmatic to communicate clearly with employees about the economic pressures that the employer is experiencing, what the employer can and cannot afford to do if an employee goes on sick leave and to maintain a regular and candid dialogue with the employee during sick leave. This must be done whilst ensuring that employment contracts and policies are able to withstand the current vagaries of European law and enable the employer to make decisions that are fair both to the employee and the stability of the employer’s business.

Religious discrimination

16 January 2013 – The European Court of Human Rights has heard four cases of religious discrimination from the UK, of which three were found not to be violating the rights of the employee. However, the court ruled in favour of British Airways worker Nadia Eweida who was deemed to have had her rights violated under Article 9 of the European Convention on Human Rights.

HR experts Croner have advised employers to have robust, justifiable reasons for restricting the wearing of displays of religious faith such as crosses.
According to Liz Iles, Senior Employment Consultant at Croner:

“The decisions in the case of Eweida & Others v UK today shows that there must be a balance between an employee’s wish to display their religious beliefs and a sound rationale why they might be restricted.”

What this means in practice is that employers must have good justifiable reasons why, for example, employees can’t wear a cross at work. A good example of this is demonstrated by a connected case heard at the ECHR today. Nurse Shirley Chaplin was told by her employer that she couldn’t wear her cross around her neck as it posed a health and safety risk. This was held to be a legitimate justifiable reason.

“The ECHR decision in the case of Nadia Eweida was based on special circumstances, including the fact that a discrete cross would not have adversely affected British Airways’ public image.”

While these court judgements may be hard for bosses to interpret when making controversial decisions, for many employers it will make it easier to agree to employee requests rather than risk a complaint. However, employers are advised to explore all options available to them as alternatives when faced with an objection from an employee, especially as sensitive as one related to their religion or belief.

“What is not apparent in the ECHR decision is the position in relation to third parties. For example, it may be that a member of the public or a colleague might be offended by the display of religious faith and may themselves make complaints.”

Is Employees Health Important For A Business

I think we will all agree that the health of employees are very important, both morally and for business reasons, but who should take the lead on ensuring that they remain in good health?

More employers are planning to use financial penalties to motivate their employees to participate in corporate-sponsored health and wellness programs, according to a recent survey published by Lincolnshire, Illinois-based Aon Hewitt.

Do you think it is appropriate for employees to potentially be faced with financial penalties from their employees or is it business interfering to much?

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Danger of the desk

July 3 2012 – A small-scale study reported recently that, while men are generally more prone to heart disease, women seem more susceptible to coronary risks from emotional stress. The study from Penn State College of Medicine by Charity L. Sauder, Alison E. Thompson, Terrell Myers, and Chester A. Ray, looked at the effects of mental stress on blood flow through the heart.

They found show that coronary blood flow increases in men subjected to mental stress but does not change in women. In the experimental situation they used, both sexes showed an increase in heart rate and blood pressure. Previous studies showed that men had significantly lower flow during physical stress from exercise showed. This offers an explanation to why women may be more susceptible to adverse cardiac events when they are placed in mentally stressful situations.

How work stress can lead to coronary heart disease Research from University College, London published in the European Heart Journal in 2008 threw some light on how work stress is linked to the onset of coronary heart disease (CHD) either by directly activating stress pathways controlled by interactions between the nervous system, endocrine glands and their hormones (neuroendocrine mechanisms), or indirectly through the association between stress and unhealthy lifestyles. The research is part of the Whitehall II study, led by Sir Michael Marmot, professor of epidemiology and public health, which has been following 10 308 London-based civil servants since 1985.

Lead author Tarani Chandola, senior lecturer in the department of epidemiology and public health said:
“Stress at work is associated with an increased risk of coronary heart disease but the mechanisms underlying this association have remained unclear until now. This study addressed three questions:

1. Is the accumulation of work stress associated with higher risks of incident CHD and risk factors?
2. Is this association stronger among working-age populations?
3. Does work stress affect CHD directly through neuroendocrine mechanisms, or indirectly through behavioural risk factors for CHD, or both.”

Researchers analysed data on the incidence of and mortality from CHD, non-fatal myocardial infarctions, angina, heart rate variability, morning rises in levels of the “stress” hormone cortisol, the metabolic syndrome (a combination of high waist measurement, high fasting glucose, high triglycerides, high HDL cholesterol and hypertension associated with increased risk of heart disease and diabetes) and behavioural risk factors (such as diet, exercise, smoking and drinking).

Tarani Chandola commented:
“During 12 years of follow-up, we found that chronic work stress was associated with CHD and this association was stronger among both men and women aged under 50 – their risk of CHD was an average of 68 per cent more than for people who reported no stress at work. Among people of retirement age (and therefore less likely to be exposed to work stress), the effect on CHD was less strong.”

Researchers explained that the most significant new findings linked work stress with biological mechanisms underlying CHD. The autonomic nervous system (ANS) that regulates involuntary actions, such as that of the heart via the vagus nerve, has a central role in neuroendocrine stress responses. The study found that workers who suffered from greater stress were more likely to have lowered heart rate variability and poor vagal tone. They also found that another major part of the neuroendocrine system – the hypothalamic-pituitary-adrenal axis – was affected, demonstrated by raised morning levels of cortisol in stressed workers. These results held true after adjusting for behavioural risk factors.

Tarani Chandola said

“Adjusting for health behaviours did not change the association between work stress and low heart rate variability, suggesting a direct effect on the ANS and neuroendocrine function, rather than indirect effects through health behaviours. The effect on the ANS and neuroendocrine function in turn affects the signals to the heart, leading to cardiac instability.”

Researchers also found an association between work stress and poor health behaviours that could lead indirectly to CHD.


Tarani Chandola concluded:
“There have been relatively few studies that have found an association between work stress and unhealthy behaviours. Work stress is associated with a poorer diet in terms of eating less fruit and vegetables, and less exercise. It has also been linked to problem drinking, although not in this study. In this study, around 32 per cent of the effect of work stress on CHD could be explained by its effect on health behaviours and the metabolic syndrome.”