Benefits Briefing: June 2017

Pension participation and employee rights gains are cause for celebration in a fairly depressing month for HR

Benefits Briefing: June 2017
Are your employees happy? A recent survey found half are more miserable and worse off because of their work. Image: iStock

5th June

Tribunal supports paternity leave claim

An employment tribunal has found that a new father should have been given the same right to time off as a new mother would have. Mr Ali, an employee of Capita Customer Management, claimed he was discriminated against when his employer refused to allow him to take more than his two weeks’ paid paternity leave at full pay. Ali, who was TUPE transferred from Telefónica, wanted to take more time off, but was told he could only take extra leave according to shared parental leave rules, and that he would only be entitled to statutory pay. He contested this, arguing a female employee who had been transferred from Telefónica would be entitled to 14 weeks’ paid leave following the birth of her child. The tribunal agreed with his discrimination claim, leading some lawyers to claim it now sets a ‘worrying’ precedent.

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7th June

Employees suspicious of one-off perks

Almost half of employees suspect one-off perks are used to deflect attention away from overly long working hours, according to recent research. A poll of 1,000 employees conducted by cycle-to-work scheme provider, Cyclescheme found 37% of respondents said they’d appreciate opportunities for a better work-life balance, while 28% simply said they’d prefer to be able to switch off mentally than receive a one-off perk. Adrian Warren, Cyclescheme director, said: “Often leaders think ‘popular’ perks such as team drinks are what employees want most. But it’s having initiatives that will help them adopt healthier behaviours over the long term that are of the greatest value.”

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8th June

SAYE schemes are rising in popularity

Research by ProShare revealed that Save As You Earn (SAYE) share schemes are enjoying a boost in popularity, with the average amount saved by 1.4 million contributing employees rising to £158.18 per month. It’s the fifth consecutive year that contributions into these tax-advantaged savings vehicles have increased. ProShare’s annual SAYE and SIP Survey also found that more than a third (35%) of staff taking up partnership and matching shares do so through a SIP scheme, and the average amount employees save into these is £89 a month.

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8th June

AE dropouts could slash retirement income by 69%

Employees who decide to drop out of automatic enrolment when contributions reach 5% in 2019 only to resume saving again at 55, when they’re close to retirement, risk seeing their retirement income plummet by a staggering 69%. This is the conclusion of research conducted by actuarial firm, Milliman, which finds the decisions people can make now that DC pensions outnumber DB schemes, leave them in a much more precarious position. By contrast, it also found that if families regularly reviewed their pension contribution rates and increase them little and often, they could actually generate an extra £6,900 income in retirement.

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9th June

Unused holiday compensation award boosts employees’ rights

Employees’ rights have been described as getting a ‘major boost’, thanks to a European Court of Justice (ECJ) ruling in favour of a former window salesman. The claimant was awarded £27,000 in compensation for holiday pay he was unable to take during his tenure with his former employer. His claim – based on the fact that he felt unable to take holiday because he was paid on a commission-only basis – successfully proved he was owed 13 years’ worth of holiday pay. The ECJ Advocate General, Evgeni Tanchev, said employers had to “provide adequate facilities to workers” to allow them their paid leave.

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12th June

Pay freezes fund National Living Wage for one in four firms

The National Living Wage (NLW) – which guarantees the incomes of some – is having a deleterious impact on others because employers are putting a freeze on pay rises to meet this commitment. Research by XpertHR found this was the case in nearly a quarter (23%) of large organisations surveyed. Sheila Attwood, managing editor of pay and HR practice content at XpertHR, said: “It’s clear some employers are underestimating the impact the NLW will have on their pay budgets over the next three years. They need to be doing much more work; including forecasting and modeling the effect of this on their pay bill and profitability.”

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15th June

Is work fulfilling or depressing? It’s a 50/50 result

Far from work giving people financial independence and a sense of pride and wellbeing, half of UK employees say work actually makes them more miserable and financially more precarious. Thomsons Online Benefits’ Global Employee Benefits Watch 2017/18 report found that 51% of staff thought work had a detrimental impact on their wellbeing. It also revealed that while 40% of employees wanted perks that improved their sense of mental wellbeing, only 18% of employees felt their benefits supported this.

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16th June

Pension participation at an all-time high

Nearly four-fifths (78%) of eligible employees saved into a workplace pension in 2016 – an increase of 3% since 2015, making participation at an all-time high. Figures from the Department for Work and Pensions shows 73% of eligible employees in the private sector and 92% of those in the public sector are saving into a workplace pension – up 31 percentage points and 4 percentage points respectively since 2012. Promisingly, it also revealed that 89% of eligible public sector employees and 68% of private sector employees aged between 22 and 29 were now saving into a workplace pension in 2016. Jeanette Makings, head of financial education at Close Brothers, said: “The introduction of auto-enrolment was a significant milestone for savers in the UK, one that these figures prove has been instrumental in increasing pension contributions since 2012.”

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22nd June

A third of private sector staff in the dark about equality

Despite gender pay gap reporting being mandatory for all firms employing more than 250 people, research by Badenoch and Clark has found that 30% of private sector employees have no idea if they and their colleagues are being rewarded equally. That’s nearly twice the number of public sector staff in the same boat. Nicola Linkleter, president of professional staffing at Badenoch and Clark, said: “Each employee that has experienced bias is one too many, and employees will only ever flourish if they feel they can truly be themselves at work.” Its poll also found only 47% of private sector respondents believed men and women were paid and rewarded equally in their organisation.

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26th June

High salary jobs least likely to offer flexible working

Only 10% of positions with a salary of £20,000 to £34,000 offer flexible working according to an analysis of advertised roles by Timewise. By comparison, one in five (20.4%) jobs with a salary of between £14,000 and £19,999 do offer flexibility. Emma Stewart, co-founder and joint CEO of Timewise said: “Employees who have negotiated or found a way to work flexibly and who want to move up via career progression or into another company are fishing from a pool of less than one in 10 jobs.” This lack of flexibility was even worse for salaries greater than £34,000. Just 8.6% of jobs paying between £35,000 and £59,000 offered flexible working; only 7.1% for jobs between £60,000-£79,000 and just 6.9% for those at £80,000 or more.

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AND FINALLY…

Real wages to hit lowest point for two centuries

Thought you were reaping the benefits of living in the 21st century? Think again. It’s more like the early 19th century, when George III was on the throne and the Napoleonic Wars were in full swing, when it comes to the buying potential of our wages. That's according to the Resolution Foundation, which has claimed real wages are now so low, they are on course to be at their worst point for more than 200 years. Torsten Bell, the Resolution Foundation’s director, claims the country has seen a jobs boom but a pay disaster, which means by 2021, real pay will be no better than it was 210 years ago. It comes as the ONS published data that shows inflation is 2.9%, while nominal pay has only grown 2% for the last three years – and in the most recent quarter, pay growth actually fell by 0.5%.

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Saturday 19 August 2017
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