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10 crucial employment law changes to look out for in 2019 – Advice by Peninsula Operations Director and HR Expert Alan Price

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10 crucial employment law changes to look out for in 2019 - Advice by Peninsula Operations Director and HR Expert Alan Price

From gender pay gap reporting to widespread claims of workplace sexual harassment, 2018 has been a busy year in employment law.

Although employers may hope for a quieter 2019, it’s looking likely that there will be a number of issues that are prevalent throughout the year, amid the ongoing uncertainty of Brexit.

Below are just ten changes employers need to look out for: 

  1. Increase in NMW rates 

Having been announced as part of the 2018 Budget, both the National Living Wage (NLW) and National Minimum Wage (NMW) rates will increase in April 2019. Under the new NLW, the minimum hourly rate that workers aged 25 and over are entitled to will increase from £7.83 to £8.21. At the same time, the NMW rate for workers aged between 21-24 will increase from £7.38 to £7.70 an hour; the rate for 18-20 year olds will increase from £5.90 to £6.15 an hour and those over compulsory school age but not yet 18 will experience an hourly increase from £4.20 to £4.35. The minimum rate for apprentices will also increase from £3.70 an hour to £3.90 an hour, providing the apprentice is under the age of 19, or 19 and over but in the first year of their current apprenticeship. 

  1. Settled Status for EU nationals 

European workers currently living in the UK will be able to apply for settled status in 2019, allowing them to remain indefinitely in the UK following the end of the Brexit transition period in 2021. To be granted settled status individuals must be able to prove they have been living in the UK for 5 years by the date of application. Those who do not meet this requirement can apply for temporary status, allowing them to remain until they have accrued enough residency to be granted settled status. 

  1. Auto-enrolment contributions

From April 2019 the minimum contributions for auto-enrolment pension schemes will increase for both employers and employees. Currently, automatic enrolment requirements mean employers must contribute a minimum of 2% of an eligible worker’s pre-tax salary to their pension pot, with the individual contributing 3% themselves. However, under the new requirements, employers and employees will now have to contribute a minimum of 3% and 5% respectively. Employers are reminded to allow appropriate time to consult with staff before making any changes to their pension contribution scheme. 

  1. Payslips 

Changes to the way employers issue payslips will also come into force on 6th April 2019 as from this date onwards the legal right to a payslip will be extended to include those who are recognised as ‘workers’.  Employers will also be obliged to include the total number of hours worked on payslips for employees whose wages vary depending on how much time they have worked. It is important that employers work with their payroll departments to ensure the correct procedure is in place ahead of April’s deadline. 

  1. NMW for sleep-ins 

Following 2018’s Court of Appeal decision on Mencap v Tomlinson Blake, a precedent was set that individuals working on sleep-in shifts, such as nurses and care workers, would not be entitled to national minimum wage (NMW) for time spent asleep in scenarios where they were ‘available for work’ and not ‘actually working’. A request to appeal this decision was lodged with the Supreme Court by Unison and a decision is expected in 2019 as to whether this case will be analysed further. Any ruling in 2019 will be important in defining the rights of thousands of staff currently working sleep-in shifts. 

  1. Gender Pay Gap Reporting 

Private organisations with 250 or more employees will again be required to publish their gender pay gap figures on the 4th April 2019. Although employers will be reporting for the second time, this year will be the true test as figures are expected to be heavily scrutinised in order to determine whether efforts to address any significant pay disparity highlighted in 2018 have been successful. 

  1. CEO pay gap reporting

New legislation will also come into force in 2019 that requires companies with more than 250 employees to publish their executive pay gap. Although the first reports are not expected until 2020 businesses should be calculating the necessary figures throughout 2019 to show the gap between the total amount paid to their CEO and the average pay for an employee. 

  1. Microchipping employees 

If recent news stories are to be believed the act of micro-chipping employees may become more common in the UK workplace during 2019. The UK legal system has not yet been challenged in this regard, however it will be interesting to see how a court decides to rule on microchipping staff given the potential invasion of privacy and GDPR implications. 

  1. Non-disclosure agreement

The government have brought forward a review into the use of non-disclosure agreements in the workplace, with a response expected in 2019.  These agreements, otherwise known as gagging clauses, were originally used to protect intellectual property when employees moved from one company to another. However, recent media coverage has highlighted the fact that they are often used to silence claims of harassment and bullying. Whilst these agreements remain legal, the government’s response may go some way to deciding how they can be used in the future.  

  1. Supermarket Equal Pay claims

At some time in 2019, we are expecting to receive decisions on separate tribunal cases on the issue of equal pay which involve Tesco, Asda, Morrisons and Sainsbury’s respectively.  Leigh Day are representing the employees in each of these cases and are seeking compensation for predominately female shop workers who feel they are unfairly paid less than predominately male warehouse staff, despite carrying out a similar role. This will provide more clarity on the issue of equal pay and, depending on the result, may pave the way for further claims from staff working in other sectors

 Whilst there are sure to be other new developments introduced throughout next year, employers would do well to keep a close eye on these particular topics and put plans in place to ensure their business complies with any new requirements.

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Huawei 2020 revenue ticks up despite U.S. sanctions, chairman says

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Huawei 2020 revenue ticks up despite U.S. sanctions, chairman says 1

By Josh Horwitz

SHANGHAI (Reuters) – Huawei Technologies saw slight revenue and profit growth in 2020, in line with its expectations, its rotating chairman said on Tuesday, even as Washington toughened sanctions against the Chinese telecom equipment maker.

The company was put on an export blacklist by former U.S. President Donald Trump in 2019 and barred from accessing critical technology of U.S. origin, affecting its ability to design its own chips and source components from outside vendors.

Huawei has repeatedly denied it poses a security risk.

“Huawei was confronted with some extraordinary difficulties last year,” rotating Chairman Ken Hu said at industry event Mobile World Congress Shanghai in the Chinese business hub.

“Operations were relatively stable and in line with our guidance, registering slight growth in revenue and profit.”

This month, founder and Chief Executive Ren Zhengfei said he hoped the Biden administration would “harbour an open policy” towards U.S. firms doing business with Huawei in his first comments to the media in about a year.

China has spent more than 260 billion yuan ($40.27 billion) building its 5G network, an official of the Ministry of Information and Information Technology said on Tuesday.

On Monday, Huawei unveiled its new 5G Mate X2 foldable phone, which makes use of its proprietary Kirin processor.

However, with the cheapest model starting at 17,999 yuan ($2,788), the phone is not positioned to challenge players in the mainstream market.

Huawei set up 50,000 base stations in Indonesia, Hu said, adding that it planned to build 2,000 base stations in remote regions of Ghana.

The company is expected to post full-year results in March, a spokesman said. (This story corrects paragraph 10 to drop reference to 5G)

(Reporting by Josh Horwitz; Writing by David Kirton; Editing by Kim Coghill and Sherry Jacob-Phillips)

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Employee ownership – resilience in a time of uncertainty

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Five things investors and listed companies need to know about the common ownership debate and why it matters

By Stephen Greenwood, Owner of Valloop

White House economist Jared Bernstein is a major advocate for employee ownership, in which employees buy the company they work for. In a recent study, he notes the model’s various benefits, such as how it both improves job quality as well as increasing workers’ wealth and productivity.

As a long-time adviser to President Biden, it’s highly likely Bernstein will be pushing the US Government to encourage more private businesses to transition to employee ownership. Given today’s financial uncertainty, now would seem an opportune time for businesses everywhere to consider the concept, not only for the economic and emotional stability and resilience it can offer to their employees, but also for the positive impact it can have on their bottom line and wider society. In the study, Bernstein references Federal Reserve data which showed that over half of corporate stock was held by the wealthiest one percent of households – conversely, the bottom 50 percent hold just 1 percent of the value of corporate entities. Bernstein emphasises the role employee ownership can play in redressing this imbalance: “ESOPs (Employee shared ownership plans) transfer capital ownership to wage earners, directly reducing extremely high levels of wealth concentration, and ESOP firms appear to have less internal wage dispersion”.

Wide-ranging benefits

As a form of business buy-out, employee ownership offers owners the chance to sell their company or retire but, rather than see their legacy subsumed by a competitor or PLC, it allows them to see it remain a going concern, simultaneously protecting a loyal workforce and the business’ wider community. At Valloop, we take an ethical approach to buy-outs by providing the financial instruments required for SME employees across Europe to buy their businesses via its intelligent buy-out (IBO) frameworks, creating employee co-owned companies driving value and change through greater social inclusion. This ensures a strong financial performance for investors in a way that also benefits society. In the past five years we have seen compound annual growth of more than 15%*.

The benefits of employee ownership have been proven. Underpinned by the simple idea that no business can thrive without its people, an employee ownership structure gives everyone involved a common goal – that of commercial success. Knowing they have a stake in the business, employees feel directly involved in a company’s success and that they will be rewarded for it. Indeed, research shows that the approach leads to a happier workforce: a greater involvement in the decision-making and future direction of a company results in a greater sense of satisfaction and wellbeing.

Its benefits spread beyond a company’s employees too. Companies in which employees have a stake often tend to remain rooted in the community, for example. Not only does this help protect jobs, but it can also give the company a competitive advantage, encouraging local business opportunities, and maintaining legacy company-supplier relationships. What’s more, it’s likely that employees will spend their greater take-home pay within their local communities and transition those who are classed as in-work poverty towards greater financial independence.

Essentially, the community inclusion enabled by employee-owned companies can create better performing businesses while, at the same time, transforming the fabric of society. And in the current climate, this inclusion has never been needed more.

This begs the question of why aren’t there more employee-owned businesses? Arguably, the reason there aren’t more is because the financial products have not existed to enable buyouts like this that benefit all stakeholders – investors, owners and employees. Valloop does that and has democratised access to its Private Markets Fund with the £100k point of entry for investors. By opening the market in this way, employee ownership can be brought into the mainstream.

For greater resilience

Stephen Greenwood

Stephen Greenwood

According to the Employee Ownership Association, “employee-owned businesses achieve higher productivity and greater levels of innovation and are more resilient to economic turbulence.”

By acting in the long-term interest of its workforce, an employee-owned business will tend not to deliver short-term benefits for a select few stakeholders. It will typically enjoy a significantly healthier – and, importantly, stable – bottom line. And, with better informed, more engaged, and more trusting employees, it will be highly resilient to economic changes.

Of course, the impact of COVID-19 means the country is undergoing a level of economic turbulence not seen since the Second World War. With almost one in five UK businesses either temporarily or permanently ceasing to trade by the end of 2020, the need for business resilience has never been more critical – and not just for the businesses themselves.

While a company’s resilience will come from the ability of its employees and processes to adapt to change, a mix of different business types will help make a community more resilient to economic shock, and the assurance of job and financial security will enable workers to better weather the storm. As Deb Oxley OBE, Chief Executive of the Employee Ownership Association explains, now is the time to consider employee ownership: “The Valloop solution launches at a time when the interest in employee ownership is rocketing across the UK SME sector as business owners and their management teams seek alternative ways to secure the future of their businesses. The long-term resilience of businesses and regions is increasingly more relevant as the UK builds back from the pandemic and innovations such as Valloop are very much welcomed by the Employee Ownership Association as a way of ensuring more businesses and their employees are able to experience the benefits of employee ownership, whilst contributing to a more inclusive and sustainable economy.”

This need for resilience is echoed in the US. According to Stephanie Silverman, President and CEO of the Employee-Owned S Corporations of America (ESCA), “as hardworking Americans grapple with staggering economic uncertainty driven by the pandemic, we hope more policymakers in Washington will… encourage private companies to become [employee]-owned, giving more Americans the chance to have financial stability and giving more companies the opportunity to see productivity gains as well.”

For the good of society

The concept of employee ownership is nothing new. The John Lewis Partnership, for example, has been at least partially owned by its employees for over 100 years. It’s the largest of over 370 such businesses in the country which, together, deliver 4 percent of UK GDP each year.

But it has become more relevant in the time of COVID. It matters to society. Not only does it offer owners an alternative to selling to a competitor or overseas buyer but, by creating democratic ownership of a company for all of its employees, it protects jobs, and by keeping the business and its productivity in the region, it protects communities.

Given the wide-ranging benefits of employee-owned companies, the title of Bernstein’s study is apt in this current period of economic uncertainty – “Why aren’t there more?”. The simple answer is that there were not liquidity investors, until now…

* past performance is no guarantee of future results.

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Hyundai Motor to recall Kona EV and other electric vehicles in South Korea

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Hyundai Motor to recall Kona EV and other electric vehicles in South Korea 2

SEOUL (Reuters) – Hyundai Motor Co will recall 26,699 electric vehicles including Kona EVs in South Korea due to potential fire risks, South Korea’s transport ministry said on Wednesday.

The recall will replace the vehicles’ battery systems and applies to 25,083 Kona EVs, starting March 29, the ministry said in a statement.

It is Hyundai’s second recall for the Kona, its best-selling electric vehicle and follows a decision by South Korean authorities this year to launch a probe into whether the previous recall was adequate. The first recall occurred in October after a series of fires but in January one of the recalled vehicles caught fire.

The Kona EV uses batteries manufactured by LG Chem Ltd’s wholly owned battery division LG Energy Solution.

(Reporting by Heekyong Yang and Joyce Lee; Editing by Jacqueline Wong and Edwina Gibbs)

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