Clarke and Son News

ACAS (Advisory, Conciliation and Arbitration Service) has issued guidance to help employers get the best from their employees and avoid absence during the World Cup this Summer. (www.acas.org.uk/worldcup)

In anticipation of the World Cup, ACAS urges employers to start talking to employees early to manage their expectations and minimise the impact on workplace productivity.  ACAS enourages employers to be:

• Flexible, where possible, for example, by altering start and finish times and allowing longer lunch breaks so that staff can watch games during the working day;
• Clear about what you expect from your employees in relation to attendance and performance;
• Communicative - start talking early on about managing leave and working hours;
• Honest about how you will manage changes to working practices and where this isn’t possible explain the reasons for this;
• Fair about the way you respond to requests for time off.

Thomas Hunt, Employment Law Specialist adds:

“This does not mean that Employers simply need to bend over backwards to accommodate football fans. It is important to note that not everyone is  interested in football and when contemplating changing working practices in favour of those wishing to take leave during the tournament the impact on other employees must always be considered to avoid any issues of unfair treatment.”

“In addition,  Employers should also be wary of sickness absence and the possibility of false applications for sick leave during the course of the World Cup.”

Should any of the above issues affect your business, please do not hesitate to phone Thomas Hunt on Tel: 01256 320 555 to arrange an appointment.

Here is a summary of how the recent budget could affect you as an individual or business:

Inheritance Tax (IHT)

• The IHT nil rate band (the amount that can be given away on death without incurring Inheritance Tax - subject to lifetime gifts)  of £325,000 has been frozen for the next four years (i.e. 6 April 2010 - 5 April 2015)
• For chargeable events above the nil rate band IHT is charged at 40% on death, 20% on lifetime transfers

For further information on Inhertance Tax, please contact Nia Wharry.

Stamp Duty Land Tax (SDLT)

• The Threshold for first time buyers is to rise to £250,000 (applies where effective date falls on or after 25 March 2010 and before 25 March 2012).
• Introduction of an additional 5% rate of SDLT for residential properties £1 million plus. This rate does not apply until 5 April 2011.

All other SDLT rates and thresholds remain unchanged. For more information on Stamp Duty for residential properties, contact Jenny Axe.

Income Tax

• Introduction of an additional rate of 50% on income in excess of £150,000
• Gradual removal of personal allowances above £100,000 at the rate of £1 of personal allowance for every £2 of income
• Rates for basic (20%) and higher (40%) are to remain the same

 Capital Gain Tax (CGT)

• The annual exempt amount for tax year 2010-11 has been set at £10,000
• Entrepreneurs’ relief - doubled from £1 million to £2 million - i.e. 10% CGT paid on the sale of a business or shares in a personal company on or after 6 April 2010

If you have any queries on Business Rates or how the budget will affect your business, contact Peter Turner.

Other Taxes

• Fuel duty increase - to be phased at 1p in April, 1p in October and the remainder in January 2011
• National Insurance contributions to rise by 1% in April 2011. However, the threshold for NI payments is to rise so that nobody earning less than £20,000 will face extra charges.
• No change to VAT
• Business rates to be cut from October for one year
• Annual investment allowance for small firms - doubled to £100,000
• Duty on cider is to increase by 10% from 29 March and duty on wine, beer and spirits by 2% from 29 March

Savings - ISAs

• The annual amount individuals can contribute is to rise in line with RPI
• If there is a fall in the RPI then the amount will remain as for the previous tax year

Other Points of Interest:

Families:

• Provision of income tax relief for payments to special guardians/carers looking after children placed under a residence order.  The exemption applies to qualifying carers and qualifying payments made on or after April 2010
• Parents of one and two year old children are to recieve an increase of £4 per week in child tax credits from 2012
• Pensioners’ higher winter fuel payments to remain for another year

If you would like to discuss Parental Responsibility issues, please contact Bhupendra Sankhla.

Employment

• The length of time over 65s have to work in order to qualify for tax credits is to be reduced
• Youth employment guarantee scheme is to be extended to March 2012 (guaranteeing anyone under 24 will get a job or training once they have been unemployed for six months).

For employment issues, please contact Thomas Hunt.

Business Support

• State owned banks are to provide £105 billion of loans
• Time to pay scheme - allowing firms to agree extra timetables for settling tax bills to be extended for whole of next parliament
• New growth capital fund worth £500 million to help fast-growing SMEs

For advice on business matters, please contact Peter Turner.

The Economy & Government Finance:

• Predicton that growth for 2010 would be between 1% and 1.5%
• The prediction for 2011 is a growth rate of between 3% and 3.5%
• Government borrowing will be £167 billion this year, £163 billion in 2011, £131 billion in 2011/2012, £110 billion in 2013/14 and £74 billion in 2014/15

For more information on any of these issues, please contact Clarke & Son on Tel: 01256 320 555.

The ’sick note’ is to be replaced by a ‘fit note’ - namely a new statement of Fitness for Work from 6 April 2010.  These require GPs to certify that an employee “may be fit for work”, rather than “fit for work.”

Having received a ‘fit note’, from an employee, it is then subsequently the obligation of the employer to carry out a risk assessment on the employee’s return. The new ‘fit note’ will list the common types of changes employers can introduce to assist a return to work:

• “a phased return to work”
• “amended duties”
• “altered hours”
• “workplace adaptions”

It is believed that this will encourage further discussions between doctor and patient and between employee and employer on the potential options that could facilitate a return to work.

The ‘fit note’ will allow the GP to certify one of two options: “not fit for work” or “may be fit for work taking account the following advice…”.  The wording of the option “may be fit for some work” has been changed to “you may be fit for work taking account of the following advice…” in order to encourage employers to initiate discussions with their employee to consider what changes can be made to assist a return to work.

Where an employee is certified not fit for work, the GP will state the period of incapacity and whether the employee will need to be assessed again at the end of that period. This means that, provided the employee is fit to return to work at the end of that period, he or she will not need to return to their GP before returning to work.

For employees, the introduction of the new ‘fit notes’ should create greater openness between the employee and employer to enable both to work together to create a working environment that takes into account particular health issues thus allowing the employee to return to work.

If you require any further information on Employment Law, contact Thomas Hunt on Tel: 01256 320 555.

The Pensions Act 2008 contains provisions which will make it compulsory (from 2012 for larger employers and 2015 for smaller employers) for an employer to enrol qualifying workers aged between 22 and the state pension age who earn more than a de minimus account (currently set at £5,035 per annum) into a pension scheme and to make contributions to the scheme.

On 9 December, the Chancellor announced that there will be some concessions to the rules for new businesses and ‘micro businesses’ which will mean some employees may not have to be enrolled into a pension scheme until 2016. Details of the implementation plan are expected to be announced imminently.

Under the provisions, the employer will be required to contribute a minimum of three per cent of salary. The employee will be required to contribute a minimum of four per cent salary, up to a maximum amount.

The provisions will be phased over four years, at the end of which (from year five onwards) the combined employer and employee contribution must equal at least eight per cent of salary.

There will be substantial fines for failure to comply with the new regulations.

Clearly, there are likely to be many changes between now and the planned implementation dates, but this is a good time to start thinking through the potential impact of the new regime on your business.

For more information, please contact Paul Cowdery on Tel: 01256 320 555.

Following the Chancellor’s pre-Budget report, it is clear that the UK economy continues to struggle.  This has a knock-on effect on UK employment and can be seen particularly in the continual heightened level of redundancy in the workplace.

Where redundancies are applicable, employers may, in certain circumstances, be prepared to offer a ‘deal’ to the employee to compromise any potential claims in exchange for financial settlement.  However such a deal needs to be embodied in what is known as a Compromise Agreement, which is a specific type of Agreement, created and controlled by statute, designed to end employment relationships.

Essentially the Compromise Agreement will provide for the employee to receive a sum of money as compensation for loss of his or her job and in return the employee will agree not to pursue defined further claims against the employer arising out of the employment or its termination.

The benefit for the employer is that they will often receive more than their strict legal entitlement, such as the statutory redundancy payment. The benefit for the employer is that the Agreement represents finality and it removes the risk of an expensive Employment Tribunal claim from the employer following termination of the employment.

A crucial part of the procedure for a Compromise Agreement is that the employee must take independent legal advice from a Solicitor and the Agreement will contain a certificate from the Advisor that such advice has been given.  This is designed to prevent employees being pressured into signing Agreements which are not in their best interests or which do not provide them with adequate compensation for loss of their job.

Since taking the legal advice is essential for the Agreement to be valid the employer will invariably make a reasonable contribution to the employee’s legal costs.

If you are facing redundancy or if your employer is talking to you about a Compromise Agreement then we can advise you on your position. Contact Thomas Hunt, Employment Specialist on Tel: 01256 320 555 for further information or advice on any aspect of Employment Law.

In the current economic climate redundancies are becoming more and more common. Both employers and employees are having to go through the compulsory redundancy process and although the procedures have relaxed slightly since April they can still cause problems, particularly for employers. In some cases the employer will be prepared to offer a “deal” to the employee so that the employment relationship can end on agreed terms without the stress caused by having to follow lengthy and sometimes overly formal procedures. However such a deal needs to be embodied in what is known as a Compromise Agreement, which is a specific type of Agreement, created and controlled by statute, designed to end employment relationships.

Essentially the Compromise Agreement will provide for the employee to receive a sum of money as compensation for loss of his or her job and in return the employee will agree not to pursue any further claims against the employer arising out of the employment or its termination.

The benefit for the employer is that they will often receive more than their strict legal entitlement, such as the statutory redundancy payment. The benefit for the employer is that the Agreement represents finality and it removes the risk of an expensive Employment Tribunal claim from the employer following termination of the employment.

A crucial part of the procedure for a Compromise Agreement is that the employee must take independent legal advice from his own Solicitor and the Agreement will contain a certificate from the Advisor that such advice has been given. This is designed to prevent employees being pressured into signing Agreements which are not in their best interests or which do not provide them with adequate compensation for the loss of their job.

Since the taking of legal advice is essential for the Agreement to be valid the employer will invariably make a reasonable contribution to the employee’s legal costs.

If you are facing redundancy or if your employer is talking to you about a Compromise Agreement then we can advise you on your position. Contact Nick Bowers, Partner for further information or advice on any aspect of Employment Law.

Over the last decade, there has been a significant increase in employment legislation that has originated from both the EU and the UK.

It’s an established fact that many businesses, and small businesses in particular, find the steady stream of employment legislation extremely challenging.

For employees too, Employment Law can often be viewed as minefield of information beset with potential pitfalls - especially in the area of redundancy which, unfortunately, is an all-too-common occurrence in these changing economic times.

Whether you are a business owner, employee or former employee, there is no substitute for qualified, professional advice to give you all the facts you need under current legislation.

Areas in which our Employment Law specialists can advise our clients include:

• Redundancy, Lay-Offs and Short-Time Working
• Dismissal and Grievance Rules
• Employment Terms & Conditions
• Parental, Paternity or Maternity Leave
• Parental, Paternity or Maternity Pay
• Working Time Regulations
• Flexible Working
• Agency Workers
• Self-Employed
• National Minimum Wage
• Equal Pay and Conditions
• Health & Safety in the Workplace
• Disability Discrimination
• Age Discrimination
• Sex Discrimination
• Race Discrimination
• Employee Holiday Entitlement
• National Minimum Wage
• Employing Migrant Workers.

If you have an issue that needs to be resolved either as a business owner or as a worker, or you’re simply looking for some friendly help and advice, contact us or e-mail Nicholas Bowers direct.

The European Court of Justice has ruled that employees on long-term sick leave are entitled to take all holiday they have accrued when they return to work. Furthermore, if workers were sacked or left a firm, they must receive holiday pay equivalent to the time they were unable to take while ill. This decision goes some way to settle years of dispute over whether holiday rights accrued are lost after prolonged illness.

The ruling specifically impacts UK employers due to UK membership of the EU and the implementation of the Working Time Directive in 1998. Under the European Working Time Directive, workers have a “right to a minimum period of paid annual leave”. However, “a worker does not lose his right to paid annual leave which he has been unable to exercise because of sickness. He must be compensated for his annual leave not taken,” the ruling said.

However, the ruling has been seen as a blow for many employers. In practice, the ruling means that somebody who was away from work for two years could then be entitled to a minimum of 40 days of leave (with the addition of public holidays).

Nicholas Bowers, employment partner at Clarke & Son LLP, made the following comments:

“The decision raises a multitude of issues for employers. For an employee who never returns from long-term sick leave, the employer would be forced to make a lump sum payment on cessation of employment. This invariably creates a sizeable problem in particular for a small employer and is exacerbated further by the financial strain placed on employers in the current economic situation. This is coupled with the practicality of re-integration of the employee back into the workforce after a lengthy period of absence”

Meanwhile the business group, the CBI, described the ruling as

“a real blow to firms trying to keep jobs alive during the recession”. “Businesses themselves also suffer when staff take sick leave, and we had hoped that a compromise could have been achieved over unused holiday time,”

said the CBI’s director of HR policy, Katja Hall.

“Instead, at a time when the economy is struggling, this judgment will ensure that staff are away from the workplace for longer, and it will create a headache for HR departments, who will have to review their policies and contracts.”

If you would like advice on employment issues, please contact Nicholas Bowers or Tel: 01256 320 555

Via Personnel Today comes news of a survey of 1,100 employers conducted by employment law firm, Peninsula, found that nine in 10 respondents would discipline staff if they were legally confident.

But, eight in 10 employers also feared a wave of employment tribunal cases following an increase employee rights.

In January, business secretary John Hutton announced a clampdown on unnecessary employment tribunals by pouring millions of pounds into conciliation service Acas. The move followed news of an increase in employment tribunal cases to 115,039 in 2005-06 to 132,577 last year.

David Price, head of employee relations at Peninsula said many businesses were so convinced that employment law is weighted on the side of employees, they were afraid to tackle disciplinary issues.

He want on to explain that employers are increasingly finding it difficult to apprach the area of discipline, afraid that they will become embroiled in a long, drawn-out process resulting in an employment tribunal. He added:

Employers also need to have a clearly defined disciplinary and grievance policy, in line with the statutory code of practice

If you are a Basingstoke based Business, or in North Hampshire, and have any questions relating to empoyee issues why not visit the employer legal service section of our website or call Nick Bowers on 01256 320555.

Employers could be held liable for the suicides of ex-employees after a landmark ruling by the House of Lords.

Law Lords ruled unanimously that the widow of a man who killed himself six years after a workplace accident should be compensated by his former employers. The decision upheld a previous judgment in 2006 that the company was responsible for the death of a former employee.

In 1996, Thomas Corr was hit on the head by a metal panel as a result of defective machinery. He later suffered from depression, headaches and mood swings. He committed suicide in May 2002.

In the original case, his employer, car manufacturer IBC Vehicles, admitted liability for the workplace accident, but denied that it was responsible for the suicide.

A deputy judge in the High Court awarded his widow £82,520 after finding IBC could not be held responsible for Corr taking his own life. Corr’s widow then appealed that decision and the Court of Appeal found IBC Vehicles was responsible his suicide. IBC subsequently appealed to the House of Lords which confirmed that the company was liable.

Ref. Personnel Today