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HRSP March 2016 Newsletter
 



Budget 2016
As is always the case with the budget, it will be some days or weeks before the detail has been analysed and understood, but in the meantime the key new changes affecting organisations and employers are that:

Business rates
  • The current review of business rates will not adversely affect the current rate relief which charities receive
  • Business rate relief for small businesses, including social enterprises, should reduce because the standard business rates multiplier is rising from £18,000 to £51,000. This means that if an organisation has a rateable value between £18,000 and £51,000, they’ll now be paying the lower small business multiplier. Voluntary organisations with smaller premises should see a small reduction in the 20% of their business rates bills that they’re liable for.
  • The small business rates relief is also being doubled, meaning that if you are a social enterprise with a rateable value of anywhere up to £12,000 you’ll get 100% business rates relief, tapering to 0% as you approach a rateable value of £15,000.
Pensions
  • The Chancellor has said that he wants to see employers contributing more to public sector pensions. This is likely to affect clients who have taken on public sector staff (who have retained membership of the LGPS) under a TUPE transfer.
  • In terms of other pensions, we regularly have situations where employees want employers to contribute to a pension scheme of their choice, as an alternative to the compulsory ‘auto enrolment.’ The introduction of the new Lifetime ISA may well add to this pressure.
Redundancy payments and settlement agreements
  • Many of our clients have made redundancies or have entered Settlement Agreements in recent years. Being smaller companies it is unusual to see payments beyond £30,000 However where payments do exceed £30,000 the rules are tightening in terms of what can be considered free of tax and NI. Perhaps more significantly is the simple fact that Settlement Agreements are on the Chancellor’s radar, so we may well see further changes.
Salary sacrifice agreements

The ‘Red Book’ containing the detail behind the budget, states that the Government is concerned about the growth of salary sacrifice schemes, and is considering limiting the range of benefits that attract income tax and national insurance advantages when they are provided as part of salary sacrifice schemes. More is expected on this at a later date. (And if anyone out there would like to read the Red Book in full please click here http://bit.ly/1R2QgNv

Childcare vouchers
Regular readers of our newsletters will know that we have reported on the changing fate of childcare vouchers. The budget confirmed that childcare vouchers will be closed to new entrants from April 2018. And talking about childcare vouchers….

 

 

Childcare Vouchers
The Employment Appeal Tribunal recently confirmed, in the case of  Gabriel v PBS Ltd UKEAT/0190/11/MAA,  that it was lawful for the employer to write into their scheme that women on maternity leave would not be eligible to receive childcare vouchers whilst they were on maternity leave. This overturned HMRC guidance on this subject. We will be writing to all our clients who use the HR Services Partnership Childcare Voucher Scheme, to explain this in more detail and the options now available to them.
 
 

UPCOMING EVENTS:
Lunch and learns are back!
 


Join us for a Lunch & Learn exploring the area of Managing Long Term Sickness Absence. We will consider the challenges which can arise and in particular what employers are expected to do when considering reasonable adjustments for employees with disabilities.

Horsham Thursday 28th April
London Wednesday 11th May

To book your place E: Tracy@hrservicespartnership.co.uk or T: 01403 240205

Watch this space for further Lunch and Learns during 2016 and do get in touch if you have any particular topics you would like us to add to our programme.


NCVO Conference 18th April 2016
We will again be exhibiting at this year’s annual conference and running a FREE HR clinic. Click here for more information https://www.ncvo.org.uk/training-and-events/ncvo-annual-conference


NCVO / BWB HR Conference 2016
We are delighted that one of our Directors, Maria Aguilar, will be speaking at this event, on the topic of Managing Successful Investigations and Hearings. To learn more about this event or book please click here  https://www.ncvo.org.uk/training-and-events/events-listing/2-content/1217-ncvo-bwb-hr-conference-2016
 

Remember to follow us on Twitter @HR_Services1 for regular tips and news!

 


National Living Wage - Answers to some tricky questions
The new compulsory minimum wage of £7.20ph will become effective on 1 April 2016 for workers aged 25 and over.

Q. The 1st April falls on a Friday which is in the middle of a pay period for our weekly paid staff. When do we have to start it?

A. The National Living Wage (NLW) must be paid to workers for the pay reference period beginning on or after 1 April 2016. This means that if your next pay reference period starts on 4th April, that’s when the NLW begins.

Q.  We have a couple of staff who will be turning 25 later this year. Are they entitled to the NLW from their birthday?

A. Not if their birthday falls mid pay reference period. It would apply from the start of the next pay reference period following their birthday.

Q. Does the current National Minimum Wage still exist for staff aged under 25?

A. Yes, as do the pay rates for apprentices. For current rates see

https://www.gov.uk/national-minimum-wage-rates

Q.  Will the increases for the National Minimum Wage and National Living Wage happen at the same time?

A. Not necessarily. However, the Government are carrying out a review of the minimum wage cycle and most commentators expect that eventually the two will be aligned, and possibly re-named!

Q. What if I employ an apprentice aged 25 or over?

A. If an apprentice is aged 25 or over and is not in the first 12 months of the apprenticeship, they will be entitled to the NLW.

Q. When calculating the NLW can I count the part of the salary which has been ‘sacrificed’ for childcare vouchers? Or overtime?

A. No. Neither can be taken into account when calculating the NLW. Neither can you take loans into account, which includes Season Ticket Loans.
 

National Insurance Contributions (NICs) to increase in April 2016
A new single tier flat rate State Pension is being introduced for people who reach State Pension age on or after 6 April 2016. It will replace the existing basic and additional State Pension.

Part of the changes being introduced is that the ability to ‘Contract out’ of the second state pension will be abolished from 6 April 2016. This means that if you have a pension scheme which is ‘contracted out’ the employee’s NICs will increase. This includes the Local Government Pension Scheme.

An individual can check if they are contracted out by looking at the National Insurance line on a recent payslip. Individuals are contracted out if it has the letter D, E, L, N or O next to it. You’re not contracted out if it has the letter A.

Employers with a contracted out pension scheme have a duty to inform staff about the change to their NICs from April 2016.
 
You can learn more about the changes at https://www.gov.uk/additional-state-pension/contracting-out


No Employer NICs for Apprentices aged under 25
From April 2016 employers will not have to pay Class 1 NICs in respect of “young apprentices” (apprentices under the age of 25). This was announced in the Chancellor’s 2014 Autumn Statement in a bid to make it cheaper to employ young people.  The exemption will apply to Class 1 NICs on earnings up to the upper earnings limit.
 

Scammers
Scammers are becoming increasingly sophisticated with their methods.  Even with top-notch security systems, human error or lack of information security awareness can leave you vulnerable to attack. Scammers make a series of telephone calls over a number of weeks to build up a picture of an organisation with apparently innocent requests for information.  The scammers will then send an email, usually requesting a money transfer, which looks as though it is from a colleague. 
 
A note on the telephone and by the computer – just to remind people not to give information out over the telephone can be helpful.   Our IT partner has a handy tool to identify information security awareness weaknesses -  http://bit.ly/22oOWvt

You may also be interested in introducing some Cyber Security Training for some or all of your staff. These can often be offered as a series of online modules for topics such as Email Security, Password Security, Mobile Security etc. There are a variety of products on the market, but best to ask your IT provider to advise you which product suits your needs.

 
 
 

Number of Employment Tribunal claims continues to decline
Last year the tribunals reported receiving a total of just over 61,000 claims. This compares with the 105,000 received the previous year and continues the downward trend. It is difficult to be certain as to the reasons why this is the case. However, commentators suggest that the introduction of tribunal fees; the introduction of the ACAS Early Conciliation Scheme and the introduction of Settlement Agreements have all played a part.

Note that the Supreme Court has recently granted permission to Unison to appeal the Court of Appeal’s decision rejecting Unison’s judicial review of the employment tribunal fee regime so the debate is not over.
 
 
The Gender Pay Gap reporting
From 26th March 2016, organisations with 250 or more employees will have to publish information about the difference in pay between men and women – including any gap in bonus payments.  Commentators believe that there will come a time when this requirement will apply to smaller organisations too so watch this space…

Increase in rates
The Government has increased redundancy and maximum compensation payments for unfair dismissal occurring on or after 6 April 2016.

The main changes (and they're not going to break the bank) are:-
  • When calculating redundancy payments the cap on a week's pay becomes £479 (currently £475)
     
  • Maximum compensatory award for cases of unfair dismissal becomes £78,962 (currently £78,335)
 


 
Data Protection Subject Access Requests
You may be aware that under Part II of the Data Protection Act 1998, employees (and ex-employees) have the right to ask from their employer details of any personal data held on computer, in personnel files or other and to be told why the data is held.

What falls under Personal Data?
This will include data relating to the individual who can be identified from that data, whether it is held in computer records or manual files. In most cases, this will include email correspondence to and from the individual and about the individual.

The employer’s duty to respond
Upon receipt of a Subject Access Request, you will have a maximum of 40 days to provide the data.

You should in the first instance acknowledge receipt of the request, request payment of the £10 fee (if you so wish) and if appropriate ask for evidence of identity especially if the request was received by email or post.

You should then provide the appropriate manager dealing with the request with guidance on the scope of data to be searched. You should also inform managers not to delete any data that would fall within scope of the SAR.

A number of exemptions apply and it is strongly recommended you obtain specific guidance before proceeding. The Information Commissioner’s Office’s Code of Practice provides details

https://ico.org.uk/media/for-organisations/documents/1065/subject-access-code-of-practice.pdf

Implications for the employer
Responding to a SAR is a significant undertaking and unfortunately, it appears that the trend for such requests is on the rise with solicitors confirming to us that they are making more and more use of this right when advising an aggrieved employee.

So consider your policies for data retention ensuring that you meet the 8 Data Protection principles. And ensure that your managers are aware that any correspondence relating to individuals should be written on the basis that it could potentially be disclosable as part of an SAR and/or Courts proceedings… 
 
Recent cases of note
 
Ghartey v Royal Museums Greenwich ET/2301169/2014
Background
Mr Ghartey was employed as a Visitor Assistant at the Royal Museums Greenwich. Timekeeping was not one of his strengths, and the museum raised this with him both formally and informally, in 2005 and 2006 respectively.
In 2010, the museum issued guidelines to all assistants setting out its expectations regarding attendance and timekeeping. The museum advised that absence levels should be kept to a minimum and it set out the absence notification arrangements that employees must follow. The museum made it clear that staff must be ready for duty and in position to attend the daily briefing at 9.30am. Briefings are an important part of the effective running of the museum.

On 20 January 2013, the museum wrote to Mr Ghartey and advised him that his timekeeping would be monitored and that disciplinary proceedings would ensue if there was no improvement. In February 2013, Mr Ghartey received a written warning for unauthorised absence that would remain live for three years.

In June 2013, the museum had conversations with Mr Ghartey about his sickness absence record and following a further period of absence, he was issued with a final written warning in February 2014.

In early 2014, the museum began a drive to combat late attendance across the organisation. All employees with 10 or more late attendances in the previous year were invited to a disciplinary meeting and received a warning on their file. Mr Ghartey was dismissed for misconduct on 13 March, because unlike the other disciplined employees, he was in receipt of a final written warning.
 


British Gas Trading Ltd v Lock and another EAT/0189/15 - update
Background
This is a case we first reported on in June 2014. It concerns a sales person for British Gas who always received commission on top of his basic pay, albeit the commission varied each month. He argued that his pay during holidays should not simply be based on his basic pay but should include an element of commission, and the European Court of Justice agreed. The case came back first to the Employment Tribunal and then to the Employment Appeal Tribunal.

Both agreed with the employee. So what does this mean with regards to the inclusion of overtime in the calculation of holiday pay?

In short, holiday pay must be calculated on the basis of the employee's normal pay. Where an employee normally works overtime, this should be included in the calculation of his or her holiday pay.

Overtime that the employer is contractually obliged to offer and that employees are required to work must always be included in holiday pay.



 








Employment Tribunal
Mr Ghartey brought a claim of unfair dismissal in the employment tribunal on the basis that:
  • he had a difficult bus journey to work;
  • the two previous warnings were not fair;
  • the final written warning was flawed because it did not mention that further misconduct was likely to result in dismissal; and
  • the timing of the attendance drive was dubious and the warnings should not have been taken into account.
The tribunal acknowledged that Mr Ghartey had a problematic journey to work involving several buses, but "it is an employee's responsibility to take whatever reasonable steps are needed to get to work on time".
The tribunal accepted that the necessary words to explain the consequences of further misconduct had been omitted from the final written warning. However, the warning was valid because Mr Ghartey had been in receipt of the disciplinary policy and the consequences of future misconduct had been made clear to him at the disciplinary meeting.

In the tribunal's view, the museum had been entitled to take the warnings into account, because they had been issued in good faith and the museum was conducting a drive in relation to lateness affecting all employees. The timing of the drive was unlucky for Mr Ghartey, but his dismissal was a result of his own actions.

The tribunal found the dismissal was reasonable in all the circumstances because Mr Ghartey had been persistently late, he had known the importance of arriving at work on time and that any failure to do so could result in disciplinary action, and the museum had conducted a fair procedure. The tribunal held the dismissal was fair.

 
 









There is no definition setting out how regularly overtime must be worked for it to be included, but the general principle is that pay that is "normally received" should be included in the calculation. If an employee has worked a settled pattern of overtime over a period of time, payment for that overtime is pay that he or she normally receives and must therefore be included in holiday pay.

Where there is no settled pattern of overtime, the employer should calculate average pay over a reference period leading up to the period of annual leave, although the courts have not addressed what a suitable reference period would be.

Finally… It seems likely that British Gas will appeal to the Court of Appeal, so although there isn’t a definitive outcome to this case – if you pay regular commission or bonuses as an integral part of the employee’s remuneration then you may well want to include these in holiday pay calculations or risk having to pay back pay.



 

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