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People Matter July 2019

Do you remember when holiday pay used to be simple

A landmark Court of Appeal case north of the border draws attention to an emerging blind spot for employers here in the Republic of Ireland. Following the ruling, the Police Service of Northern Ireland (PSNI) is facing a £40 million back-dated bill for incorrectly calculating holiday pay.

The issue centres around what constitutes normal pay. And while this case doesn’t have a direct legal bearing on affairs here, many of the issues overlap.

A reduction in income when receiving holiday pay compared to normal pay is seen as a disincentive to employees taking holiday. This crosses a red line for the EU for the statutory four weeks’ holiday leave they mandate. And this is precisely what has been happening when employees are paid on commission or work a regular pattern of overtime, if these earnings are not considered in holiday pay.

In case after case at the Court of Justice of the European Union (CJEU), judges have ruled in favour of more generous holiday pay interpretation. Phrases like payments which are “intrinsically linked” to the performance of the tasks required under the contract of employment, and when it’s necessary to work overtime “on a broadly regular and predictable basis”, are being used to describe what to include in holiday pay calculations.

One of the complications is that these definitions are not in harmony with our domestic law. This specifically excludes overtime pay from normal pay when calculating holiday pay. However, the weight of case law from Europe suggests that your steer should be taken from the EU rather than domestic law.

We would advise reviewing how you calculate holiday pay and starting to budget for increases if you find that what you include does not reflect the normal take home pay of your employees.

You only need to consider the four weeks of leave covered by the Working Time Directive. But in practice it may not be cost-effective for you to assess this in isolation. While there is a six-month limitation on back claims, there are ways that this could be challenged as has happened in the PSNI case.

For expert help, get in touch.

Top tips for the hospitality sector

Do you manage staff in hospitality or another sector renowned for tipping? What’s your policy on those tips? Some let front of house staff keep 100% of what they’re given. Others ask that it’s put in a pool and distributed amongst front of house and back room staff alike.

Each has their pros and cons. But one practice which is derided is withholding tips and using them within your overall cashflow to pay wages or other costs. Unsurprisingly, this practice is not looked on kindly by diners, who give the tips voluntarily to recognise good service.

When exposed, it can lead to reputational damage. You may have seen some high-profile restaurants in Dublin recently experiencing protests because of perceived unfair tipping policies.

It has also caught the attention of Regina Doherty, the Minister for Employment Affairs. She intends to write to restaurants found to be using tips to fund salaries, to flag their obligations to staff.

So we have said the practice is frowned upon, but what are the obligations? It has been something of a grey area, but it is not technically illegal to retain tips. Yet! After the Tánaiste Simon Coveney wrongly (but in good faith) said it was illegal earlier in the year, there are now strong calls for emergency legislation to outlaw it.

You’ll understand the numbers and the culture of your business better than anyone. But if you want some expert advice and fresh ideas on how best to structure your remuneration packages to recruit, retain and incentivise a winning team, get in touch with your local HR Dept adviser for a review.

Is hotdesking still hot?

As flexible working practices become more popular, it makes sense that hotdesking will follow suit. After all, why pay for vacant space?

Adopting hotdesking means you can gain efficiencies by downsizing your square footage. Or make your workplace more attractive and useful by transforming the redundant desk space. How about a break-out area or new meeting room?

But hotdesking is not a one-way street to success. If only! In one survey of 1,001 office workers by a transformational consultancy, 22% of respondents found hotdesking made bonding with colleagues more difficult. And nearly half said they wasted time setting up equipment. The worry of whether a desk is available will affect the well-being of some, too.

Other potential problems include hygiene concerns and the development of cliquey behaviour. However, with a well-managed approach – including desk scheduling and clear guidance on conduct – these obstacles can largely be overcome.

Workplace bullying

Five years ago, Ireland was branded the seventh worst European country for workplace bullying. Last year, 40% of people are reported to have suffered from it.

It’s not just the stuff we associate with the school yard, like name-calling. Indirect bullying such as excluding colleagues from projects or social events, and giving them humiliating tasks is harder to spot.

Mental health issues like stress and depression are a likely consequence. Be aware that young Irish women are more prone to depression than any of their European peers, which will have some overlap with this bullying issue.

Bullying is detrimental to business operations too. A toxic environment, absenteeism, retention issues and legal action could all ensue.

Starting with a disciplinary and grievance policy, good HR practice can be more than a match for bullying. Management training and communicating expected standards of behaviour to staff are important. And why not introduce an employee assistance programme? This can support your team with many difficult areas of life, not just work related stuff!. To find out more, give us a call.

How emotionally intelligent is your team?

In olden days people were expected to switch off their emotions when they went to work. Now it’s far more widely recognised that this isn’t possible. And that, actually, harnessing emotional intelligence can help individuals and organisations be more successful.

It has been established that emotional intelligence is a skill which can be nurtured with practice. The psychologist Daniel Goleman identifies five pillars: self-awareness, self-regulation, motivation, empathy and people skills. And it’s easy to see why these would be desirable traits in your workforce. In fact, a survey back in 2011 found that almost three-quarters of hiring managers rated emotional intelligence over IQ.

When trying to instil an emotionally intelligent culture, you should lead from the front. Staff who know that you genuinely care about them are far more likely to buy in to your plans. For guidance and advice, speak to The HR Dept.

Outrageous expense claims

What’s the most jaw-dropping item your employees have put through expenses? Can you beat lottery tickets, cosmetic surgery, half a cow? They’ve all actually happened. Admittedly in America! And while we can raise an eyebrow and perhaps smile at the nerve, it is a serious issue.

Expenses are to reimburse staff for travel and other costs incurred in the line of duty. While “half a cow” would be easy to spot, there will inevitably be greyer areas. These can be minimised through good line management drawing clear boundaries, rather than being left to the finance manager to notice.

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