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UK Edition
23rd February 2024
 
THE HOT STORY
Companies no longer offer big pay rises to lure talent
People changing jobs are experiencing smaller pay increases, as companies no longer offer big pay rises to attract talent. Hays, one of Britain's largest recruiters, said that while pay increases of 20% for job changes were “commonplace” two years ago, a rate of around 5% is now more likely. The firm said a global slowdown in hiring has been deepened by this trend, because workers are less willing to move without a significant pay rise. James Hilton, Hays’ finance director, said: “In the great resignation, employers were screaming out for talent and were prepared to pay accordingly . . . [but] We’re now at much more normal levels of pay increases for changing jobs.” Dirk Hahn, Hays’ chief executive, added that many workers were “happy just having a job” amid reductions at some firms.
WORKFORCE
Parents warned of limited nursery choices for free childcare programme
Parents have been warned that they may not get their first choice of nursery when the government's free childcare programme for under threes begins next month. A survey of 1,000 providers found that 70% are already full and not planning to increase places for two-year-olds. Most nurseries are also not looking to raise capacity significantly when the scheme expands to children aged over nine months. While more than 80% of nurseries said that they expected to see an increase in demand for places, three-quarters claimed that they were not in a position to expand. Neil Leitch, chief executive of Early Years Alliance, said: "It is clear that despite the government's continued promises not all eligible families will be able to access the early years places they need. Years of sustained underfunding combined with a worsening staffing crisis and limitations on space means that many providers simply won't be able to increase places to meet the surge in demand."
Teachers top list of professions working unpaid overtime
A study by the TUC found that teachers topped a list of workers doing unpaid overtime. Teachers are doing more than four hours a week, costing them an estimated £15,000 in lost earnings, while two out of five teachers did unpaid overtime, according to the report. Other professions with high rates of unpaid overtime included health and social services managers. Patrick Roach, general secretary of the NASUWT, said: “This is unsustainable and unacceptable. World-class education cannot be built off the backs of overworked and underpaid teachers and headteachers.”
HIRING
Retailers court ex-Body Shop employees
Retailers including WHSmith and Holland & Barrett have encouraged staff affected by store closures and redundancies announced by The Body Shop to apply for current job vacancies. The retailers reached out on LinkedIn to employees of the ethical beauty retailer who might be impacted by the mass restructuring of the chain’s UK business. It comes after administrators at FRP said it would be closing nearly half of The Body Shop’s 198 stores and around 40% of head office jobs to “support a simplified business.”
LEGAL
Oxford judge rules in favour of tutors' employment status
Oxford must grant two tutors full employment status, a judge has ruled, in a decision that could affect many other teachers at the university. Rebecca Abrams and Alice Jolly, who taught on the creative writing master's course, claimed they were denied workplace rights due to their "personal service" contracts. The tribunal judge ruled in their favour, stating that they should be classified as employees with full benefits. Abrams described the ruling as "a vindication" and highlighted the university's failure to renew their contracts as an act of victimisation. In the judgment, the tribunal noted that the pair had demonstrated "a level of dedication and care for students that all educators should aspire to."
DIVERSITY, EQUITY & INCLUSION
Britain's only transgender judge resigns
Britain's only transgender judge, Victoria McCloud, has resigned from the High Court after claiming that she cannot remain on the bench "in a dignified way" and that she risks making the judiciary political. McCloud, who has presided over cases involving prominent figures, including Donald Trump and Jeremy Corbyn, transitioned in the 1990s and became the UK's first practising transgender barrister. In her resignation letter, McCloud expressed that it is no longer possible to be both transgender and a prominent judge in the UK. She also highlighted the rise of the "gender critical" movement and the impact it has had on her personal and professional life. She argues that as a result, "it has been open season on me and others." The judge, who will formally stand down in April, added that she feels that "the dignity of the court as well as personal dignity is at stake."
TAX
HMRC extends MTD to landlords and sole traders
As of 2027, HMRC will extend its Making Tax Digital (MTD) programme to landlords and sole traders with income over £30,000. The tax office announced plans for MTD in 2016 but has faced numerous delays over the years. There are now concerns that the extension of MTD for the self-employed will only exacerbate delays. Since 2019, MTD for VAT has been mandatory for all VAT-registered businesses above the £85,000 threshold and those that have voluntarily registered. HMRC is also in the process of moving all self-assessment returns online. MTD for Income Tax Self Assessment (ITSA) is set to replace the current system, so landlords and the self-employed will need to submit statements quarterly too. HMRC has now confirmed that all businesses and landlords earning over £50,000 will have to join MTD for ITSA from April 2026. This threshold will then fall to £30,000 the following April.
ECONOMY
PMI data suggests the recession is already over
Economists say the recession may already be over and predict that inflation could soon fall to 0% after data revealed that the private sector has grown at the fastest rate in nine months. The S&P Global Flash PMI hit 53.3 in February on an index where a reading above 50 represents expansion. February’s reading was up from the 52.9 recorded in January and is the highest since May. For the service industry, February saw a reading of 54.3, and while the manufacturing sector saw output continue to decline, the score of 47.3 is an improvement on January's reading. With the overall PMI in positive territory for four consecutive months, economists say GDP is almost certain to increase in Q1, marking a reversal on the downturn recorded in the second half of 2023.
INTERNATIONAL
US regulator charges BP manager's husband with insider trading
The US Securities and Exchange Commission (SEC) has charged Tyler Loudon, the husband of a BP manager, with insider trading in relation to BP's $1.3bn deal to acquire TravelCenters of America. The SEC alleges that Mr Loudon overheard his wife's work-related conversations about the deal and purchased TravelCenters stock before the merger was announced. Eric Werner, an SEC official, said Mr Loudon took advantage of his remote working conditions and his wife's trust to profit from information he knew was confidential. Loudon’s wife moved out of the house she shared with him and began divorce proceedings last June, the SEC added.
Workday faces claims of AI discrimination in hiring process
Workday is facing renewed claims of using AI tools that discriminate against job applicants. Derek Mobley, who has been turned down for over 100 jobs using Workday's platform, filed a proposed class action lawsuit alleging that the platform discriminates based on race, age, and disability. Mobley claims that by using Workday's platform, employers are essentially handing over their authority to make hiring decisions to the company. Workday has denied wrongdoing and stated that it ensures its products comply with applicable laws. The use of AI in the hiring process by US employers has raised concerns about potential discrimination. The US Equal Employment Opportunity Commission has warned employers that they can be held legally liable if they fail to prevent screening software from having a discriminatory impact. The case seeks unspecified compensatory and punitive damages.
New recruits in Japan's armed forces to be allowed to have longer hair
New recruits enlisting in Japan's Self-Defence Forces (SDF) from April will no longer be forced to sport buzz cuts or short hair. The new regulations allow male recruits to have longer hair on top, while women can have long hair as long as it doesn't impede the use of a helmet or hat. The change in hair regulations aims to promote diversity and inclusivity and boost recruitment numbers. Defence Minister Minoru Kihara stated that as the nation faces a workforce shortage, competition to secure talent has been intensifying. The number of active personnel in the SDF has fallen by over 7% since 1990, and the number of applicants has also decreased by about 30% in the past decade. Japan is considering other measures, such as increasing the maximum age for new recruits and scrapping the tattoo ban, to address the decline in recruitment numbers caused by a sliding birth rate.
China's high cost of raising children
China is one of the most expensive places in the world to raise a child, according to a report by the YuWa Population Research Institute. The cost of raising a child in China is 6.3 times the country's GDP per capita, compared to 2.08 times in Australia and 2.24 times in France. The report also highlights the negative impact of child-rearing on women's paid work hours and wages. The report calls for policies to reduce the cost of childbearing, including cash and tax subsidies, improved childcare services, and equal maternity and paternity leave. Without improvement, it says China's population will decline rapidly, affecting innovation and national strength.
OTHER
Universities face legal battle as students demand refunds
Universities in the UK are facing a legal battle as thousands of students demand refunds for the quality of education during the pandemic. Over 150,000 students have joined a mass litigation case against British universities, accusing them of breaching their duty to provide in-person teaching and facilities. The claims, if successful, could cost the UK's university sector around £765m. Negotiations between University College London (UCL) and the students' lawyers have broken down, leading to the case proceeding to trial. Lawyers estimate that up to 4m UK students could be eligible for refunds, with demands of around £5,000 each. Data obtained by The Times shows that more than 99% of students have received no compensation for the quality of teaching during the pandemic. Of the 109 universities that responded to its freedom of information requests, 64 said they had given no refunds or compensation over teaching quality during Covid-19.
 


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