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HR & EMPLOYMENT LAW Jackie Le Poidevin, Editor-in-Chief, HR Adviser |
Watch Out for Higher Protective Awards from this Month
On 20 January, the employment tribunals will gain the power to increase a protective award by up to 25% when employers fail to follow the ‘fire and rehire’ Code of Practice. So how will this work and how could it affect you?
What’s the Current Position?
The Code of Practice on Dismissal and Re-engagement came into effect in July last year. It sets out the steps you should take when consulting employees about proposed changes to their terms and conditions. It also gives recommendations on how to minimise the so-called practice of fire and rehire. This is when an employer dismisses employees who don’t accept changes to their terms and conditions and offers to re-employ them under the new, worse terms.
Employees can’t bring a standalone claim for breach of the Code of Practice. However, if you dismiss an employee for refusing to agree to new terms and conditions, they may reject your offer to re-engage them and bring an unfair dismissal claim. If this is successful, the tribunal can increase their compensation by up to 25% if you haven’t followed the Code.
What’s Changing?
The Conservative Government published draft legislation which would also have empowered the tribunals to increase protective awards by 25% if you failed to comply with the Code of Practice. Due to the General Election, though, this fell by the wayside and is only now being enacted.
So, what is a protective award? This is compensation of up to 90 days’ gross pay per affected employee if you fail to comply with the requirement to collectively consult when you’re proposing to dismiss 20 or more employees in a 90-day period. This obligation kicks in not only in large-scale redundancy exercises but if employees’ refusal to accept detrimental changes to terms and conditions could result in a wave of dismissals.
What Impact Will this Have?
This change puts extra pressure on employers to comply with the Code of Practice on fire and rehire. If you fail to engage in meaningful consultation with employees and any representatives, including exploring alternatives to dismissal and re-engagement, you already face a 25% uplift to any unfair dismissal awards. If 20 or more employees are affected by your plans, you will now also face protective awards of more than 90 days’ pay per employee if you breach the Code.
The Future
This isn’t the end of the story. The Labour Government has been consulting on the possibility of increasing the protective award to 180 days. Also, if the Employment Rights Bill is enacted in its current form, it will only permit changes to employees’ terms and conditions in exceptional situations, such as where a business is at risk of going bust. In the vast majority of situations, dismissing an employee for refusing to accept changes to their employment terms will be automatically unfair.
What to Do Now
The changes set out in the Employment Rights Bill are unlikely to come into force until at least 2026. However, from 20 January this year, you should take extra care to follow the Code of Practice if you’re considering detrimental changes to employees’ terms and conditions.
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HEALTH & SAFETY Emma Lampka, Editorial Board Member, Health & Safety Adviser and Risk Assessment & Compliance |
Company Fined £500m+ for Life-changing Accidents: 9 Tips to Comply with Your Duties on Work Equipment
Failing to manage work equipment risks can lead to devastating injuries, hefty fines, and damaged reputations, as seen in David Wood Baking Ltd’s £573,344 penalty after three workers suffered life-changing accidents. To avoid such tragedies, organisations must ensure their machinery is properly maintained, guarded and inspected. By following 9 practical safety tips, you can protect employees, comply with the regulations and prevent costly penalties – creating a safer and more efficient workplace for everyone.
The Case
Three workers were injured when using machinery at David Wood Baking Ltd, Bolton. The injuries sustained were open fractures associated with being drawn into a conveyor belt, entrapment in a mechanical mixing machine for over 90 minutes causing an open fracture plus other fractures, and a severed finger due to an unguarded drive belt.
These incidents followed a previous conviction and fine of £858,000 following an earlier incident where an employee had to have his right arm surgically removed.
David Wood Baking pleaded guilty to breaching Regulation 11 of the Provision and Use of Work Equipment Regulations 1998. The company was fined £573,344 and ordered to pay £12,255 in costs.
HSE principal inspector Jennifer French said: ‘This company failed to keep employees safe from risks posed by food manufacturing machinery… It is important for industries to understand the potential danger arising from the use of, or working near, dangerous machinery.’
Understanding Work Equipment and its Use
You, or the person responsible for managing risks, need to understand the work equipment used and how it is used. This applies to machinery, appliances, apparatus, tools or installations for use at work (whether exclusively or not) and includes equipment which employees provide for their own use at work.
‘Use of work equipment’ can be very widely interpreted and essentially means any activity involving work equipment. This includes starting, stopping, programming, setting, transporting, repairing, modifying, maintaining, servicing and cleaning.
9 Ways to Work Safely with Machinery
If your organisation uses work equipment or is involved in providing work equipment for others to use (e.g. for hire), you must manage the risks from that equipment. The regulations are extensive but specifically regarding this type of incident, this means you must ensure that:
- The equipment is constructed or adapted to be suitable for the purpose it is used or provided for.
- Health and safety risks are recorded when selecting work equipment.
- Work equipment is maintained in an efficient state, in efficient working order and in good repair.
- Maintenance logs are kept up to date.
- Equipment is inspected after installation and before being put into use.
- Equipment is inspected so that faults are detected in good time, especially where work equipment is exposed to deteriorating conditions, liable to result in dangerous situations.
- All people using, supervising or managing the use of work equipment are provided with adequate, clear health and safety information. This will include, where necessary, written instructions on its use and suitable equipment markings and warnings.
- Effective measures are taken to prevent access to dangerous parts of machinery. This will normally be by fixed guarding but where routine access is needed, interlocked guards (sometimes with guard locking) may be needed to stop the movement of dangerous parts. Where this is not possible, such as with the blade of a circular saw, it must be protected as far as possible and a safe system of work used.
- Maintenance operations on work equipment can be carried out safely while the equipment is shut down.
Tips for New Work Equipment
When providing new work equipment for use at work, you must ensure it conforms with the essential requirements of any relevant product supply law; for new machinery, this means the Supply of Machinery (Safety) Regulations 2008. You must check that the equipment:
- Has appropriate conformity marking and is labelled with the manufacturer’s details.
- Comes with a Declaration of Conformity.
- Is provided with instructions in English and any other language required by your employees.
- Is free from obvious defects – and that it remains so during its working life
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PAYROLL Sarah Bradford, Editor-in-Chief, Pay & Benefits Adviser |
How to Claim National Insurance Relief in Investment Zones
Investment Zones are areas across the UK which benefit from a range of interventions designed to promote growth in at least one of the following five priority sectors: advanced manufacturing, creative industries, digital and tech, green industries and life sciences. Some Investment Zones include designated special tax sites. These are areas which benefit from a range of tax reliefs. For Investment Zones, the reliefs are available from the date on which the special tax site is designated until 30 September 2034.
Employers with physical premises in an Investment Zone special tax site are able to benefit from a zero rate of secondary (employer’s) National Insurance contributions on the earnings of a new employee to the extent that they so not exceed the upper secondary threshold for Freeports and Investment zones.
This threshold is set at £481 per week (£2,083 per month; £25,000 per year) for 2024/25. The threshold will remain at this level for 2025/26. The relief is available for the first 36 months of the employee’s employment provided that the employee spends at least 60% of their working time in the special tax site. The employee must not have been employed by the employer or by a connected employer in the 24 months prior to starting their employment in the special tax site.
Where the employee’s earnings are below the upper secondary threshold, no employer National Insurance contributions are payable. If the employee’s earnings exceed the Freeports and Investment Zones upper secondary threshold, the excess if liable to employer’s National Insurance contributions at the usual secondary rate of 13.8% for 2024/25, rising to 15% for 2025/26.
The relief is worth up to £2,194.20 per employee for 2024/25 and up to £3,000 per employee for 2025/26. The relief only applies to employer contributions; the employee pays primary contributions on their earnings as usual to the extent that these exceed the primary threshold.
How to Claim the Relief
The relief is claimed through the payroll. To ensure that the relief is applied, the correct National Insurance category letter should be used. There are special category letters for new employees in a special tax site.
For new Freeport employees, the following category letters apply:
- F where the standard category letter would otherwise be used.
- I for married women and widows entitled to pay reduced rate contributions.
- S for employees over state pension age.
- L for employees who can defer National Insurance contributions.
For new employees in an Investment Zone special tax site, the category letters are as follows:
- N where the standard category letter would otherwise be used.
- E for married women and widows entitled to pay reduced rate contributions.
- K for employees over state pension age.
- D for employees who can defer National Insurance contributions.
The employer must keep evidence that the qualifying conditions have been met.
Understand the New Requirement from April 2025
From April 2025, an eligible employer operating in a designated Investment Zone special tax site who wishes to claim the employer’s National Insurance relief will be required to provide the workplace postcode for any eligible employee in when making the RTI Full Payment Submission.