RPOs should support clients, agencies and partners on holiday pay
7 November 2014
Recruitment process outsourcing (RPO) firms “have a duty” to support clients, agencies and partners to manage the implications associated with the holiday pay ruling, say industry leaders.
Fri, 7 Nov 2014Recruitment process outsourcing (RPO) firms “have a duty” to support clients, agencies and partners to manage the implications associated with the holiday pay ruling, say industry leaders.
The Employment Appeal Tribunal's full judgement, featuring the Bear Scotland vs Fulton case, highlighted that European law said ‘non-guaranteed’ overtime should be paid as part of annual leave and went on to say that UK law could be interpreted to say the same.
Daniel Solomon, head of communications and marketing at RPO firm Omni, told Recruiter: “Many of our partners recruit in industries that will really feel the impact of this change, including construction, retail and manufacturing, all of which must often pay employees significant overtime.
“Following the ruling, it’s important that RPOs and all partners working to recruit within those industries (and all sectors) adopt best practice. This means not only making adjustments to contracts to ensure compliancy, but providing transparency and support to clients and agencies, as good business practice and brand guardianship can only come with support and full visibility of the entire process and value chain.”
Richard Shea, managing director at RPO firm Futurestep, told Recruiter: “HRDs [HR directors] may be wary of the reaction of company stakeholders when they hear the latest proposal.
“It is the job of the recruitment consultant to support clients in navigating this power shift in the employer-employee relationship and demonstrate how an innovative approach can boost employee engagement and retention, whilst keeping budgets under control.”
Shea also said that the “modern employment contract” is no longer black and white, and companies that are ahead of the curve are already finding ways to ensure their workforce is productive, happy and intending to stay put.
Previous fears that employers may have to fork out millions in back pay, which could date back 16 years to 1998 when the Working Time Directive was enforced, have been abated. The judgement said that claims for unlawful deductions of wages have to be brought within three months of the deduction or within three months of the last of a series of unlawful deductions.
The Agency Workers Regulations mean that after 12 weeks in a job, agency workers are entitled to the same pay and basic contractual terms, including holiday pay. Having to factor in overtime further complicates calculations related to holiday pay, which is often accrued and paid at the end of short-term assignments. Some umbrella firms, such as Parasol, however, already take overtime into account when calculating holiday pay.
However, Belfast-based healthcare agency Lucas Love Healthcare, which ensures workers’ holiday pay reflects the hours they work, runs an in-house payroll process. In a statement, Sinead Polland, director and registered nurse manager at Belfast-based Lucas Love Healthcare, said: “We have made the conscious decision to process our payroll in-house despite several more cost effective options being offered by the many umbrella organisations operating and widely used within the agency sector.
“We wanted our staff to accrue holiday pay on every penny that they earned, regardless of whether it was over the perceived ‘normal’ working hours or indeed at the lower end of the earnings ladder.”
The Employment Appeal Tribunal's full judgement, featuring the Bear Scotland vs Fulton case, highlighted that European law said ‘non-guaranteed’ overtime should be paid as part of annual leave and went on to say that UK law could be interpreted to say the same.
Daniel Solomon, head of communications and marketing at RPO firm Omni, told Recruiter: “Many of our partners recruit in industries that will really feel the impact of this change, including construction, retail and manufacturing, all of which must often pay employees significant overtime.
“Following the ruling, it’s important that RPOs and all partners working to recruit within those industries (and all sectors) adopt best practice. This means not only making adjustments to contracts to ensure compliancy, but providing transparency and support to clients and agencies, as good business practice and brand guardianship can only come with support and full visibility of the entire process and value chain.”
Richard Shea, managing director at RPO firm Futurestep, told Recruiter: “HRDs [HR directors] may be wary of the reaction of company stakeholders when they hear the latest proposal.
“It is the job of the recruitment consultant to support clients in navigating this power shift in the employer-employee relationship and demonstrate how an innovative approach can boost employee engagement and retention, whilst keeping budgets under control.”
Shea also said that the “modern employment contract” is no longer black and white, and companies that are ahead of the curve are already finding ways to ensure their workforce is productive, happy and intending to stay put.
Previous fears that employers may have to fork out millions in back pay, which could date back 16 years to 1998 when the Working Time Directive was enforced, have been abated. The judgement said that claims for unlawful deductions of wages have to be brought within three months of the deduction or within three months of the last of a series of unlawful deductions.
The Agency Workers Regulations mean that after 12 weeks in a job, agency workers are entitled to the same pay and basic contractual terms, including holiday pay. Having to factor in overtime further complicates calculations related to holiday pay, which is often accrued and paid at the end of short-term assignments. Some umbrella firms, such as Parasol, however, already take overtime into account when calculating holiday pay.
However, Belfast-based healthcare agency Lucas Love Healthcare, which ensures workers’ holiday pay reflects the hours they work, runs an in-house payroll process. In a statement, Sinead Polland, director and registered nurse manager at Belfast-based Lucas Love Healthcare, said: “We have made the conscious decision to process our payroll in-house despite several more cost effective options being offered by the many umbrella organisations operating and widely used within the agency sector.
“We wanted our staff to accrue holiday pay on every penny that they earned, regardless of whether it was over the perceived ‘normal’ working hours or indeed at the lower end of the earnings ladder.”
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