What has become known as the ‘Default Retirement Age’ of 65 will no longer be an age at which staff can be retired without consent. Over recent years employees have had the right to request to work after their 65th birthday but an employer could refuse without justification.

Current retirement procedures are being phased out; but employers giving notice before 6th April 2011 for leaving before 1st October 2011 will remain valid.

From 6th April 2011 all employers will have to fully justify any such dismissals. 

Employers will still be allowed to dismiss on grounds of retirement as a reason to bring employment to an end provided a fair procedure is used and the retirement is justified. Such justification may, for example, include workforce planning, having an age balanced workforce and sharing job opportunities amongst the generations. Any justification must have a legitimate aim and be a proportionate means of achieving it. Tribunals will look at the reasons put forward and it will fall to the employer to show the legitimacy of the aim and proportionality in all the circumstances. 

• What should employers do before 6^th April?
• Identify any imminent retirements (i.e. before October 1st) and check they are covered by the current procedure.
• Make sure that, where retirement notices are being given before 6th April, any notices of dismissal take effect on or before 30 September 2011.
• Mark 5 April 2011 in the diary as last day on which notices of dismissal under the default retirement procedure may be issued for staff who will be 65 on or before 30 September 2011.
• Consider developing a comprehensive policy on retirement in the light of the need to fully justify such decisions before a Tribunal. 

For further information please contact Howard Robson at Warner Goodman LLP on howardrobson@warnbergood-man.co.uk

The ageing population will be just one social development causing great change in the workplace over the next ten years, according to the advice and arbitration service Acas. 

The first of a series of studies looking at workplace changes and employment relations, The Future of Workplace Relations highlights concerns over the changing profile of work, the fragmentation of the employment relationship, increasing rules and regulations and changing attitudes to conflict as potential hazards to employers over the next decade.

The ageing workforce is highlighted as the key concern, with Acas warning that employers should start planning today for the effects an ageing population will have on their workplace. As the population ages the service predicts that thousands of workers will experience increased pressure as they combine their duties of care with commitments to work. Around one in seven of the workforce are also carers, says Acas, and 46% of those have already changed their working arrangements in some way.

The study also pointed to outsourcing as a potential area of concern, with its increased use complicating contractual relationships and affecting the employer-employee relationship. The combined effects of these social changes need to be taken into account, says Acas, or the performance of the UK’s businesses will suffer. 

John Taylor, Acas Chief Executive, said: ”Looking at the next ten years, the structures and assumptions that are often made about our interactions at work are becoming outdated and we need to reappraise traditional approaches to employment relations. There is an increasing need for employers to communicate and engage with their employees to help increase productivity and innovation.”

A national survey has found UK management unconcerned that workers are working over their annual leave.

CBSbutler, the technical recruiter, found that despite about 12% of the nation’s employees ending last year with more than 10 days of holiday left untaken, the majority of managers are not recognising a difference between overwork and hard work.

With 62% of managers believing that their employees aren’t ‘workaholics,’ just hard workers, the recruiter expressed concern that many employers were not prepared for their staff succumbing to overwork. David Leyshon, Managing Director of CBSbutler says: “It is extremely important for managers to recognise the difference between a member of staff who is working hard and putting in long hours, and one that is addicted to their work. Workaholics can suffer from stress and burn out, which can be detrimental to both the business and the employee. Ensuring employees have a work life balance is paramount if you want a happy, healthy and successful team.”

Will it happen again in 2011?

“While employees have enjoyed unexpected ‘snowlidays’, business leaders have frettedabout the impact on productivity. The Forum of Private Business (FPB) warned that absenteeism caused by the severe weather could cost businesses £230m a day, if they did not take steps to enable staff to work from home.

From ‘The Independent’, 10th January 2010

Keep your business engine running this winter!

Winter exposes your business to particularly harsh conditions and places unique demands on you and your employees. The snow crisis at the beginning of 2010 brought many businesses to a standstill.

Just as you would take steps to prepare your car for winter, topping up the anti?freeze and charging up the battery, it’s essential to ensure your business can keep running when the cold begins to bite. This involves examining your HR policies. As always, employment legislation can be tricky, so we urge you to take advice. However, once your policies and procedures are firmly in place, you will be better prepared for whatever comes your way, including volcanic eruptions and next summer’s holiday travel hold?ups!

Your business checklist for winter:

• Have you planned ahead?

Evaluate all real and perceived risks so you can formulate a strategy to protect your business. Start planning now and consider how you will handle future scenarios.

-  Which activities are fundamental to keeping the business going?

 - Which could be postponed?

 - What would be the impact if your key suppliers can’t meet your normal delivery schedule?

 - How many employees are needed to provide an essential ‘skeleton’ staff?

• Are you set up to work remotely?

Today’s technological advancements can enable an ‘any time/anywhere’ working philosophy.

www.iris.co.uk/exchequer

Put systems in place to enable your teams to work remotely, gain access to key, real?time information, and share information and documents online wherever possible.

• Stay alert

While you won’t want to encourage staff to stay at home unnecessarily, if bad weather looks likely, is there any work they could take home with them, just in case? Think of those tasks that require concentration and are difficult to do in a busy office, such as planning or report writing.

Are your staff equipped to work from home? What are the tools/processes required to ensure business agility and continued productivity? Consider how alternative working patterns or internal resources could be reallocated to ensure key activities are maintained.

• Do you know your employees’ and your own rights?

Legally, employees are not entitled to be paid for travel delays, unless the travel is considered as working time or, in some cases, where the employer provides the transport. Some organisations expect staff to take such time off unpaid or as holiday leave; others are more generous. Keep your policy on how absence ‘due to circumstances beyond our control’ up to date and ensure your staff know exactly what they should do in the event of bad weather. Be careful about forcing employees to take a day’s holiday. Employers cannot force employees to use their holidays without consent, unless their contract of employment specifically allows it. Employers also have to pay due regard to health & safety and be seen to be treating their employees fairly.

When it conducted a poll of employers’ responses to the winter 2010 snow, ‘HR Review’ found that:

• 49% asked people to work flexibly at home

• 25% required staff to treat absent days as holiday

• 14% overlooked it and had no policy

• 13% treated it as unpaid leave

The FDs 10 point plan for growing and thriving in 2011

1. Lessen uncertainty with fast access to data

In this new era, it’s all about being decisive. Smart planning and executionare more important than ever and FDs need to demonstrate exemplary professional judgment.

2. Automate more processes

Most organisations now run an automated accounting system but there are so many other financial management applications that can also return high levels of Return on Investment (ROI).

3. Rethink risk

Risk covers so many different parts of a business; it is almost an impossible task for the FD to watch over all of them.

4. Focus on the future

There will be a greater emphasis on forward-looking and analytical views, an area in which management reporting is currently seen as weak.

5. Create a leaner environment

Cost cutting is bound to still be high on the list of priorities for 2011 but having already cut back to the ‘core’, where do you look for further efficiencies?

6. Outsource

With many relying on smaller workforces, businesses are more likely to look for trusted partners that can help them expand their internal skill sets and help them to acquire and deliver new services

7. Share successes – disseminate information for universal buy-in to goals

There is no doubt that FDs hold a vital role and their organisations rely on them to communicate both successes and failures.

8. Keep tight budgetary controls

At the top of many FDs’ wish lists is the desire to increase cash flow and reduce costs.

9. Have a clear business plan – KPIs

Despite clear evidence that a business plan is one of the indicators of a successful company, according to the Department of Trade and Industry (DTI), fewer than 25% of SMEs have one.

10. Keep investing in IT

Finely honed business systems and processes are crucial to processing  large volumes of transactions quickly and containing transaction costs.

What does the New Year hold for those business owners looking to retire or sell their businesses? Well the news from the M&A market seems to be better than we have seen for a while. There are certainly more buyers around as both trade and private equity buyers are keen to invest and develop. There are also a number of foreign investors still looking to acquire here in the UK. But more interesting is that demand for good quality businesses has returned and the valuations achieved are more attractive than a few months ago.