Financial Implications

The following reflect the changes as they are introduced by legislation, and particularly with regard to the penalties, are worth bearing in mind when considering the benefits of keeping, or arranging to be kept up to date with legislation:-

Minimum Wage Increase (1 October 2010)
Compensation Limits (October 2009)
Fines for Minimum Wage Payers
Statutory Pay Increases
Smoking Penalties
Migrant Workers
Consultation Penalties
Corporate Manslaughter
Health & Safety Penalties
Budget Changes April 2009

1. Minimum Wage Increase (1 October 2010)

The adult rate will rise to £5.93
The rate for 18-21 year olds will increase to £4.92
The rate for 16-17 year old rate will increase to £3.64
The maximum amount an employer can count towards NMW pay as an accommodation offset is £4.51 a day, or £31.57 per week.

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2. Compensation Limits (October 2009)

The increases apply to dismissals occurring on or after that date:
Maximum compensatory award to rise to £66,200.
Maximum on a ‘week’s pay’ to calculate awards to increase to £380.
Maximum Redundancy Payment £11,400.

Failure to re-engage between £9100 and £18200
Discriminatory Awards £Unlimited
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3. Fine for Non-Minimum Wage Payers (January 2007)

The DTI has published a policy document containing its policy on issuing fines to employers who do not pay the minimum wage.
The policy document states that a fine (approximately £207 per week for each full time employee) will be levied if the minimum wage arrears have not been paid within seven days of service of an enforcement notice.
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4.Statutory Pay (April 2009)

Standard rate of Statutory Sick Pay rises to £79.15 per week.
Standard rate of Statutory Maternity Pay rises to £124.88 per week
Standard rate of Statutory Paternity Pay rises to £124.88per week
Standard rate of Statutory Adoption Pay rises to £124.88 per week
Statutory Guarantee Payment of £21.50 per day
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5. Smoking

An employer who fails to display a prominent ‘No Smoking’ sign is subject to a fixed penalty of (discounted to £150 if paid within 15 days). If unpaid (or the fixed penalty notice is challenged), a fine of up to £1,000 (and a criminal record) may be levied.
An employer who fails to take reasonable steps to prevent smoking (and displaying the ‘No Smoking’ sign is not enough) is liable to a fine of up to £2,500. There is no fixed penalty alternative.
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6. Migrant Workers

2008 sees radical changes being introduced into all aspects of Business Immigration with a penalty of £10,000 per illegal employee
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7. Consultation Penalties

Failure to enter into formal Information and Consultation agreements when so requested can result in a fine of up to £75,000
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8. Corporate Manslaughter

The Company faces the risks of £Unlimited fines, Remedial Orders, and adverse publicity
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9. Health & Safety

Fines range from basic breaches at a maximum £5,000, rising to £20,000, before then moving on to £Unlimited fines, and imprisonment of the Directors, dependent upon the nature of the breaches of the legislation, and the degree to which the Companies have complied and worked with the enforcement authorities. Cases are heard in the Magistrates and Crown Courts, and generally the former reflect the comparatively lesser severity.
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10. Budget Changes 2009

The Chancellor of the Exchequer, has announced that the maximum of a week’s pay for statutory redundancy payment purposes will increase from £350 to £380. Accordingly, the maximum statutory redundancy payment will rise from £10,500 to £11,400. However, the budget speech is silent about whether the maximum for an unfair dismissal basic award will also increase. It looks like that will stay at £350 (unless added in afterwards when the SI is drafted). The Chancellor was silent on when this change will come into effect.
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