With only a few weeks of the New Year behind us, food retailing is already high on the political agenda and the industry is preparing itself for the massive opportunity in the 2012 Olympics. Food retailers need to fully maximise the opportunities and ward off the threats that 2011 presents, and this means remaining fully compliant with changes and trends in employment and health and safety law. Michael Slade, managing director at Bibby Consulting & Support, offers food retailers advice on how to stay ahead of the game.
At Bibby Consulting & Support, a significant proportion of our client base is in the food and retail sectors, so we understand their unique pressures and demands. In the UK as our disposable incomes fall, our relative expenditure on food is increasing. Food prices have increased for some items by up to 11% year on year. This changes shoppers’ behaviour, as they look for the best deals. The 2012 Olympic and Paralympic games present a massive opportunity for food companies: with 14 million meals being served in 40 different locations with the supply of over 560 tonnes of fruit and vegetables. Those most prepared will benefit from these potential upsides and, indeed, find some opportunities for themselves among the threats for others.
Food retailers are in a highly competitive and fragmented market, and need to be able to react quickly and with agility to changing market conditions and stay ahead of the competition. This applies equally to the large retailer wanting to protect its reputation or the smaller trader wanting to avoid the high cost of complying with employment legislation.
The administrative burden of remaining compliant with employment law and health and safety legislation, faced by small businesses alone, totals an enormous £4.5 billion per year. And this year one large company (the BBC) has paid out almost £600,000 dealing with employment tribunal claims. So it pays to get it right. Keeping on top of changing legislation can be onerous as the law changes twice a year, and interpretation changes daily. At Bibby we provide independent up-to-the-minute help, often on a pay-as-you-go basis, for retailers who want to remain compliant. However, there are some aspects of the law to which we think food retailers should be paying particular attention this year.
Default Retirement Age
The default retirement age of 65 is being scrapped as of October this year, which means that it will be nigh impossible to lawfully retire people from employment. Notably, under the new legislation, retirement will no longer be seen as one of the six potentially fair reasons for dismissal. This new law, which will be fully implemented by October, could prove burdensome on employers, as it will make it difficult to allow for fair termination of employment due to retirement and they may need more support in managing more mature employees.
Agency Workers Regulations and the Equality Act 2010
To remain flexible and cope with the seasonal peaks of the food industry companies need to employ agency workers or temporary employees. Temporary employees may often be younger people – students for example – or older people who wish to work seasonally. The Agency Workers Regulations 2010, which are due to come into force in October this year, will affect any employer who uses agency workers. Previously, it may have been common practice to set agency workers onto lesser terms and conditions than permanent staff (typically fewer holidays, lower pay rates). With the new regulations agency workers need to be treated on a par with their permanent counterparts. Whilst different rights are effective from different points in time, equal pay is available from day one. This means that agency workers must be on the same rates of pay, for a particular grade, as other staff.
Of course the Equality Act of 2010, introduced in October last year, rendered pay secrecy clauses unenforceable so that employees are now at full liberty to discuss pay details with their co-workers. With pay and conditions now being rendered transparent, any company not being aware of either the Equality Act or the Agency Workers Regulations could be opening themselves up to potential tribunal claims.
This is a good example of where compliance with employment regulations can actually bring best practice and open up competitive advantage for employers. The best way to avoid problems when it comes to pay transparency is to have a pay reward strategy that is aligned with business strategy. Employers should review their reward strategy in preparation for the new legislation, or put one in place if they haven’t already done so. By having a strategy for rewarding staff that is applied consistently for objective reasons, for example around measurable competencies, and aligned to business needs this in itself becomes part of a company’s competitive success. For example, do we want to reward loyalty and long service , or is our reward strategy more about developing people quickly and fast tracking them on for high performance, appreciating that they may utilise this development to move on elsewhere?
Most employers want to avoid employment tribunals partly because of the costs involved, a straightforward unfair dismissal can cost up to £65,300. And there is also the considerable amount of management time and energy that is taken up by defending employment tribunal claims. This includes the stress of the tribunal itself, as well as the possible adverse effects on staff morale. Nevertheless, disgruntled employees have little or nothing to lose in taking their employer to tribunal – which is, we believe, one of the reasons why tribunals claims are on the increase.
Tough economic times provide fuel for this. The increase in redundancies coupled with the fact that, if you part company with an employee, they may not be able to secure another job easily. Last year figures showed a 56 per cent rise in tribunals claims. Bibby Consulting & Support helps companies to operate within the legal framework while protecting them from frivolous claims. As well as supporting companies when they receive a claim and providing them with all the necessary advice, Bibby is able to cover all costs associated with employment tribunals as part of its indemnity service.
Sunday working and Bank Holidays
Retailers can be particularly exposed when it comes to Sunday working. With Sundays being a popular day for all types of shopping, companies employ people on rotas and often recruit specifically for weekend working. Nevertheless, any shop employee, who is not employed to work Sundays only, at any time has the right to opt out of Sunday working, giving appropriate notice, and also a right not to be dismissed or subjected to any detriment for so doing. The employer has to inform employees of this right by way of an explanatory statement within two months of an employee commencing employment.
Bibby Consulting & Support welcomes the recent proposals to increase the qualifying period to bring unfair dismissal proceedings from one year’s continuous service to two years. Historically, prior to the latest changes, the qualifying criterion was set to two years’ continuous service, but this was reduced by the Labour Government in June 1999.
If the proposals are implemented, they will allow greater flexibility for employers to assess an employee’s absence, conduct, performance and overall suitability for a role, allowing a dismissal within two years service with little difficulty. Essentially this could work in favour of both employer and employee, as the existing 12 month period often forces the employer’s hand to make a decision on suitability for a role within the first twelve months of employment, whereas an additional twelve months would afford employers the opportunity to give employees extra time and support to allow the employees to improve. Nevertheless, this proposal is still at discussion stage and we will have to await further updates.
Finally, there is the consideration of the additional public holiday that has been announced to celebrate the Royal Wedding on 29th April 2011. Retail companies are likely to be open on that Friday, yet we have found that nearly all employees have assumed that this holiday is a given but this may not be the case. It is important to remember that employees have no statutory right to time off from work on a bank or public holiday (other than those who work in banks).
So where do you stand? Do you have to provide this as an additional holiday or not? If the contract of employment just outlines holiday entitlement as a set number of weeks, days or hours per year, then this extra public holiday can form part of an employee’s existing entitlement. Conversely, if the contract specifies annual holiday entitlement, with words alluding to bank holidays on top of this, without specifying the exact number, then there is an argument for this day to be in addition to the annual leave entitlement.
Lone Working and Security
Troubled economies and recessionary times are ripe for crime. During the last recession there was an increase in violence against staff, theft and burglary so it is widely expected that 2011 will continue this trend. The loss and damage to property and possible increase in insurance costs due to security breaches at your retail premises are undesirable, but there is often an emotional price to pay as well. In many food retail situations employees are lone working, and it is your duty as the employer to ensure their safety.
Many crimes are opportunistic and it can be a relatively simple matter to deny criminals such opportunities. The building’s security fittings and the actions of you and your staff should be designed to discourage criminals by making them feel exposed.
If any of your employees are exposed to lone working you will need to conduct a full risk assessment to investigate the specific hazards, evaluate the risks and decide on appropriate precautions. These might include training and awareness on conflict management and how to deal with customers’ issues and handling people who have been drinking. It will also include the selection and recruitment of staff – ie is this person capable and mature enough to handle the role?
Provisional statistics for the period April 2009 to March 2010 show that in the UK there were over 3000 fires in retail distribution premises, resulting in over 450 injuries and 7 deaths. The most common cause of fire in shops and retail premises is arson – the deliberate starting of a fire. Each year thousands of small businesses, including retail premises, are the subject of arson attacks.
The responsibility of managing fire risk was changed almost five years ago following the introduction of the Fire Safety Order of 2005. This order saw the responsibility switch dramatically from the Fire Authority to the “duty holder” within the business organisation. The act now covers every type of business building from public to commercial, and not just those businesses who were once thought ‘high risk’.
Unfortunately, human error, rather than failure in equipment or services, is all too often the underlying cause of fires and breaches of security. Fire and security precautions are therefore an essential requirement for your business. Training in the two key ‘disciplines’ of fire safety and security is an integral part of achieving a sufficient level of protection. The awareness and tasks involved can be made part of staff’s day-to-day activities, so that they become second nature.
At Bibby Consulting & Support we stress that businesses need to have a current and working fire risk assessment. If anyone is worried that their risk assessment isn’t up to the required standard we would be happy to review their assessment and provide further guidance with one of our team
For many retailers employment and health and safety compliance issues can become a massive drain on both time and resource. Businesses choose Bibby Consulting & Support because we are the experts in this field and are up to the minute with current legislation thereby helping our customers to manage employment issues without allowing them to become a drain on time and resource.
Bibby Consulting & Support
Tel: 08453 100 600