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A week in HR: Employment law changes and cost-cutting


NewsLucie Mitchell reports on the employment legislation regulations that come into force this week, the extent of cost-cutting going on in UK businesses, and the worrying statistics that reveal that chronic disease will pose a serious threat to UK businesses in the next 20 years.

The main news this week is the new raft of employment law regulations that came into force on 6 April, including the flexible working extension, the new Acas Code of Practice, increased penalties for failure to pay national minimum wage, and a rise in statutory sick pay. To find out what the experts have been saying about the extension to the right to request flexible working and the new Acas Code, click here.

For a more detailed guide on the new legislation in force this month, see our employment law round-up.


For those employers who are anxious about the new flexible working arrangements and how it will affect the business, you may not need to worry too much. A survey by Croner, of over 2,000 adults, has found that 61% of full-time employees, who are parents of children aged 16 or under, will not be making a flexible working request. Just 17% said they intend to put in a request, and 22% said they were still unsure.


In other news, as we enter a new financial year, research from management consultancy Hay Group has revealed the extent of cost-cutting that UK Plc is facing as the recession bites. The findings showed that 90% of major UK firms plan a significant cost-reduction programme, £271 billion in cuts are planned this year as companies respond to the recession, and £12 billion is to be wiped off profits, with 620,000 jobs to go.

Russell Hobby, associate director at Hay Group, said: “Companies need to be honest with their staff about the extent of the problem and work with them to find solutions which share risk across the company and individuals.”

The study was based on independent research among senior finance managers in over 140 of the top 1,000 publicly-listed and privately-owned firms in the UK and Ireland.


A report out this week by the British Chambers of Commerce (BCC) has revealed that the UK recession is still very serious, and is likely to continue until the end of the year.

The economic survey of over 6,500 firms, employing nearly 900,000 people, also highlighted further expected increases in unemployment, with a peak of 3.2 million in the third quarter of 2010.

The sector worse affected is manufacturing, with the survey showing sharp declines in manufacturing exports, reaching 10 year lows. Further information can be found on the BCC website.


British Airways won a legal battle with its pilots over holiday pay last week, which saw three Court of Appeal judges throw out employment tribunal findings that the pilots’ holiday pay should be based on average earnings and not just basic pay. The ruling stated that pilots on holiday are entitled to basic pay wages only and not their flying pay or time away from base allowance. More information can be found here.

Speaking exclusively to, Alex Denny, a partner at Faegre & Benson, said that whilst this decision is significant for the aviation sector, its implications for the broader UK workforce are less clear:

“This is because the calculation of holiday pay for workers in the aviation sector must be considered under aviation legislation and not the Working Time Regulations 1998, which will apply to other sectors. The relevant aviation legislation is silent on the issue of calculation of holiday pay. The Working Time Regulations 1998 provide for calculation of holiday pay at the rate of ‘a week’s pay’ which will generally include additional elements of pay, such as commission or overtime payments.”


In health news, a new report by Bupa has found that, by 2030, an ageing workforce and higher rates of chronic disease among employees will pose a serious threat to the productivity of British businesses. The Healthy Work report revealed that, in the next two decades, the number of workers with diabetes or respiratory diseases will increase by at least 7% to over 4 million, while the rate of mental illness in the workforce will rise by 5% to affect 4.2 million workers. It also showed that, by 2050, the average age of retirement will be 68-years-old.

Dr Natalie-Jane Macdonald, managing director for Bupa UK Health Insurance, said: “Our report provides British businesses with an early warning of how the health needs of workers will change and, importantly, it gives them time to take action to keep their employees healthy, productive and at work.”


Finally, HR professionals working in solicitors’ practices can now become salaried or full equity partners in the firm. Previously, only fully-qualified solicitors could be appointed as partners, but as of 31 March, up to 25% of a firm’s partners can be non-lawyers, thereby creating ‘legal disciplinary practices’.

“These new rules open up excellent opportunities for HR specialists with a specialist background in the legal sector,” said Giles Murphy, head of assurance and business services at Smith & Williamson. “We could see a lot of forward-thinking law firms appointing their head of HR as partners in the next few months. I believe these firms will potentially gain an advantage over their competitors.”

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