Pay day?

Photo by Jordan Rowland on Unsplash

One of the most important common law duties that an employer has under the contract of employment is to pay wages to the employee.

This duty, of course, is contingent upon the employee carrying out his or her side of the bargain i.e. performing their contractual duties.

The right to be paid fully and on time is a basic right of any employee. Failure by employers to pay wages (wholly or partially) or to delay payment is a serious contractual breach.

Historically, employers could exploit employees by paying them in vouchers or other commodities. Often, these vouchers could be exchanged only in the factory shop. This led Parliament to pass the Truck Acts to prevent such abuses.

Sections 13-27 of the Employment Rights Act 1996 (which replaced the Wages Act 1986) give employees some very important rights as regards the payment of wages.

The National Minimum Wage Act 1998 (and the associated statutory instruments) and the Equality Act 2010 also contain important provisions about wages and other contractual benefits.

There are a number of key issues regarding the payment of wages:

  • All employees are entitled to an individual written pay statement (whether a hard or electronic copy)
  • The written pay statement must contain certain information
  • Pay slips/statements must be given on or before the pay date
  • Fixed pay deductions must be shown with detailed amounts and reasons for the deductions e.g. Tax, pensions and national insurance
  • Part time workers must get same rate as full time workers (on a pro rata basis)
  • Most workers entitled to be paid the National Minimum Wage or the National Minimum Living Wage (if over age 25) (NMW)
  • Some workers under age 19 may be entitled to the apprentice rate

Most workers (please note not just employees) are entitled to receive the NMW i.e. over school leaving age. NMW rates are reviewed each year by the Low Pay Commission and changes are usually announced from 1 April each year.

It is a criminal offence not to pay workers the NMW and they can also take (civil) legal action before an Employment Tribunal (or Industrial Tribunal in Northern Ireland) in order to assert this important statutory right.

There are certain individuals who are not entitled to receive the NMW:

  • Members of the Armed Forces
  • Genuinely self-employed persons
  • Prisoners
  • Volunteers
  • Students doing work placements as part of their studies
  • Workers on certain training schemes
  • Members of religious communities
  • Share fishermen

Pay deductions?

Can be lawful when made by employers …

… but in certain, limited circumstances only.

When exactly are deductions from pay lawful?:

  • Required or authorised by legislation (e.g. income tax or national insurance deductions);
  • It is authorised by the worker’s contract – provided the worker has been given a written copy of the relevant terms or a written explanation of them before it is made;
  • The consent of the worker has been obtained in writing before deduction is made.

Extra protection exists for individuals working in the retail sector making it illegal for employers to deduct more than 10% from the gross amount of any payment of wages (except the final payment on termination of employment).

Employees can take a claim to an Employment Tribunal for unpaid wages or unauthorised deductions from wages. They must do so within 3 months (minus 1 day) from the date that wages should have been paid or, if the deduction is an ongoing one, the time limit runs from the date of the last relevant deduction.

An example of a claim for unpaid wages can be seen below:

Riyad Mahrez and wife ordered to pay former nanny

Equal Pay

Regular readers of the Blog will be aware of the provisions of the Equality Act 2010 in relation to pay and contractual benefits. It will amount to unlawful sex discrimination if an employer pays a female worker less than her male comparator if they are doing:

  • Like work
  • Work of equal value
  • Work rated equivalent

Sick Pay

Some employees may be entitled to receive pay from the employer while absent from work due to ill health e.g. 6 months’ full pay & then 6 months’ half pay. An example of this can be seen below:

Statutory Sick Pay (SSP)

This is relevant in situations where employees are not entitled to receive contractual sick pay. Pre (and probably post Coronavirus crisis) it was payable from the 4th day of sickness absence only. Since the outbreak of the virus, statutory sick pay can paid from the first day of absence for those who either are infected with the virus or are self-isolating.

Contractual sick pay is often much more generous than SSP

2020: £95.85 per week from 6 April (compared to £94.25 SSP in 2019) which is payable for up to 28 weeks.

To be eligible for SSP, the claimant must be an employee earning at least £120 (before tax) per week.

Employees wishing to claim SSP submit a claim in writing (if requested) to their employer who may set a deadline for claims. If the employee doesn’t qualify for SSP, s/he may be eligible for Employment and Support Allowance.

Holiday Pay

As per the Working Time Regulations 1998 (as amended), workers entitled to 5.6 weeks paid holiday entitlement (usually translates into 28 days) per year (Bank and public holidays can be included in this figure).

Some workers do far better in terms of holiday entitlement e.g. teachers and lecturers.

Part-time workers get holiday leave on a pro rata basis: a worker works 3 days a week will have their entitlement calculated by multiplying 3 by 5.6 which comes to 16.8 days of annual paid leave.

Employers usually nominate a date in the year when accrual of holiday pay/entitlement begins e.g. 1 September to 31st August each year. If employees leave during the holiday year, their accrued holiday pay will be part of any final payment they receive.

Holiday entitlement means that workers have the right to:

  • get paid for leave that they build up (‘accrue’) in respect of holiday entitlement during maternity, paternity and adoption leave
  • build up holiday entitlement while off work sick
  • choose to take holiday(s) instead of sick leave.

Guarantee payments

Lay-offs & short-time working

Employers can ask you to stay at home or take unpaid leave (lay-offs/short time working) if there’s not enough work for you as an alternative to making redundancies. There should be a clause in the contract of employment addressing such a contingency.

Employees are entitled to guarantee pay during lay-off or short-time working. The maximum which can be paid is £30 a day for 5 days in any 3-month period – so a maximum of £150 can be paid to the employee in question.

If the employee usually earn less than £30 a day, s/he will get their normal daily rate. Part-time employees will be paid on a pro rata basis.

How long can employees be laid-off/placed on short-time working?

There’s no limit for how long employees can be laid-off or put on short-time. They could apply for redundancy and claim redundancy pay if the lay-off/short-term working period has been:

  • 4 weeks in a row
  • 6 weeks in a 13-week period

Eligibility for statutory lay-off pay

To be eligible, employees must:

  • have been employed continuously for 1 month (includes part-time workers)
  • reasonably make sure you’re available for work
  • not refuse any reasonable alternative work (including work not in the contract)
  • Not have been laid-off because of industrial action
  • Employer may have their own guarantee pay scheme
  • It can’t be less than the statutory arrangements.
  • If you get employer’s payments, you don’t get statutory pay in addition to this
  • Failure to receive guarantee payments can give rise to Employment Tribunal claims.

This is an extremely relevant issue with Coronavirus, but many employers are choosing to take advantage of the UK Government’s Furlough Scheme whereby the State meets 80% of the cost of an employee’s wages because the business is prevented from trading.

Redundancy payments

If an employee is being made redundant, s/he may be entitled to receive a statutory redundancy payment. To be eligible for such a payment, employees must have been employed continuously for more than 2 years.

The current weekly pay used to calculate redundancy payments is £525.

Employees will receive:

  • half a week’s pay for each full year that they were employed under 22 years old
  • one week’s pay for each full year they were employed between 22 and 40 years old
  • one and half week’s pay for each full year they were employed from age 41 or older

Redundancy payments are capped at £525 a week (£508 if you were made redundant before 6 April 2019).

Please find below a link which helps employees facing redundancy to calculate their redundancy payment:

https://www.gov.uk/calculate-your-redundancy-pay

Family friendly payments

Employers also have to be mindful of the following issues:

  • Paternity pay
  • Maternity Pay
  • Shared Parental Pay
  • Maternity Allowance
  • Adoption Pay
  • Bereavement Pay

Employers can easily keep up to date with the statutory rates for family friendly payments by using the link below on the UK Government’s website:

https://www.gov.uk/maternity-paternity-calculator

What happens if the employer becomes insolvent and goes into liquidation?

Ultimately, the State will pay employees their wages, redundancy pay, holiday pay and unpaid commission that they would have been owed. This why the UK Government maintains a social security fund supported by national insurance contributions.

An example of a UK business forced into liquidation can be seen below:

Patisserie Valerie: Redundant staff ‘not receiving final pay’

Up to 900 workers lost their jobs when administrators closed 70 of the cafe chain’s outlets. Disclaimer:

Conclusion

Payment of wages is one of the most important duties that an employer must fulfil. It is also an area which is highly regulated by law, for example:

  • The common law
  • The Employment Rights Act 1996
  • The Working Time Regulations 1998
  • The National Minimum Wage Act 1998
  • The Equality Act 2010
  • Family friendly legislation e.g. adoption, bereavement, maternity, paternity

Failure by an employer to pay an employee (and workers) their wages and other entitlements can lead to the possibility of claims being submitted to an Employment Tribunal. The basic advice to employers is make sure you stay on top of this important area of employment law because it changes on a regular basis and ignorance of the law is no excuse.

Related Blog Articles:

https://seancrossansscotslaw.com/2020/01/30/2020-same-old-sexism-yes-equal-pay-again/

https://seancrossansscotslaw.com/2020/01/10/new-year-same-old-story/

https://seancrossansscotslaw.com/2019/05/13/inequality-in-the-uk/

https://seancrossansscotslaw.com/2019/03/31/the-gender-pay-gap/

https://seancrossansscotslaw.com/2019/04/05/the-gender-pay-gap-part-2/

https://seancrossansscotslaw.com/2019/06/26/ouch/

https://seancrossansscotslaw.com/2019/06/20/sexism-in-the-uk/

Thttps://seancrossansscotslaw.com/2019/04/30/paternity-leave/

Copyright Seán J Crossan, 5 April 2020

The Battle of Balaclava?

Photo by nick olson on Unsplash

Balaclavas can be very useful things to have to hand – when the weather is very cold or you’re discussing the Crimean War (1853-1856) from where the term for the garment originates in the United Kingdom (circa 1881, according to the historian and cleric, Richard Rutt). During the Crimean War, British soldiers wore the garment to cope with the sub-zero temperatures that they experienced during the winter months of the Campaign.

Today, the garments are still incredibly popular with cyclists and winter sports’ enthusiasts (I confess: I have two for cycling during the winter months and they’re great!).

Despite, the historical associations with the British Army’s involvement in the Crimean War, it’s not always advisable to use the Balaclava as a teaching aid for History classes – especially DIY History classes.

McClean, an Irish footballer playing for the English Championship side, Stoke City FC, has recently found this out to his cost.

In a bizarre social media post (on Instagram), McClean put a picture of himself wearing a Balaclava as he was talking to two children. What was the point of this strange exercise? McClean claims that he was teaching the children about history, but others have seen this as an endorsement of paramilitary groups – particularly the Provisional IRA.

Today’s history lesson by James McClean

There was a public backlash and McClean was fined by this Club. The player is something of a controversial figure to many as he routinely refuses to have a poppy printed on his football jersey in the run-up to Remembrance Day commemorations each November in the United Kingdom.

https://www.independent.co.uk/sport/football/premier-league/poppy-james-mcclean-matic-guardiola-klopp-remembrance-sunday-armistice-day-a9194266.html

McClean hails from the City of Derry in the North of Ireland which will be forever associated with the events of ‘Bloody Sunday’ on 30 January 1972. On that day, 13 innocent Civil Rights marchers were shot and killed without justification by members of the Parachute Regiment – as per the conclusions of Lord Saville’s Report (2010) which contradicted Lord Widgery’s findings published in April 1972. The Saville Inquiry took 12.5 years and cost the British taxpayer £191.5 million – the longest and most expensive inquiry ever in the United Kingdom (figures obtained from The Spectator).

The previous Widgery Report was seen by many in the Republican and Nationalist community as a cover-up and a whitewash in that it absolved the Parachute Regiment of any wrong-doing for the deaths. Inevitably, the Report fuelled a long lasting sense of grievance within this community. McClean grew up on Derry’s Creggan Estate – not far from St Mary’s Church where many of the funerals of the ‘Bloody Sunday’ victims took place.

We often forget that footballers can be employees i.e. have a contract of service with their Clubs as per Section 230 of the Employment Rights Act 1996. McClean is fortunate that he has retained his post; other, less famous employees might not have been so lucky.

Section 98(4) of the Employment Rights Act 1996 permits an employer to dismiss an employee (potentially) fairly by reason of his/her conduct (with the proviso, of course, that the employer follows proper procedures in line with current ACAS standards).

McClean might initially have protested that the social media post was done while he was outside working hours. Regular readers of this Blog will be well aware that this type of excuse is extremely naive at best. Yes, employees do have a right to privacy, in terms of the European Convention on Human Rights, but this is never absolute – especially if an employer can argue that the behaviour of an individual employed by him or her has caused reputational damage to the organisation.

Employers do have a part to play here: they have a duty to have clear and consistent guidelines on employee social media use within and outwith the work-place. It should go without saying (but I’ll say it anyway) that the employer should make sure that employees are aware of the existence of such guidelines and have actually read them.

The misbehaviour or misconduct of employees which takes place outside working hours can have a really serious reputational impact on your employer. Individuals, like McClean, with high profiles in the community should be aware of this. It won’t be the last time that we read about someone who is deemed to be a role model – a teacher or a sporting personality – who misbehaves outside work and pays the price for this type of behaviour.

A link to the story on the Sky News website can be found below:

https://news.sky.com/story/james-mcclean-irish-footballer-fined-for-balaclava-childrens-history-lesson-post-11964664

Related Blog Articles:

https://seancrossansscotslaw.com/2020/01/02/youre-never-off-duty/

https://seancrossansscotslaw.com/2019/12/08/different-standards/

https://seancrossansscotslaw.com/2019/12/03/the-limits-of-privacy/

https://seancrossansscotslaw.com/2019/09/03/facebook-folly/

https://seancrossansscotslaw.com/2019/06/05/im-a-political-activist-dont-sack-me/

https://seancrossansscotslaw.com/2019/05/20/social-media-and-dismissal/

https://seancrossansscotslaw.com/2019/04/11/social-media-misuse/

https://seancrossansscotslaw.com/2019/04/09/drunk-and-disorderly/

https://seancrossansscotslaw.com/2019/02/07/it-happened-outside-work-or-its-my-private-life/

Copyright Seán J Crossan, 2 April 2020

I’m a climate activist, don’t fire me!

Photo by Stock Photography on Unsplash

Today seems to be something of a red letter day for the Blog with regard to the issue of protected philosophical beliefs in terms of the Equality Act 2010.

We have already heard the news that Jordi Casamitjana has won the part of his Employment Tribunal claim that his ethical veganism is a philosophical belief in terms of Sections 4 and 10 of the 2010 Act (see Casamitjana v League Against Cruel Sports [2020]).

It was some interest that another news item popped up today concerning allegations that Amazon stands accused of threatening to dismiss those of its employees who become involved in climate protests. I would hazard a guess that Amazon is making a statement of intent that it may dismiss employees who perhaps break the law when they are involved in climate protests such as those organised by Extinction Rebellion and other similarly minded groups.

Criminal acts by employees committed outside the workplace could be regarded as gross misconduct in terms of Section 98 of the Employment Rights Act 1996. In other words, such behaviour by employees could result in the employer suffering reputational damage and, consequently, any dismissal for misconduct could be potentially fair. That said, employers should always carry out the proper disciplinary procedures when contemplating dismissal as the ultimate sanction for employee misbehaviour.

The real gripe – according to Amazon Employees for Climate Justice – is that the tech company allegedly objects to employees speaking critically about its failure to be more environmentally responsible.

Yet, there are potential dangers here for Amazon in the UK. In Grainger plc v Nicholson (2010) IRLR 4, the Employment Appeal Tribunal established that an employee’s belief in climate change could constitute discrimination on the grounds of a philosophical belief.

So, we could have situation where Amazon employees who are taking part in quite peaceful and lawful climate change protests end up being dismissed. This would open up the possibility that employees of Amazon UK might have the right to bring claims for direct discrimination (Section 13: Equality Act 2010) in respect of their philosophical beliefs (Sections 4 and 10 of the Act).

In the USA, there could be even more serious legal implications – infringing the right to free speech which is protected under the Constitution.

Perhaps Amazon needs to go back to the drawing board …

A link to an article on the BBC News App can be found below:

Amazon ‘threatens to fire’ climate change activists

The company said employees “may receive a notification” from HR if rules were “not being followed”.

Related Blog article:

https://seancrossansscotslaw.com/2019/06/05/im-a-political-activist-dont-sack-me/

Copyright Seán J Crossan, 3 January 2020

The limits of privacy

Photo by Tony Liao on Unsplash

Several of my previous blogs (It happened outside work … (or it’s my private life!) published on 7 February 2019; Social Media Misuse published on 11 April 2019; and Social media and dismissal published on 20 May 2019) have addressed the issue of whether employees have a right to privacy in the work-place.

The short answer is yes and no: privacy is not an absolute right.

Privacy in the work-place is becoming more of an issue thanks to the widespread use of social media by employees outwith working hours (and, of course, during the working day).

If you’re working in the public sector (and this, potentially, covers a large number of employees), Article 8 of the European Convention on Human Rights i.e. the right to family and private life could be particularly relevant to your situation.

Even if you’re employed by a private sector organisation, Article 8 rights are still relevant because they are ultimately guaranteed by the State (the United Kingdom) as a signatory to the European Convention. Furthermore, there are all sorts of situations where private sector organisations may be regarded as ’emanations/entities of the State’ because they carry out some type of work or provide a service which is beneficial to the wider public (think utilities companies or those organisations which benefit from outsourced contracts from local and central government).

Regular readers of this blog will know, of course, that provisions of the European Convention have been incorporated into Scots Law via the Scotland Act 1998 and the Human Rights Act 1998.

Employers, quite rightly, may have legitimate concerns about the type of content or statements that their employees post on social media platforms – especially if such material could cause the organisation to suffer some sort of reputational damage.

In such circumstances, it’s simply not a competent defence for employees to argue that disciplinary action (up to and including dismissal) which might be taken by their employers represents unwarranted interference in their private lives.

That said, it is very important for employers to set out clear guidelines and policies covering social media (mis)use by employees during and outwith working hours. There is a balancing exercise to be had here between the legitimate interests of the employer and the employee.

So, it was with some interest that I read about a case before the Outer House of the Court of Session during the summer which dealt with the boundaries of employee privacy (see Petition of B, C and Others v Chief Constable Police Service of Scotland and Others [2019] CSOH 48).

Lord Bannatyne rejected the Petition for judicial review lodged by a number of serving Police Scotland officers who were accused of (non-criminal) misconduct by their employer. These officers had allegedly used the WhatsApp social media platform to exchange a number of messages between them which were deemed to be offensive in nature and not in keeping with their role as serving members of Police Scotland.

Police Scotland wished to access the content of these messages in order to progress the misconduct hearings, but the officers involved in the disciplinary investigation argued that this constituted a breach of their human rights – specifically their rights to privacy Article 8 of the European Convention on Human Rights. More generally, the officers were also arguing that they had the right to privacy at common law.

His Lordship highlighted the significance of the important decision of the European Court of Human Rights: Von Hannover v Germany [2005] 40 EHRR 1 to the case before him.

Von Hannover raises three important considerations:

“… the width of the concept of private life; the purpose of Article 8, i.e. what it seeks to protect; and the need to examine the particular circumstances of the case in order to decide whether, consonant with that purpose, the applicant had a legitimate expectation of protection in relation to the subject matter of his complaint.”

The key issue which Lord Bannatyne identifies from Von Hannover, is whether the Scottish police officers “had a legitimate expectation of protection” in terms of Article 8; or to draw upon a phrase later formulated by UK Supreme Court Justice, Lord Toulson: “a legitimate expectation of privacy” (see In re JR38 2016 AC 1131).

In rejecting the officers’ petition, Lord Bannatyne focused on the existence of the Standards of Professional Behaviour contained in Schedule 1 to the 2014 Regulations to which all serving Police officers must adhere (in particular the officers had sworn an oath to uphold these Standards both while on and off duty).

His Lordship stated:

There is a restriction on police officers’ private life and therefore their expectation of privacy. … It is only in relation to these matters that there is a limitation on the officer’s privacy it is not a whole scale intrusion into his private life. Accordingly to achieve the underlying purpose of the Standards, namely: the maintenance of public confidence in the police, police officers have a limitation on their expectation of privacy as above described.

A link to Lord Banntyne’s judgement can be found below:

A link to how the story was reported by BBC Scotland can be found below:

https://www.bbc.co.uk/news/uk-scotland-tayside-central-48799289

As a point of interest, several days after Lord Bannatyne’s judgement was reported, the BBC carried a story about United States Border Patrol officers who were suspended from employment for posting offensive remarks about migrants (and other individuals) on Facebook.

A link to this story can be found below:

https://www.bbc.co.uk/news/world-us-canada-48834824

Copyright Seán J Crossan, 3 December 2019

Bad medicine

Photo by Kendal James on Unsplash

A story which caught my eye over the last few days comes from the fair Canadian City of Toronto and involves misconduct dismissals. For a change, the dismissals do not involve social media misuse, but rather good old fashioned fraud.

150 members of staff working at a Toronto hospital were sacked for involvement in a sophisticated prescription fraud which was reportedly in the region of £3 million over an 8 year period. Defrauding your employer is, of course, an extremely serious breach of trust which materially undermines the contract of employment.

Interestingly, at this point, the Police in Toronto have not charged any individual with the crime of fraud – yet – but clearly the employer feels that it has sufficient grounds to go ahead with the dismissals.

I often to say to students that the employer merely has to have a reasonable suspicion that the employee has committed an act of misconduct. There is no need for the employer to demonstrate that the allegation(s) of misconduct meets the criminal standard of proof.

A link to the story on the Sky News website can be found below:

http://news.sky.com/story/150-toronto-hospital-staff-fired-over-prescription-scam-11760982

Had this story occurred in the UK, we would be talking about the matter in the context of Section 98(4) of the Employment Rights Act 1996. If employers can show that the reason for the dismissal of employees is justified i.e. on the grounds of misconduct (fraud), it will be a fair dismissal. As a point of good disciplinary policy, of course, employers should always follow the proper procedures when deciding to dismiss employees on the grounds of dismissal.

Copyright Seán J Crossan, 13 July 2019

The Living Wage

An interesting article appeared in today’s Independent about a campaign to encourage Waterstone’s, the well known high street book retailer, to pay staff the Living Wage.

As I often say to my students, when discussing the issue of pay, it is a hugely emotive issue – especially if you happen to be at the lower end of the wage scale and have difficulty getting your proper entitlement.

The idea of the employee or labourer being worthy of his or her hire is a deeply ingrained cultural norm in European and North American societies (largely underpinned by many scriptural references in both the Old and New Testaments of the Christian Bible e.g. Deuteronomy 24: 15 and Matthew 20: 8).

The employer, of course, has a contractual duty to pay her employees in return for them providing services.

A link to the article can be found below:

‘We should insist that staff in bookshops are fairly paid’
https://edition.independent.co.uk/editions/uk.co.independent.issue.290319/data/8843991/index.html

As the article notes:

“Paying the living wage also makes sense from a business perspective. The Living Wage Foundation said that 93 per cent who paid the wages had seen benefits in retention and motivation of staff, and company reputation.”

As the Living Wage Foundation emphasises the real Living Wage is £10.55 for those working in London and £9 for those working across the rest of the UK. As we shall see, the UK Government introduced its own version of the Living Wage in 2016, but this is less generous. This was effectively a higher National Minimum Wage rate for people aged over 25.

As the Foundation states:

“The real Living Wage rates are higher because they are independently-calculated based on what people need to get by. That’s why we encourage all employers that can afford to do so to ensure their employees earn a wage that meets the costs of living, not just the government minimum.”

A link to the website of the Living Wage Foundation can be found below:

https://www.livingwage.org.uk/

The National Minimum Wage

The introduction of the National Minimum Wage Act 1998 ensured that workers must receive a basic hourly wage depending on their age.

One of the most important changes to the National Minimum Wage Scheme since February 2005 is the inclusion of young workers i.e. young persons aged 16 and 17 years old. Previously, these individuals were not covered by the National Minimum Wage Act 1998. The British Government, however, finally accepted the recommendation of the Low Pay Commission that the Scheme should be extended to young workers.

The Living Wage

In many respects, the debate about the National Minimum Wage has moved on from the late 1990s when organizations such as the Conservative Party, the Confederation of British Industry and the Institute of Directors were uniformly hostile to its introduction by the first Labour Government of Tony Blair (1997-2001) on the grounds that immense damage would be done to the British economy. These fears were not realized and the minimum wage has become an accepted feature of British employment rights. The debate concerns the introduction of the Living Wage.

The Living Wage Foundation actively calls on employers to pay an enhanced income ensuring a basic standard of living. The Labour Party had promised to introduce a Living Wage if elected to form the next UK Government in 2015 and it was thought that, with the Party’s defeat at the last General Election, the idea would be placed on ice during the next Parliamentary term. It was therefore somewhat surprising when George Osborne, the former Conservative Chancellor of Exchequer announced, during his 2015 Autumn Statement, that the Coalition Government intended to introduce a National Living Wage in April 2016.

From 1 April 2016, under the National Living Wage, employers had to pay workers over the age of 25 (and who are not in the first year of an apprenticeship), a minimum hourly rate of £7.20. These individuals must work 2 or more hours a day for 8 or more consecutive weeks of the year. There was no requirement to pay the National Living Wage to volunteers, interns and apprentices – as well as contractors on the supply side. Critics of the Coalition Government were quick to point out that the statutory rate was less than what was understood by the real Living Wage recommended by the Living Wage Foundation (i.e. £7.85 per hour or £9.15 inside London). The Coalition Government had stated that it was committed to raising the National Living Wage by 2020.

From 6 April 2019, the National Minimum Wage will rise from £7.83 per hour to £8.21. The real Living Wage for 2019-20, however, has been set at an hourly rate of £9 outside London and £10.55 inside London.

Employers who refuse to pay the National Living Wage will face enforcement action similar to that already carried out in relation to the National Minimum Wage.

There is no doubt that the Living Wage is an idea whose time has come. It is worth noting that many employers already pay their workers the real Living Wage on a voluntary basis and proudly publicise this fact.

The concept is not without its critics and the BBC reported on 1 April 2016 that the independent Office of Budget Responsibility had calculated that as many as 60,000 jobs could be lost as a result of its introduction. As we have discussed, similar claims in the late 1990s were made about the introduction of the national minimum wage and these proved to be largely groundless.

The positive impact of the National Living Wage seems to be supported by research carried out by the Ulster University Economic Policy Centre. In Northern Ireland alone from 2020 onwards, 128,000 people will benefit from a pay increase due to the National Living Wage being increased.

National Living Wage to drive pay bump for thousands

More than 128,000 in NI will get a pay rise by 2020 due to the National Living Wage, study suggests.

Postscript

The Low Wage Commission published research at the end of April 2019 showing that the number of workers who do not receive the national minimum wage increased in 2018. A link to the Commission’s report can be found below:

https://www.gov.uk/government/news/minimum-wage-underpayment-on-the-rise-low-pay-commission-finds

Copyright Seán J Crossan, 29 March & 26 April 2019