Skip to main content

Don’t botch living wage response, warns employment expert

Share

A leading North West employment lawyer has warned businesses not to fall foul of employment legislation if the national living wage forces them into making redundancies.

A number of high profile employers have already said the national living wage of £7.20 per hour, being introduced in April 2016, will result in higher wage bills and could force them to scale back recruitment plans and lay off staff.

However, head of employment law at Harrison Drury, believes it could lead to some businesses breaching employment laws if they don’t follow the correct redundancy consultation procedures.

“Many businesses are worried about the impact the living wage is going to have on their recruitment policies and are either already scaling back on job creation, or looking at ways they can mitigate the impact, which may include having to consider redundancies.

“Employers need to be able to demonstrate that they have considered all the alternatives and redundancies should be a last resort. As always, all the correct consultation procedures must be followed, or it could get even more costly for employers as they fight employment claims for unfair dismissal.”

According to research conducted in September 2015 by the CIPD and the Resolution Foundation think-tank, more than half (54%) of UK employers say the national living wage will have an effect on their pay bill.

Four out of five (79%) retail employers, 77% of those in hospitality and 68% in the healthcare sector said they will be affected by the national living wage.

Asked how they would respond to the National Living wage, 30% of employers said they intend to manage the higher wage costs by improving productivity.

Taking lower profits or absorbing costs was the next most popular response (22%), followed by reducing overtime and bonuses (16%), raising prices (15%) and reducing the number of employees through redundancies or slower recruitment (15%).

To speak to the Employment team please contact 01772 258321.

Find out more about HR Compass, Harrison Drury’s specialist employment law product. HR Compass comprises three core components designed to offer seamless financial and business continuity protection for businesses. These include an employment law health check, expert fixed-fee employment law advice and an insurance policy to protect against the cost of employment claims.


Questions & Answers

Leave a Comment

Leave a comment

Your email address will not be published. Required fields are marked *


x

Manage your privacy

How we handle your personal data

The General Data Protection Regulation (GDPR) gives you more control over how companies like ours use your personal information and makes it quicker and easier for you to check and update the information we hold about you.

As part of our service to you, we will continue to collect, use, store and share your data safely and securely. This doesn’t require any action on your part.

For more detailed information view our Privacy Hub