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October 2012 Employment Law Newsletter

15-10-2012

If you would like to discuss any employment issues please contact Julie Taylor on 01635 508181

1. October means (some) changes for the National Minimum wage!

From 1 October the following NMW rates apply:

Don’t forget that the Government introduced a scheme in 2011 to enable the “naming and shaming” of employers who flout NMW law and they can issue penalties. An example was made over the summer of a business in Leicester, so ensure your business complies!

2. Enforceability of an unsigned contract of employment

The High Court has determined that an employee, who had been promoted and provided with a new contract but had not yet signed it, was bound by the terms of the new unsigned contract including the restrictive covenants. The employee’s acceptance of the terms was evidenced by his application for private medical insurance that was only available to him under the terms of the new contract and therefore the new contract was binding from the date of his application. This application for medical insurance was made some 12 months after the new contract was issued to the employee and therefore had the employee resigned prior to making this application, the court may have been able to find that he was not bound by the new terms.

This case highlights the importance of ensuring that employees always sign any new contract or variation to the their terms of employment.

3. Harassment & reasonableness

Claims of harassment and victimisation on grounds of religion arising out of a one off comment shouted across a newsroom have been dismissed by an employment tribunal. The comment contained offensive language relating to the Pope and the employee, a Catholic, found the comment to be offensive and complained he had been intimidated and frightened by it. The ET considered the comment and the context within which it was made, specifically within a busy newsroom with an imminent deadline and found that it was not made “on grounds of” religion. They agreed that looked at in isolation the comment was offensive, but the context was determinative.

This case serves as a useful reminder that offensive comments will be considered in their full context and the effect of the comment or conduct is also very important.

Employers should ensure that their employees receive regular diversity training and have awareness of how their comments could affect their colleagues. A good harassment policy is also important to ensure any issues can be appropriately addressed.

4. Employee owner status

Chancellor George Osborne announced proposals in early October for a new type of employee ownership arrangement under which employees could give up some employment rights in return for shares in their employer’s company worth between £2,000 and £50,000. As the announcements evolved, it seems the proposal is actually seeking to create a new employment status “employee owners”. A consultation paper has now been issued with the deadline for responses in early November.

Derek Rodgers, Gardner Leader’s managing partner has produced a two part blog highlighting some key concerns with the proposals, which can be seen here.

5. PAYE

From April 2013 employers will need to report PAYE in real time under a new system  – Real Time Information (RTI). Most employers will be required to begin reporting PAYE in real time from April 2013, with all being required to do so by October 2013.  Additionally, employers will be required to use payroll software to send details electronically to HMRC and to send details as part of their normal payroll process unless they have nine or less employees. In that case, employers will have the option to use HMRC’s basic PAYE Tools package to send their information instead.

Therefore, employers should start to prepare for this by talking to their payroll software provider or service provider and by checking that all information about their employees is accurate, up to date, and in the right format.

Please note that these comments are intended to summarise some of the employment issues of the moment, not to provide detailed legal advice, so if you need assistance with any employment issues you may have please contact Julie Taylor on: 01635 508181.

Follow Julie on Twitter: @JulieT_GL


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