UK jobless total falls to 1.64 million

The UK unemployment total fell by 52,000 to 1.64 million between April and June, official figures indicate.

The UK’s unemployment rate remained at 4.9%, the Office for National Statistics (ONS) said.

According to the ONS, the number of people on the claimant count in July, the first month since the Brexit vote, was 763,600, down 8,600 from June.

Wages excluding bonuses rose 2.3% in the three months to June compared with a year earlier, the ONS said.

Including bonuses, earnings growth was 2.4%.

“The labour market continued on a strong trend in the second quarter of 2016, with a new record employment rate,” said ONS statistician David Freeman.

“However, little of today’s data cover the period since the result of the EU referendum became known, with only claimant count and vacancies going beyond June – to July for the former and to May-July for the latter,” he added.

The jobless total is now at its lowest for eight years, while the unemployment rate is at its lowest since the summer of 2005, according to the ONS figures.

The employment rate reached a record high of 74.5%, with 31.8 million people in work in the three months to June – 172,000 more than the previous quarter.

Brexit ‘labour market toll’

Howard Archer of IHS Global Insight said that the UK economy showed “impressive resilience in the run-up to the EU referendum and the immediate aftermath of the vote to leave”.

However, he warned: “It is premature to draw any firm conclusions from this… It remains likely that softening economic activity and heightened uncertainty will take a toll on the labour market over the coming months.”

Hargreaves Lansdown economist Ben Brettell said that while forward-looking surveys to gauge business confidence had suggested the Brexit vote had delivered a shock, “surveys are driven by sentiment, and can therefore overreact”.

“The dramatic fall in confidence may not ultimately be borne out by activity, and today’s claimant count number is a tentative sign that things might not turn out as bad as many predicted,” he said.

Anna Leach, head of economic analysis and surveys at employers’ organisation the CBI, said that before the Brexit vote, “the UK’s jobs market remained in rude health, though vacancies have continued to tick down since the beginning of the year.”

She said the Bank of England had been right “to act swiftly to shore up confidence and keep money flowing through the economy” by taking steps such as lowering interest rates.

She called on the government to “make ambitious decisions in the Autumn Statement that will secure the UK’s economic future as changes to trade, regulation and access to skills loom on the horizon”.

Suren Thiru of the British Chambers of Commerce said: “Labour market indicators tend to lag behind the wider economy, so it is likely to be some time before the full post-referendum employment picture emerges.

“However, more needs to be done to boost business confidence, so that firms can continue to grow and recruit.”

Source – BBC

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Fathers too nervous to ask boss for parental leave?

Only a fraction of fathers have taken advantage of shared parental leave rules and taken extended time off work to care for a new baby, according to the first figures on take up.

Records held by Revenue & Customs showed that only 3,000 parents took up the offer in the first three months of this year. Although it was introduced in April 2015, this is the first time that the figures have been separated out from other forms of parental leave.

It compares with 52,000 fathers who took paternity leave last year and 155,000 mothers. More than 650,000 babies are born in the UK each year, suggesting that the vast majority of fathers would use holiday entitlement or take no time off at all after the birth of a child.

Shared parental leave allows parents to divide up a year of leave between them, often with the mother having time off first and then the father when the baby is six or nine months old.

The figures were compiled by the legal firm EMW. Lawyers said that the reasons for not taking up shared parental leave were often financial, or bound up with job insecurity, with men thinking they would be seen as dispensable or uncommitted if they took months off to be with a baby.

Jon Taylor, principal at EMW, said that hundreds of thousands of families could be missing out by not embracing the new system.

“Many new parents are still unaware of their new rights or are unclear about how the system will work in practice. Many of the old concerns which have long acted as a disincentive to taking extended maternity or paternity leaves still remain,” he said.

New parents were acutely aware that even a temporary fall in income could be a struggle at such an expensive time, he said.

“Uncertainty over the impact time off will have on individual’s careers also looms large. Fathers in particular may still be concerned over the perceived stigma attached to asking for greater flexibility to take a greater role in their child’s care, in case they appear to be less ambitious or committed as a consequence. However, employers have an obligation to accommodate eligible requests in the same way for fathers as they do for mothers.”

Tom Beardshaw, paternity specialist with Executive Coaching Consultancy, said that the main reason why men were not embracing the scheme lay in its format. “At present men can only take shared parental leave if their partner loses it from her own allocation, and why would any new mother want to do this?” he said.

Mr Beardshaw said that it was poorly designed and “use it or lose it” paternity leave would be more successful.

“We know from successful international models that when men and women are given the same entitlement to parental leave, they take it up in large numbers.”

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Job vacancies up 8% as shortage of skills takes its toll

The number of jobs advertised last month was higher than at the same time last year, suggesting that Britain’s booming jobs market was not affected by the EU referendum result, according to Reed.co.uk, the recruitment website.

There were 8.2 per cent more vacancies on offer last month compared with a year before, it said, as employers continued to take on new staff.

Skills shortages are high in many sectors of the economy because of record employment levels, which mean there are fewer skilled workers looking for a job. The figures from the UK’s biggest jobs site show that more than two thirds of all sectors in the economy were healthier than they were last year, with education, construction and security leading the way, while Northern Ireland and northwest England saw the fastest increase in job vacancies.

Several surveys have shown that while optimism has decreased among businesses, job cuts have been small as employers take a “wait and see” approach over Brexit negotiations.

Reed.co.uk reported that the number of jobs advertised in manufacturing also showed an annual increase, of 18.4 per cent, which it said was an “especially encouraging sign for longer-term economic prospects” after a survey of business activity showed manufacturing output dropping to its lowest level since February 2013.

However, the number of vacancies in banking and energy fell 15.8 per cent and 14.7 per cent, respectively. The fall in gas and oil prices has hurt staffing levels in the energy sector, while banks have been hit by customers deserting the high street for digital channels and uncertainty surrounding Brexit. Last week Lloyds said that it was cutting 3,000 jobs and closing 200 branches.

The number of jobs being advertised fell marginally from a month earlier, dropping from 8.9 per cent in June to 8.2 per cent in July. In addition, the average rate of growth for job vacancies for 2016 so far is 9.6 per cent, compared with 28 per cent for the same period a year ago, suggesting that there has been an overall decline in the number of employers looking to hire new staff.

James Reed, chairman of Reed.co.uk, said that the Bank of England should cut interest rates to help to avoid a downturn and any rise in job cuts. “This is an important moment for policymakers because decisions made this summer will have an impact for many years to come. If it was up to me, I would aggressively cut taxes and interest rates to avert a recession,” he said.

A study by Totaljobs.com, another recruitment website, said that 44 per cent of companies it questioned said that Brexit would not affect the number of people they hired. About 54 per cent said they would not delay their hiring plans, while three fifths said they would not cut jobs because of Brexit.

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Government Statement: Status of EU Nationals in the UK:

The government have clarified in an official statement that there has been no change the rights and status of EU nationals in the UK and UK nationals in the EU following the EU referendum. At the present time the UK remains a member of the EU. Once Article 50 has been triggered, the UK will still remain part of the EU until the two year negotiations have concluded. In the long term, once the UK has left the EU the government fully expects that the legal status of EU nationals living in the UK, and UK nationals living in the EU, to be properly protected.

EU Nationals who have greater than 5 year’s residency

  • EU nationals who have lived continuously and lawfully in the UK for at least 5 years will automatically have a permanent right to reside and there will be no requirement to register for documentation to confirm this status.
  • EU nationals who have lived continuously and lawfully in the UK for at least 6 years are eligible to apply for British Citizenship.

EU Nationals who have less than 5 year’s residency

  • EU nationals do not need to register for any documentation in order to enjoy free movement rights or responsibilities
  • For those that decide to apply for a registration certificate there has been no change to government policy or process and applications will continue to be processed as usual
  • Non-EU family members of EU nationals must continue to apply for a family permit if they wish to enter the UK under UK law if they do not have a residence card issued by a member state.
  • Extended family members of EU nationals who are also EU nationals must continue to apply for a registration certificate, and a residence card if they are a non-EU national, if they wish to reside in the UK.

Irish Nationals

  • Irish nationals enjoy separate rights which means they are treated in the same way as British nationals in most circumstances and there has been no change in this position.

Croatian Nationals  

  • Croatian Nationals might need to continue to apply for a registration certificate to be allowed to work in the UK under the transitional arrangements that were put in place when Croatia joined the EU in 2013.
  • The type of registration certificate that they might need depends on whether they need permission to work in the UK, and what they will be doing. Again, there has been no change to government policy or process, and applications will continue as normal.

Removal of UK nationals from the UK

  • There has been no change in the circumstances in which someone could be removed from the UK.
  • As was the case before the referendum, EU nationals can only be removed from the UK if they are considered to pose a genuine, present and sufficiently serious threat to the public, if they are not lawfully resident or are abusing their free movement rights.

https://www.gov.uk/government/news/statement-the-status-of-eu-nationals-in-the-uk

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‘Turbulent times for employers could be made worse by Brexit’ – REC

Half of UK employers (51 per cent) anticipate skills shortages for permanent staff, according to the latest JobsOutlook survey by the Recruitment & Employment Confederation (REC).

The REC’s latest survey of 600 employers reveals that 30 per cent of organisations are operating at full capacity, while a further five in ten (50 per cent) have only ‘a little’ spare capacity to meet any increase in demand.

Following the release of official data last week showing the employment rate is at a record high of 74.2 per cent, the REC’s JobsOutlook report forecasts that candidate availability will tighten further. Sixty-eight per cent of employers say they will maintain their existing permanent workforce, while one in five (20 per cent) expect to take on more permanent staff in the next three months.

Employers flagged a shortage of candidates to fill permanent and temporary roles in areas such as engineering, technology, health and social care and hospitality.

REC Chief Executive Kevin Green says:  

 “The UK jobs market is at a tipping point, with the decision over our EU membership making a difficult situation worse. Whilst hiring has slowed down in recent months due in part to the Brexit question and global economic uncertainty, employers are telling us that finding candidates to fill vacancies is a difficult challenge.

 “A vote to remain in the EU could release pent up demand, with a mini hiring boom over the second half of the year. On the other hand, a vote to leave is likely to see employers abandoning projects, shelving new expenditure and implementing hiring freezes during a prolonged period of uncertainty. We also have major concerns about the impact Brexit would have on lower-paid sectors which rely heavily on workers from the EU, such as hospitality, healthcare and farming. It is difficult to see how an Australian points-based immigration system would meet the needs of businesses in these sectors when British applicants are already in short supply.

 “We have heard a lot of rhetoric calling for low-skilled EU migration to be curtailed, but what we haven’t heard is a viable explanation of how employers and our public services would be able to make up for the short fall in workers if free movement was removed.”

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Permanent placements fall for first time since September 2012 (REC Report on jobs – July 2016)

REC Report on Jobs – July 2016

Key points:

  • Brexit concerns hit recruitment activity in June
  • Pay growth slows further
  • Candidate availability continues to deteriorate

Summary:

The Markit/REC Report on Jobs – published today – provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies.  

 Drop in permanent placements…

The number of people placed in permanent positions fell in June. Although slight, it was the first decline in 45 months. Anecdotal evidence suggested that uncertainty in the lead-up to the EU referendum (data were collected between 13-24 June) had heavily impacted on activity. 

         …while temp billings rise at slower rate

Although temporary/contract staff billings continued to increase in June, the rate of growth eased to a nine-month low. Brexit uncertainties were frequently cited by survey respondents.

 Pay growth continues to ease

June data pointed to a further easing of permanent salary growth. The latest increase was the least marked since September 2013. Temp pay also rose at a slower pace, hitting a three-month low.  

 Further drop in candidate availability

The availability of staff continued to fall in June. Permanent candidate supply decreased at a marked pace that was sharper than in May, whereas temp availability fell at the slowest rate in 33 months.

 Regional and sector variation

London saw a further drop in permanent placements, with the rate of decline the sharpest since December 2012. Scotland saw broadly unchanged placements, while the Midlands and South registered weakening rates of growth. The North posted the strongest increase overall.

 Agencies in the South of England reported stagnant temp billings during June, while slower increases were recorded in the Midlands, North, London and Scotland. 

 Higher demand was signalled for both public and private sector vacancies. The stronger growth was indicated for the latter, with private sector temporary workers seeing the fastest increase overall.

 Engineering staff topped the ‘league table’ in June, recording the strongest growth in permanent vacancies of the nine monitored categories. In second place was Nursing/Medical/ Care. Hotel & Catering staff on the other hand saw only a modest rise in demand.     

 Nursing/Medical/Care workers saw comfortably the sharpest rise in temporary vacancies during June, with Hotel & Catering staff in second place. The weakest growth was signalled for Executive/ Professional staff.

Comments:

 REC Chief Exec Kevin Green says: 

“Uncertainty during the run-up to the referendum saw many employers suspend permanent hiring and instead bring in temporary, contractor or interim staff to hedge against potential changes to their growth prospects.

 “Whilst it is too early to assess what the impact of the vote to leave the EU will be on jobs, our data underlines the need for uncertainty to be minimised so that our economy and our labour market are not adversely affected. The best thing for business right now is clear and calm leadership and as much clarity as possible on what the post-EU future will look like. 

 “We are consulting our members and so far it is clear that for recruiters the best way to ensure the continued health of our labour market, and the economy that relies on it, is by maintaining membership of the single market and access to skills across the EU.

 “Before the referendum, businesses were already finding it increasingly hard to source the right candidates. Ensuring employers can still access the people they need to succeed must now be top of the list in any negotiations.”

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Unemployment falls to lowest rate in more than ten years

Britain’s unemployment rate has fallen to its lowest level in more than ten years, according to official figures that were seized on by campaigners from both sides of the EU debate.

The final set of job numbers before next Thursday’s referendum showed an unexpected fall in the jobless rate from 5.1 per cent to 5 per cent in the three months to April, reaching the lowest level since October 2005. The employment rate remained at its record high of 74.2 per cent.

Economists noted that while the numbers suggested that employers were taking on new workers at robust levels, the data only goes up to April, so it may be too early to tell whether Brexit jitters have affected the labour market.

“We will know the result of the referendum before we see what impact the uncertainty had on the actual job numbers,” said Alan Clarke, an economist at Scotiabank. The pound rallied against the dollar after the figures were released, with sterling bouncing back from two-month lows.

One particular bright spot in April’s figures was wage growth, which has remained stubbornly low since the financial crisis. Regular average wage growth, excluding bonuses, rose from 2.2 per cent to 2.3 per cent, while total wage growth rose 2 per cent. Analysts said the rise was probably due to the national living wage, which came into effect in April. At £7.20 an hour, the minimum wage is one of the highest in Europe.

However, Chris Williamson, chief economist at the financial information services company Markit, said: “Recruitment companies have reported that although the introduction of the national living wage has pushed average wage rates higher, the increase in staff costs has also led to a pullback in hiring at some firms.

“Slower economic growth and rising uncertainty may also have hit hiring in recent months, suggesting the labour market data for May and June may disappoint,” he added.

Analysts said the rate at which companies took on new workers appeared to have started slowing. Employment rose by 55,000 in the three months to April compared with 200,000 in the previous quarter. The number of people who registered as self-employed rose significantly and drove much of the rise in employment.

John Philpott, director of the Jobs Economist think tank, said: “The UK private sector effectively stopped hiring in the spring. Employees account for just 5,000 of the 55,000 increase in total employment in the three months to April, almost all of which is due to a rise in self-employment.”

Ruth Miller, UK economist at Capital Economics, said that while there had been a slowdown in recruitment “some easing in the pace of the jobs recovery from its previous strength was always to be expected”. She said this was partly due to “how remarkable the labour market recovery has been over the past few years” and how little slack was left in the jobs market.

The figures also revealed that the number of non-UK nationals working in Britain had increased by 229,000 to 3.34 million. The proportion of non- nationals among people working in the UK has risen from 3.5 per cent in 1997 to 10.6 per cent.

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Changes to National Minimum Wage – (The Living Wage)

With the aim of paying more experienced workers a higher wage, the Government is introducing a premium for workers aged 25 and over, known as the National Living Wage.  This will be over and above the National Minimum Wage, which will remain in place.  The first premium (coming into force on 1 April 2016) will be set at 50p above the National Minimum wage, so that the National Living Wage will be £7.20.

From 1 April 2016, the financial penalty payable by employers who underpay the National Minimum Wage will be increased from 100% to 200% of the underpayment due to each worker.

As a reminder current National Minimum Wage rates are:

The standard adult rate (workers aged 21 and over) is £6.70.
The development rate (workers aged between 18 and 20) is £5.30.
The young workers rate (workers aged under 18 but above the compulsory school age who are not apprentices) is £3.87.
The rate for apprentices is £3.30.

What does this mean for employers?

Employers who pay close to the National Minimum Wage should check that they know which employees will be entitled to the National Living Wage, and ensure that they are ready to pay any required increase in salary from the 1st April 2016.

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Is it discriminatory to ask an employee to speak English at work?

No, provided that the reason why the request is being made is not due to the employee’s race, which includes colour, nationality, ethnic or national origins.

In the recent case of Kelly v Covance Laboratories Ltd, the Claimant, who is of Russian origin, was asked by her employer to speak in English rather than in Russian in the workplace. The employee asserted this to be discriminatory and brought a claim in the Employment Tribunal (‘ET’) against the research laboratory where she worked.

The ET heard that the employer had significant concerns regarding the employee’s performance and conduct, including excessive periods of time spent in the office bathroom and frequent use of her mobile phone. This led the line manager to wonder whether she was in fact an animal rights activist, a situation which the company had encountered previously and therefore asked her to speak English. The same request was also made of two Ukrainian nationals, following a compliant from the employee that she was being singled out.

The ET accepted that the instruction to speak English had nothing to do with the employee’s nationality. On the contrary, it was a direct result of the concerns raised by her behaviour. It was also accepted that employees who spoke any other languages would have been treated in the same manner had the same circumstances arisen.

This case reinforces the need for an employer to be able to justify and explain its actions, and in the event of a discrimination claim, to properly defend the claim by providing the ET with alternative reasoning for the alleged discriminatory action.

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Barmaids, handyman and various other barred by law – Equality Watchdog!

Companies or recruiters who advertise for a waitress or a handyman and newsagents who put a sign up in their window for a paper boy face prosecution, according to new guidance issued by the equality watchdog.

Anyone advertising for someone of a specific sex, age or nationality — including a Polish builder — could be breaking the law, according to the Equality and Human Rights Commission (EHRC), as could be nightclubs advertising free drinks for women.

The EHRC advice on how to place advertisements to comply with the Equality Act says that advertisers should “avoid job titles that imply a job may be done by men or women only”.

They should not seek to employ a “handyman” or a “barmaid” but should advertise instead for a “maintenance worker” or a “bartender”.

The watchdog warns businesses that using such phrases as “young and dynamic”, “recent graduate” or “mature person” in a job advertisement could risk breaching the age discrimination laws.

Asking for any physical characteristics, including height and strength, could also be illegal because it could discriminate against women and disabled people.

Even posters promoting mother-and-baby classes could breach equality rules unless the advertiser proves there is a valid reason why fathers should be excluded.

“An advert that restricts goods, facilities and services to a particular group is unlawful except in very limited circumstances,” the guidance says.

The watchdog warns against advertising free club membership for “spouses” because of discrimination against gay men and lesbians in a civil partnership “because of their sexual orientation”.

Adverts for “hotels, restaurants, nightclubs, pubs and recreation centres giving preferential treatment to a particular group, for example an advert stating that women have free entry into a nightclub” would also be illegal, it warns.

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