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UK Edition
2nd September 2024
 
THE HOT STORY
Labour says four-day working week will not be imposed
Full-time workers' rights to ask for a four-day working week could be strengthened under UK government plans to increase flexible working. Employees would still have to work their full hours to receive their full pay but could request to compress their contracted hours into a shorter working week. Since April, workers have already had the right to ask for flexible working as soon as they start a job but firms do not have to agree. The government says it will not impose changes on staff or businesses. A spokesperson at the Department for Business and Trade said: "Any changes to employment legislation will be consulted on, working in partnership with business." Education Minister Baroness Jacqui Smith said that "flexible working is actually good for productivity." She said the four-day week being discussed would allow someone to work 10 hours a day for four days instead of working eight hours a day for five days. "You're still doing the same amount of work, but perhaps you're doing it in a way that enables you, for example, to need less childcare, to spend more time with your family, to do other things, that encourages more people into the workplace," she added. Employees already have the right to request flexible working. Employers must deal with requests in a "reasonable manner" but can turn them down "if they have a good business reason for doing so."
LEGAL
UK government pledges new law in autumn to boost workers' rights
The UK government says it plans this autumn to deliver the most "packed legislative agenda" for a new administration in decades, including the introduction of legislation to improve employees' rights. The Leader of the House of Commons Lucy Powell said the government will introduce laws that are intended to tilt power from employers to workers. The Employment Rights Bill will ban zero-hour contracts and outlaw fire and rehire tactics. "This new Labour Government is full of energy, full of ideas and full of drive to deliver our mandate for change," Powell said.
Next equal pay claimant on fight for recognition
Helen Scarsbrook, a sales consultant at Next, talks to the Guardian about the ongoing issue of unequal pay between female shop floor staff and their male warehouse counterparts. Following last week's landmark ruling by an employment tribunal, Scarsbrook says: "We always knew we weren't well paid . . . but it made me furious when I understood that the warehouse workers were paid more." The tribunal's decision could influence similar claims from female staff at major supermarkets including Asda and Tesco. Despite Next's intention to appeal, the ruling is seen as a significant step towards addressing gender pay disparities in retail. Scarsbrook, who has worked at Next for nearly 22 years, hopes the judgment will inspire other women to come forward and seek respect and fair compensation for their work.
CBI staff must ask permission to drink at summer party
Staff attending the Confederation of British Industry’s summer party must ask permission to consume alcohol after a string of misconduct claims almost sunk the lobbying group last year. New rules state that staff-only events can only involve alcohol if food is served, but conditions are tighter for the upcoming London summer reception, which is outward-facing and expects to include over 100 leaders from business and politics.
Yellow Pages CFO in court accused of fraud
Tony Bates, the former finance chief of Yellow Pages, has been charged with multi-million-pound fraud, and is accused of concealing the company's true financial position for personal gain. Shareholders allege that Bates provided the Stock Exchange with false information, leading to the company's collapse. Meanwhile, Bates and his fellow executives shared a £6.5m payout in the year of the company's failure. Bates denied all ten counts of fraud during the initial hearing at Highbury Corner Magistrates' Court. The prosecution is a private case initiated by former shareholders in Yell after the police and regulators declined to act. Bates' barrister, Stuart Biggs, argued for the case to be dismissed, stating: "This is a criticism of Mr Bates in his role as chief financial officer of a group of companies that went through a restructuring." But Judge Brennan referred the case on to Reading Crown Court for its next hearing, in October.
CORPORATE
Spending on consultants hit £3.4bn in 2023-24
Figures from outsourcing data company Tussell show government spending on consultants reached £3.4bn last year, £1.3bn (62%) higher than in 2019-20. The figures come a week after it was revealed that the new Labour government had awarded KPMG a £223m contract to train civil servants. Labour peer and accounting professor Prem Sikka said: “If you are using consultants, that means you have no in-house, institutionalised knowledge, because when these consultants walk away, whatever they know goes with them. This then makes you forever permanently dependent on consultants.” Responding to the report, a government source said: “Through our plan to halve the amount spent on consultancy services in coming years, we are determined to deliver a saving of £550m in 2024-25 and £680m in 2025-26. We will develop a plan for a more efficient and effective civil service, including bold measures to improve skills, harness digital technology and improve public services.”
The rise of the corporate influencer
The rise of LinkedIn influencers is transforming corporate marketing strategies, as seen with Deloitte's appointment of Lara Sophie Bothur as the firm's first full-time corporate influencer for operations in Germany, Australia and Switzerland. Her posts on "tech for good" have garnered 400m impressions, significantly outperforming Deloitte's own posts. A study by Refine Labs revealed that personal LinkedIn profiles generate nearly three times the impressions and five times the engagement compared to corporate profiles. The trend is not limited to established firms. Start-ups like Waterboy and SET Active are also leveraging influencers to enhance brand visibility. Meagan Loyst, founder of Gen Z VCs, says companies will need to fight hard to retain influencers who can make a yearly corporate income in just a few partnerships on their own.
REMUNERATION
EY cuts bonuses and pay rises for UK tax staff
City AM picks up on news that EY has reduced bonuses and pay rises for its UK staff, particularly in the tax advisory division, where base salary increases have dropped to 2.2% from 6.6% in 2023 and 10% in 2022. As the FT first reported, the firm has also dismissed a small number of partners as it navigates weaker demand for its services. A spokesperson for EY stated: “Our UK tax practice continues to grow and we are investing across the business,” highlighting that pay adjustments depend on individual and business unit performance. Despite tax advisory being more resilient than other divisions, the cuts reflect the broader challenges faced by Big Four firms in a tough economic climate.
STRATEGY
Goldman Sachs to axe 1,300 jobs
Goldman Sachs is set to reduce its global workforce by over 1,300 employees, representing approximately 3% to 4% of its total staff, as part of an annual review aimed at eliminating low performers. According to the Wall Street Journal, the layoffs have already commenced and are expected to continue throughout the fall. Goldman Sachs has not yet provided a comment regarding these developments.
WORKFORCE
Mick Lynch: Media is peddling scare stories about unions
Mick Lynch, the secretary general of the National Union of Rail, Maritime and Transport Workers (RMT), says in the Guardian that with a Labour government in place, unions are better positioned to improve conditions for British workers. He rails against recent media portrayals of unions as a threat to the country and insists the RMT is not affiliated to any political party. “September will be the first TUC congress under a Labour government in 15 years. Instead of peddling scare stories about unions that bear no relation to the truth, the media should see the gathering as the vital voice that all workers need if we are to make the changes in society we want to see and encourage Labour in the right direction.”
REGULATION
FCA under pressure over SMR enforcement
The Financial Conduct Authority (FCA) is facing increasing pressure to enhance enforcement actions against those breaching the watchdog's senior manager's regime, after recent data revealed that only half of the 68 investigations initiated since 2017 have been closed. Mark Turner, managing director of financial services compliance at Kroll, highlighted the negative impact of prolonged investigations on individuals. Dr Susan Hawley, executive director of the campaign group, Spotlight on Corruption, said the lack of punishment dished out by the regulator showed that the FCA is "still dropping the ball on its enforcement."
SUSTAINABILITY
Nearly half of FTSE 100 have to restate climate scores
Recent analysis by Deloitte reveals that 46 companies in the FTSE 100 have had to restate their climate and sustainability metrics for the previous year, raising concerns about the accuracy of net-zero claims. Approximately half of these adjustments stemmed from changes in data collection methods, while nearly a third were due to errors made by company boards. The majority of restatements focused on greenhouse gas emissions, particularly "scope 3" emissions, which include indirect emissions from activities such as business travel and waste disposal. Steve Farrell, head of sustainability assurance at Deloitte, noted that stakeholders are increasingly scrutinising sustainability data, saying: "What's really important is how they're monitoring those because there are decisions that will be taken based on companies' ESG data." Drax Group recently faced a £25m penalty from Ofgem for inaccurate sustainability reporting, highlighting the growing importance of accurate ESG metrics. Deloitte anticipates that such restatements will become more common as reporting standards evolve.
TAX
Sky Sports pundit ordered to pay £700,000 to HMRC
Stuart Barnes, the Sky Sports rugby pundit, has been ordered to pay £700,000 in tax after a tribunal ruled he underpaid between 2013 and 2019. Despite winning a previous case against HMRC at the First Tier Tribunal, the Upper Tribunal overturned that decision, stating he should have been paying employment tax during his time at Sky. The tribunal concluded that Barnes was not taking on financial risk, as Sky held the exclusive contract for his services. Dave Chaplin, from consultancy IR35 Shield, said: “This case underscores the need for freelancers and their clients to ensure that their contracts and working practices accurately reflect the true nature of their relationship.”
Unite says wealth tax could fund more pay rises
The Unite union has proposed a motion at the Trades Union Congress urging Chancellor Rachel Reeves to implement a wealth tax targeting the richest 1% to fund public sector costs. This tax could generate £25bn annually, Unite claims, potentially allowing for a 10% pay rise for public sector workers.
INTERNATIONAL
NTUC plans to form union-like bodies for Singapore's platform workers
Singapore's National Trades Union Congress (NTUC) has announced plans to represent cabbies, ride-hailing drivers, and freelance delivery workers, collectively known as platform workers, pending the passage of the Platform Workers Bill. Currently, platform workers cannot form unions as they are not classified as employees. The new bill, tabled on August 6, aims to create Platform Work Associations, which will have similar legal powers to trade unions, allowing them to negotiate collective agreements with platform operators. NTA president Ken Tan explained: “Once the new platform workers law is in effect . . . we will be in a stronger position to speak up and negotiate better benefits and outcomes.” If enacted, the bill will also standardise work injury compensation and increase contributions to the Central Provident Fund for platform workers. The NTUC aims to grow its membership among platform workers, targeting 60%-70% participation.
 


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