Wednesday, 2 August 2017

Industry reacts to government’s state pension age hike

The state pension age increase from 67 to 68 is to be brought forward
Business leaders have reacted to the government’s announcement that the pension age will rise from 67 to 68 by 2039.                                  
It follows the recommendations of the second Independent Review of the State Pension Age report by former CBI director general John Cridland, proposing that those under the age of 45 may have to work a year longer.
The rise in the pension age to 68 will happen between 2037 and 2039 rather than by 2044 as originally proposed, and will affect those born between 6 April 1970 and 5 April 1978. The government said the new rules would save the taxpayer £74 billion in NI contributions by 2045/46.
Secretary of state for work and pensions David Gauke, who made the announcement, told the Commons: “As life expectancy continues to rise and the number of people in receipt of state pension increases, we need to ensure that we have a fair and sustainable system that is reflective of modern life and protected for future generations.”
However, shadow work and pensions secretary Debbie Abrahams said Labour would leave the state pension age at 66, adding that the pension hike was “astonishing” given life expectancy was beginning to stall, with long-standing health inequalities between different income groups and regions in retirement.
“We will look again at the emerging evidence with a view to guaranteeing a secure and healthy retirement for the many, not just the few,” she added.
Head of retirement policy at Hargreaves Lansdown Tom McPhail said the move was bold given the controversies the government faced in the general election over its manifesto pension policies such as the triple lock.
“They’re asking around six million people to wait longer for their state pension,” he said. “It’s a necessary measure but they are not making popular political choices and are not going to get credit for pushing ahead with making people work longer.
“However, the implementation of this is being passed to the next government as they won’t need to begin legislating on this until 2023, so there’s an element of kicking the can down the road,” he added.
Former pensions minister and director of policy at Royal London Steve Webb said that given the more aggressive options on the table Cridland's decision was a compromise.
“It’s a case of us paying for living longer and the government has a choice on which generation has to pay for it,” he added.
However, chief executive of the Centre for Ageing Better Anna Dixon said urgent action was needed from government and employers to make the labour market fit for purpose. She cited flexible arrangements at work.
“Inequalities in life expectancy and healthy life expectancy mean that many people will find it impossible to work until state pension age,” she said. “Without additional support or mitigating policies from government, pensioners will face financial difficulties and hardship in later years. More radical benefit reform should be considered for those with long-term health issues and disabilities.”
Former pensions minister Ros Altmann rejected Labour’s proposal to keep the state pension age at 66 because it would put a heavy tax burden on the younger generations.
She proposed the government move away from a magic age at which people should aim to stop working and live on a state pension. Instead she proposed a flexibility in state pension age, reflecting their health and length of working life.
“At the moment the state pension is only flexible for those who are healthy and wealthy enough not to need it at state pension age,” she said. “The central issue is whether the state pension should run on a one-size-fits-all approach, based purely on estimates of the average, or should have some flexibility to account for people's increasingly flexible lives.”
Director of WEALTH at work Jonathan Watts-Lay said: “It’s vital that those approaching retirement review how much retirement income they will need, or would like, as early as possible, to get a better understanding of what they need to be doing now.
“If there is a shortfall up until the point of receiving the state pension saving more now or working longer than planned could make a real difference, if either option is possible for them,” he added.

My Comment:  I think I may have said previously,   I don't just report this material,  I live it too. All those around me including my own grown up children are caught by this, I can see vast armies of employees helping each other in and out of the work place on walking frames, and areas of the workplace having to be set aside for afternoon naps!      Actually it's not funny!  
   This piece on HR MAGAZINE site,   and my thanks to them for this article  see them:

Rogue employers could face jail

The director of labour market enforcement has called for greater resources to help prosecute perpetrators

Firms that use illegal practices, such as paying under the minimum wage or breaking modern slavery laws, could face prison, according to the United Kingdom Labour Market Enforcement Strategy Introductory Report by the government's director of labour market enforcement David Metcalf.
The report calls for three bodies – HMRC’s national minimum wage enforcement team, the Gangmasters and Labour Abuse Authority, and the Employment Agency Standards Inspectorate – to be given better resources to help them crack down on rogue bosses.
Under the current system many workers in exploitative roles do not come forward and report their employer, according to the report. This may be because they are afraid of losing their job, because of a cultural or language barrier, or because they are intimidated into staying silent.
As a result employers acting unlawfully are often not prosecuted for ignoring the law. However, with increased policing power investigators may be able to build a case against them.
Adrian Martin, partner in the employment team at law firm Burges Salmon, told HR magazine that most employers are already compliant. “In many cases where firms are not compliant it is the result of an error or a misunderstanding, rather than deliberate non-compliance” he said. “This move is targeting rogue employers who have set out to exploit low-paid people.”
Martin advised businesses to look to their supply chain to check it is compliant too. “Ensure they [suppliers] aren’t breaking labour laws,” he said. “This can protect you from reputational issues in the future.”
Paul Griffin, head of the employment practice at Norton Rose Fulbright, warned that Metcalf's suggested approach might have unintended consequences.
“This may have the desired effect, assuming the problem is as bad as is thought, but there is the risk that larger powerful retailers would simply pass the cost to suppliers and not be affected by the financial element of the proposed liability,” he said. “The reputational effect on businesses where their suppliers abuse workers’ rights should not be underestimated, so among the larger retailers it will be interesting to see whether the evidence reflects a wider problem that needs addressing.”

My Comment:  Generally,  employers who behave in this way don't seek employment law advice, (maybe they should!)   so I don't often have deal with these distasteful practices,  however, I do sometimes get calls from desperate workers looking for help, I have to redirect them to an appropriate source.   It is regrettable to think that this is going on at all in  Britain.
    as always my thanks to HR magazine for this piece  see them at:

Tribunal fees to be scrapped

The Supreme Court has ruled that the fees – introduced in July 2013 – are unlawful
Employment tribunal fees look set to be scrapped after a landmark court decision this morning.
The Supreme Court has ruled that the fees – introduced in July 2013 – are unlawful, and thousands of people who paid to take their employers to tribunals will need to be refunded. Fees can be as high as £1,200, and have caused a fall in the overall number of tribunal cases.     
The decision is a result of a legal challenge from public service union UNISON. Its general secretary Dave Prentis described the ruling as a “major victory” for employees. “The government is not above the law,” he said. “But when ministers introduced fees they were disregarding laws many centuries old, and showing little concern for employees seeking justice following illegal treatment at work.
“The government has been acting unlawfully, and has been proved wrong – not just on simple economics but on constitutional law and basic fairness too. It’s a major victory for employees everywhere. UNISON took the case on behalf of anyone who’s ever been wronged at work, or who might be in future. Unscrupulous employers no longer have the upper hand.”
"This is a stunning victory for UNISON and easily the most significant employment case for many years," commented Nicholas Robertson, head of employment in London at Mayer Brown.
Luke Bowery, a partner in the employment team at UK law firm Burges Salmon, explained that the ruling will come as a surprise to many. “The decision is unexpected in light of the previous court decisions to date,” he said. “However, the dramatic fall-off in tribunal claims since then has led not only unions but also many employers and business groups to question whether the fee levels were set too high.”
However, Beverley Sunderland, managing director of Crossland Employment Solicitors, said that this does not mean tribunal fees will necessarily be gone for good. “The government’s next move will be to try and introduce legislation to properly impose tribunal fees,” she said. “But, as they do not have a majority and given the clear and unequivocal statistics of the impact of fees on the numbers of claims brought, it is difficult to see how any such legislation will get through parliament as no MP, whatever their politics, is likely to vote for it.”
Robertson said, however, that the number of tribunal claims brought may still not return to former levels once the fees are dropped. “It remains to be seen if tribunal claims will return to the levels [seen] before the introduction of the fees regime," he said. "My view is that they will not return to those levels because the Acas mandatory conciliation scheme will continue to encourage parties to settle claims before litigation. Now that the fees regime for employment tribunals has gone, I suspect employers will be more likely to settle at the Acas stage rather than waiting to see if claimants follow through and issue a claim.”
This ruling coincides with the publication of the Taylor Review into modern working practices, which called on the government to reduce the cost of tribunal fees but did not go as far as recommending that it abolish them.
Speaking on BBC Radio 4, the report's author Matthew Taylor said that he recommended there should be a free preliminary judgement before proceeding to a full trial. "We recognise in the report that... it would be better if those fees weren’t so high and we encourage the government to continue to look at that issue,” he said.

My Comment:    I had said all along that this would be challenged to the very top.  Something had to be done about the volume of frivolous and "no hope" claims that were submitted,   but,  on balance this was a step too far and excluded genuine cases from obtaining justice.
My thanks as always to HR Magazine for their source material see them at: