July Employment Update
CONSULTATION: Tax treatment of termination payments
The government has announced a consultation to review the tax and National Insurance contributions on termination payments with the intention to make this easier and fairer. The consultation is seeking views on various matters, including:
You can find out more here
ACAS has issued a new guide for small employers covering the basics of employment law regarding pay and wages. It includes summaries of different types of pay systems, wage slips, dealing with absences, overpayments and managing deductions. You can see the guidance here
HMRC are looking at new ways to improve the efficiency of the IR35 legislation and reduce the tax advantage for individuals hired through a personal service company (PSC) rather than as direct hire employees. Current suggestions of reform are administrative changes and increasing the involvement of engagers to ensuring the correct amount of tax is paid. Any comments or suggestions can be submitted by the end of September here
From 1 June 2015 we have now reached the staging dates for automatic pension enrolment for employers with fewer than 50 employees. The overall staging period for this group runs until 1 April 2017. If you have not already, make sure you are aware of your staging date and have a plan in place for implementation. You can check your date on the on the Pensions Regulator’s website
EMPLOYMENT TRIBUNAL FEES
The Justice Committee have been focusing on the effect of court and tribunal fees. They are currently focusing mainly on the charges made over the last Parliament. The inquiry will deliberate the increase in court fees which has been introduced by the Civil Proceedings and Family Proceedings Fees (Amendment) Order 2015, which came into force 9 March 2015 and the introduction of tribunal fees since 2013. The Committee is interested in the following two aspects;
This is a separate inquiry to the previously announced Ministry of Justices internal review of employment tribunal fees specifically. You can find out more here
Sickness absence & holiday
The Employment Appeal Tribunal has determined that the Working Time Directive does not require employees absent from work on sick leave to show that they are physically unable to take their annual leave in order to carry over the accrued unused statutory holiday to a subsequent holiday year. It is enough that they are absent on sick leave and do not choose to take annual leave during that period of absence.
The EAT did decide that the right to carry over leave is not unlimited and that the leave should be taken within a period of 18 months from the end of the leave year in which it was accrued. However, the parties have been given leave to appeal to the Court of Appeal.
This case is a reminder of the importance of keeping track of holiday accrued during sickness absence and to ensure that your sickness absence policies are up to date.
FREE CHILDCARE PROVISION
The Childcare Bill 2015-16 proposes that free childcare for 30 hours for 38 weeks of each year should be available for qualifying children of working parents in England who are under compulsory school age. This would double the amount of free childcare that is currently available.
It is expected that the new increased free childcare allowance will start to be available from September 2016. Further regulations under this provision may specify additional details, such as the particular rates payable to the childcare providers.