TERMINATION PAYMENTS – CHANGES TO THE TAX TREATMENT
- Following its consultation in 2015, the Government has now confirmed the changes which will be made in how termination payments will be taxed, and published draft legislation for comment.
- The changes will apply “from April 2018“. It is not clear at this stage whether payments pursuant to settlement agreements entered into before that time will be grandfathered under the existing legislation, but that may well be the case.
Key points are:
- the existing £30,000 income tax exemption for termination payments will continue to apply, as will the unlimited exemption for employee national insurance contributions (“NICs”) (provided, as now, the payment is not “earnings”). However, employers’ NICs will be due on any termination payment in excess of £30,000, making termination payments more costly for employers;
- all PILONs will now be taxed (irrespective of whether they are contractual or non-contractual). In fact, any payment or benefit which the employee would have received during his notice period (had he worked it) will be subject to tax and NICs. Further details of how this provision will operate in practice are set out below;
- the exemption for payments due to injury and disability will be retained, but will be amended so that it will not extend to injury to feelings unless the injury amounts to a “psychiatric injury or other recognised medical condition”;
- foreign service relief will be withdrawn. This may raise some interesting questions, for example, about whether a payment to an employee who has worked outside the UK for several years but for a UK employer, will be caught;
- the other existing exemptions will remain, including payments made to tax exempt or registered pension schemes, and in respect of legal costs.1
1 Information provided by D L Piper UK LLPClick here to view full article >>
In the current economic environment, lay-offs are an unfortunate fact of life.
It is appreciated that employers do not readily resort to this step and some industries are more susceptible than others. Used indiscriminately they can damage employee relations in a workplace which can have an impact on a business for a very long time.
Employers should ensure that they keep their employees informed of what is happening and the likelihood of the lay-off being lifted as this can have serious implications for employers should they have laid off staff for a long period of time and then suddenly work picks up.
If the employer has not kept staff in the loop it is likely that they will start to look elsewhere for employment of decide to ask the employer to make them redundant.
So what are their rights if they decide that they no longer wish to be employed?
If an employee has been laid off for a period of 4 weeks or 6 weeks in a 13 week period, they can write to the employer to claim redundancy.
If the employer has work that the employee can do and:
- the employer responds to the employee within 7 days of receipt of the letter
- they can guarantee that the employee can return to work within 1 month of receipt of the letter
- they can further guarantee work for a period of 13 weeks.
The employer can refuse the redundancy payment.
If the employer does not fulfil the above, the employee is entitled to redundancy.
For more information on how to deal with lay-offs and/or redundancy issues, Contact Us to support you through the process.Click here to view full article >>
Rights for Time off to Attend Ante-Natal Appointments
From 1 October 2014 an expectant father or a pregnant woman’s partner became entitled to unpaid time off to accompany the pregnant woman to 2 ante-natal appointments.
The right applies to all employees with no qualifying period. Agency workers are entitled to the time off once they have reached the 12 week qualifying period under the Agency Workers Regulations 2010.
Employees and qualifying agency workers are eligible to the time off if they are either:
1. the baby’s father or parent; 2. the expectant mother’s spouse, civil partner or partner in an enduring relationship; or 3. intended parents of a child in a surrogacy arrangement where they expect to be entitled and apply for a parental order in respect of that child.
Eligible employees and qualifying agency workers are entitled to accompany the pregnant woman to 2 appointments. The maximum time permitted per appointment is six and half hours which includes time for travelling, waiting and attendance at the appointment.
Employers will not be entitled to ask for evidence of the appointment, such as the appointment card, as this is not the property of the employee but the pregnant woman.
However, the employer can ask for a declaration from the employee stating:
1. they are in a qualifying relationship either with the pregnant woman or the expected child; 2. are taking the time off to accompany the pregnant woman to the ante-natal appointment which has been arranged on the advice of a registered medial practitioner, midwife or nurse; and 3. the date and time of the appointment.
If employers do not permit the time off a complaint can be bought in the Employment Tribunal and if the complaint is upheld an award can be made of twice the hourly rate of pay for each hour that could have been taken off.
Employees and qualifying agency workers are also protected from any detriment arising from the exercise of their right to the time off. Dismissing an employee will be automatically unfair if the principal reason is for exercising their right to time off and the normal qualifying period for unfair dismissal claims will not apply.
The Department of Business Innovation & Skills have produced an employer’s guide to the new right which can be found at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/351413/bis-14-1063-time-off-to-accompany-a-pregnant-woman-to-ante-natal-appointments-employer-guide.pdf
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Working in the social care sector is without doubt one of the most demanding and potentially stressful occupations in existence – but if approached correctly and professionally, it can also be the most rewarding.
At Jay Webb Consultancy Services, we have particular experience of the care sector and its ever-changing rules and functions.
While we don’t doubt that as a manager in the social care sector, you are more than capable of offering your teams some form of training, we would urge you to take advantage of returning to the classroom for a day or so yourself.
Not only will this help to strengthen team cohesion and re-introduce you as a key part of your team, but it will take the pressure off you for a day or two and re-acquaint you with the fundamentals of your profession.
And because of this, we know how essential it is for those working in the care sector to experience a training environment where they can relax, explore the subject in hand, and to feel that they can ask any questions within this closed environment without fear of reprisal or judgement.
As always, our courses are bespoke and can take a variety of forms. As the service user, the choices are all down to you.
For example, if team-building is part of the plan, we don’t have to confine your course to the conventional classroom set-up – we have been known to take advantage of the Great Outdoors on occasion to get those creative juices flowing.Click here to view full article >>
Employment Law Changes for August 2014
This year the Government made a number of changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) legislation.
On the 31 July 2014 the final change to the legislation came into effect.
Employers with less than 10 employees no longer need to inform and consult with appropriate representatives in a TUPE situation if there are no existing appropriate representatives and the employer has not already invited any of the employees affected by a potential TUPE transfer to elect employee representatives.
If the exception applies, employers with less than 10 employees can inform and consult with the employees affected by any proposed changes directly.
For those of you who have small businesses and are thinking of either selling or buying a business I am sure that this change will be very welcome.
For small businesses it often makes sense for the employer to talk to the individuals themselves rather than going through representatives, or indeed asking employees to elect such representatives.
A word or warning – The change only applies to TUPE transfers taking place on or after 31 July 2014.
New SSP Rates from April 2014
Update – New SSP Rates
Effective April 2014
The government has published the new rates of statutory payments for employees who are on sick or family related leave, which will apply from 6 April 2014.
All employers should ensure that those responsible for payroll in their organisation are aware of the new statutory rates and when they take effect so that employees are not inadvertently underpaid.
Following changes made by the Enterprise and Regulatory Reform Act 2013, the date of the annual increase for payments such as the limit on a weeks’ pay for calculating statutory redundancy pay and the limits on guarantee pay has been changed from the 1 February each year to the 6 April this year and for future years. We are still waiting for the government to announce the new rates for these payments.
The new rates are set out in the Welfare Benefits Uprating Order 2014 which the government has now published.
The Order confirms that from the 6 April 2014:
Statutory Sick Pay (SSP) will increase from £86.70 per week to £87.55 per week.
- The standard rate of Statutory Maternity Pay (SMP) will increase from £136.78 to £138.18 per week.
The standard rates of Statutory Adoption and Ordinary and Additional paternity pay will increase from £136.78 to £138.18 per week.Click here to view full article >>
HMRC crackdown on employers not paying minimum wage
HMRC has been cracking down on employers who have not been paying the national minimum wage to it’s employees.
Recently 708 employers, employing 26,519 staff have been forced to pay over £4m in back pay, and were fined up to £5000.
Currently 1,693 employers are being investigated by HMRC for allegedly breaching minimum wage rules during the 2012 – 2013 Tax year.
The current national minimum wage from 1st October 2015 is:
21 and over – £6.70 per hour
18 to 20 – £5.30 per hour
Under 18 – £3.87 per hour
Apprentices* – £3.30 per hour
*This rate is for apprentices under 19 or those in their first year.
If your employee is 19 or over and past their first year of employment, they are entitled to the rate that applies to their age.
Click here to view full article >>
Tougher identity check for CRB applications
Tougher identity checks for CRB applications
With effect from 28th May 2012 people applying for criminal records checks will be put through tougher identity checks.
The Criminal Records Bureau (CRB) is strengthening checks so that it is harder for people with a criminal record to hide convictions by changing their identity to hide their past.
The CRB is reducing the number of documents accepted for identity verification. Applicants will now be required to produce documents that involve undergoing tighter checks with the document issuer, such as a passport or driver’s licence.
The new ID checking process requires applicants to produce three ID documents from the new reduced list. If they cannot, they will be required to undergo further checks.
Plans for these further checks are now being finalised. Details of how they will work will be sent to Registered Bodies shortly.
Steve Long, Chief Executive of the Criminal Records Bureau said: “The changes are designed to enhance the good working practices adopted by many organisations when verifying and validating the identity of those they intend to recruit, appoint or licence”.
“Registered Bodies will have until the 31 August 2012 to phase in the new ID checking guidelines. CRB will provide all the support and advice they need in order to bring this into effect.”
A transitional period for introducing these changes, running parallel with the existing guidance to Registered Bodies began on 28th May 2012 until 31 August 2012, when the existing guidance will cease.
Enhancing the CRB identity checking process –
Frequently Asked Questions (FAQs)
1) Why is the CRB introducing new and revised identity (ID) checking guidelines?
The Home Office commissioned the CRB to look at a number of options to enhance the ID checking process that Registered Bodies currently adhere to when establishing an applicant’s identity. The new guidelines have been developed by the CRB to meet the government’s top priority of protecting the public. Reducing the number of documents acceptable for ID verification will reduce people’s ability to use documents that are easily obtained or forged to assert their identity to obtain a CRB certificate, which could be used to secure a position of trust.
2) How do the changes enhance the ID checking process?
The CRB are tightening up the identity verification procedures used by Registered Bodies for applicants with the intention to reduce any possible abuse of the system and improve public protection. In particular, these changes will make it more difficult for individuals to conceal previous criminal records by changing their name. The focus will be on ensuring that Registered Bodies require applicants to produce documents that they would have acquired through undergoing stringent identity verification with the document issuer, such as the Identity and Passport Service or the Driver and Vehicle Licensing Agency. These changes are part of an on-going improvement process that will enable easier detection of undeclared changes of name in the future.
3) When do the new ID checking guidelines come into force?
The new process will be implemented from the 28 May 2012, with a phasing-in period of three months. This is to allow organisations time to bring existing processes in to line with the new requirements. From 31 August 2012, all ID checks should be carried out in line with the new guidance.
4) Can I still use the existing ID checking guidelines after 28 May?
From 28 May 2012, we would expect organisations to start using the new process. However, you will be able to continue to use the existing ID checking guidelines until 31 August 2012. This is to allow time for organisations to train all staff involved in the new ID checking process and make any procedural changes necessary. We would advise Registered Bodies to switch to the new process as soon as they are ready to do so during this period to ensure full compliance by 31 August 2012.
5) What documents can now be used in the ID checking process?
Please see the attached revised ID checking guidance for the complete list of acceptable documents. These are also available from the Home Office website at www.homeoffice.gov.uk/crb
6) Have any documents been removed from the current accepted list?
Yes, 21 documents have been removed and are no longer acceptable under the new arrangements. These are:
- NHS Card (UK)
- National Insurance Card (UK)
- Exam Certificates e.g. GCSE, NVQ, O Levels, Degree
- TV Licence
- Insurance Certificate
- Disclosure Scotland Certificate
- CRB Certificate
- Vehicle Registration Document
- Addressed Payslip
- General Medical Council (GMC) Certificate
- Connexions Card
- Mail Order Catalogue Statement/Card Statement
- Store Card Statement
- Court Claim Form (UK)
- Documentation issued by Court Services
- Mobile Phone Bill
- Convention Travel Document (CTD) Blue
- Certificate of Identity (CID) Brown
- Stateless Person’s Document (SPD) Red
- Application Registration Card (ARC)
- Certificate of British Nationality (UK)
This review of acceptable documents is on-going and we will provide you with further updates as and when any other documents are removed.
7) Why have you removed these documents?
In line with government policy, the CRB regularly reviews the robustness of these documents used to validate identity. Following careful consideration, it has been agreed that the new accepted document set will provide employers with the most reliable information. By limiting the document list and removing these 21 documents, the CRB has strengthened the identity checking process.
8) Are there any exceptions?
Yes, for 16/17 year old applicants in full-time education. In the first instance, they are expected to follow Routes One, Two or Three. However, if this is not possible due to a lack of a Group 1 document or employment /financial history, they can use a letter confirming their identity from their Head Teacher or College Principal as a Group 2b document, verifying their name and any other relevant information required e.g. address or date of birth.
9) What do I do if an applicant cannot provide the required documents?
If you or your ID checker cannot establish an applicant’s identity in accordance with the revised CRB ID guidelines, then you should mark W59 on the application form with a NO. Applicants who are unable to provide the required documents will then be asked to give their consent to have their fingerprints taken in line with the current procedure. Registered Bodies should be aware that this will require attendance by the applicant at a Police Station at an appointed time, and may add delay into the overall application process.
10) How many applicants could be affected by the change?
Over 90% of applicants should hold a Passport, UK Biometric Resident Permit, GB or NI Driving Licence or UK Birth Certificate. We anticipate that the majority of the remainder will be able to use Route Two or Three as outlined in the revised guidance document. Applicants should only be considered under Route Three, after they have been considered under Routes One and Two and their identity cannot be established. For the small number of applicants who are unable to provide sufficient ID documents in Route Three, they will be required to consent for their fingerprints to be used as per the current process.
11) Who pays for fingerprinting?
As with the current procedure, there are no costs associated
12) Will the CRB be communicating this change to applicants?
All communications relating to these changes will be available from the Home Office website at www.homeoffice.gov.uk/crb
13) How does this change affect the CRB Code of Practice?
This change provides enhancements to the ID checking process, which in turn supports the CRB Code of Practice requirement that ‘Registered Bodies must accurately and comprehensively verify the identity of the applicant prior to the submission of a CRB application’.
The statutory conditions attached to registration that all Registered Bodies must adhere to, is that prior to submitting an application the Registered Body shall verify the identity of the applicant in accordance with the identity checking guidelines issued by the CRB.
Registered Bodies must also ensure that ID checkers are trained on the changes and that procedures are updated accordingly.
14) Where can I go for more information to support me when I am checking an applicant’s documents?
Detailed information is currently available via the Home Office website at www.homeoffice.gov.uk/crb-id. This website will continue to be updated with any changes to current guidelines. We will also be providing a variety of scenario-based examples on the website which may be used as a desk aid for anybody involved in the ID checking process.
15) Do you anticipate that this new process will cause delays to the CRB checking process?
For the majority of cases, we do not envisage you encountering delays in carrying out ID checks as a result of these changes. Furthermore, we have established a three month phasing-in period to allow both Registered Bodies and applicants to ensure that identity checking processes are not adversely affected during this transition.
16) When will I hear more about this change?
We advise that you regularly check the website at www.homeoffice.gov.uk/crb for any updates.
17) Will there be any change to the fee currently charged for a CRB check?
No. There is no planned fee increase.
18) I am currently an e-bulk user. How will this change affect me?
The XML schema used to transfer e-applications from the RB to the CRB will not change. You will still need to populate the mandatory ‘applicant identity details’ to confirm that identity has been verified and who the evidence was checked by. You will also need to continue to populate the passport and driving licence fields if the applicant presents them during the ID checking process. If you have built an applicant-facing, front-end web application, which includes specific details of types of identity documents, you may need to make appropriate amendments to this.
19) How can I use the external ID validation service?
The CRB is currently finalising the details of this, as outlined at Route Two in the revised guidance. As soon as we have further information, we will be communicating this in the form of a mail-shot, as well as via CRB News and the website.
20) Can I use any of the routes to verify the identity of the applicant?
No. All Registered Bodies must have exhausted Route One before considering other options. Currently Route Two is unavailable until the details of the external ID validation service are confirmed so if the applicant cannot be processed by Route One you should go to either Route three or use the existing guidelines.
For non-UK residents you should use the existing guidelines for the time being.
21) What should I do for Route Two of the new identity checking guidelines?
You are currently unable to use Route Two from the new guidelines as we are currently in the process of finalising details of the external ID validation service.
If the applicant cannot be processed by Route One, then you should go to Route Three, or consider checking identity using the existing guidelines.
22) Why has the guidance changed for progressing from Route Two to Route Three?
There may be genuine circumstances to consider why the applicant’s identity has not been validated via Routes One and Two. To understand this further you should hold a probing discussion with the applicant about the likely reasons why their identity has not been validated before considering using Route Three. You should keep a record of this discussion.
23) Why do we need to keep a record of any discussion with the applicant?
The CRB will not routinely be monitoring adherence to these guidelines. However, the Registered Body (RB) is solely responsible for the ID checking of the applicant and should take appropriate measures to record key discussions within their recruitment process.
24) Why have further amendments to the guidance been made?
The CRB has reviewed the guidance in consultation with the Home Office and other government departments. As a result of this consultation, the list of valid documents in groups 2a and 2b has been revised.
25) What documents can I use to check addresses for non-UK residents?
The documents listed in groups 2a and 2b now allow for overseas addresses to be verified.Click here to view full article >>
Employment Law Changes in 2012
2012 will bring some significant employment law changes for both employer and employee alike.
Key updates are as follows:
1. Statutory redundancy payments and guarantee payments increase
- The maximum amount of a week’s pay used to calculate a statutory redundancy payment and the basic and additional awards for unfair dismissal increases from £400 to £430 on 1 February 2012.
- The maximum unfair dismissal compensatory award increases from £68,400 to £72,300.
- The limit on the amount of a guarantee payment payable to an employee in respect of any day also increases from £22.20 to £23.50.
2. Maternity, paternity, adoption and sick pay increase
- The standard rate of statutory maternity, paternity and adoption pay will increase from £128.73 to £135.45 per week from 1 April 2012.
- Statutory sick pay will increase from £81.60 to £85.85 per week from 6 April 2012.
3. Qualifying period for unfair dismissal protection is increased
- The qualifying period for an employee to bring an unfair dismissal claim will increase from one year to two years. This change comes into force on 6 April 2012.
- The Government has stated that the change in legislation it to “provide more time for employers and employees to resolve difficulties, give employers greater confidence in taking on people and ease the burden on the employment tribunal process”.
4. Pensions auto-enrolment begins
- With effect from 1 October 2012, employers with 50 or more employees have to enrol eligible employees automatically, and make mandatory employer contributions, into a qualifying workplace pension scheme or the National Employment Savings Trust (Nest).
5. Changes to Employment Tribunal procedure
- The Government has announced that there will be a “fundamental review” of the Employment Tribunal Rules of Procedure, with substantial changes to employment tribunal procedure expected to be introduced on 6 April 2012.
- Employment judges will hear unfair dismissal cases alone in the tribunal, unless they direct otherwise.
- The maximum amount of a deposit order, which a tribunal can order a party to pay as a condition to continuing with tribunal proceedings, will increase from £500 to £1,000.
- The maximum amount of a costs order, which a tribunal may award in favour of a legally represented party, will increase from £10,000 to £20,000.
- Witness statements are to be taken “as read” unless a tribunal directs otherwise.
Default Retirement Age and Capability
As the statutory default retirement age has been scrapped along with the retirement procedure, organisations who wish to retire an employee will need to follow a fair procedure under ordinary unfair dismissal rules and rely on one of the potentially fair reasons for dismissal.
There will be exceptions to the removal of a default retirement age, however employers will need to objectively justify these exceptions, and if necessary defend them at Tribunal given that it is expected that there will be a rise in the number of employment tribunals for age related discrimination once the changes come into place.
However, it is not all bad new because statistically, older employees are more reliable in terms of attendance than their younger counterparts (hence the reason why some employers actively recruit older workers).
So, what should employers do if they have an employee who has not been performing, who they had hoped would retire to save them the bother of dealing with the issue?
If an employee is not performing (not matter what their age) employers should follow a proper capability process and have policies in place to ensure that they deal effectively with non-performance.
Before undertaking any performance meeting ensure that you have the facts to hand and that you have thought out what issues need to be addresses.
Arrange to meet with the employee and explain the reason for the meeting is to deal with their performance at work.
At the meeting outline the problems and where the employee’s performance is not meeting the required standards and give them an opportunity of responding.
Set a clear plan of what improvements you need, including targets and timescales. These need to be realistic. Use the SMART process so that your targets are: SPECIFIC, MEASUREABLE, ACHIEVEABLE, REALISTIC, TIMELY.
Arrange any training or support needed and set the date for a review meeting.
At Jay Webb Consultancy Services we can provide you with a bespoke capability policy, procedure and guidelines for managers on how to deal with capability issues.
Contact us to obtain further details of our packages via the Contact Us pageClick here to view full article >>
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