The Insider Issue Three NC

THE 2016 BUDGET: WHAT YOU NEED TO KNOW.

The 2016 budget last month revealed a few surprises for Britain. The Chancellor announced that this budget will see the Government ‘act now so we don’t pay later’. But what does this mean to you as an employer?

Job creation is always welcome news here in the UK, as well as lowering the unemployment rate, it is also good for our economy and business growth. From an HR perspective, there will perhaps be an increased emphasis upon the recruitment processes of businesses. As it stands, there is no legally-required recruitment process within the UK. As an employer, you are not obliged to request and post applications, conduct interviews, score your candidates or provide feedback – you could simply cherry-pick your employees if that is what you wanted to do. The only thing you must be mindful of within your recruitment process is the possibility of discriminating on the grounds of race, gender or disability to name but a few. Regardless of the proposed creation of the one million jobs, at ELAS, we advise our clients to always follow a robust process when recruiting new employees. Recruitment processes such as application forms, interviews and scoring help and protect employers when justifying their decision to hire or to not hire a person. This is especially crucial if you happen to be faced with someone alleging that they were not offered a job because of a protected characteristic they possess. At ELAS, we understand how essential it is to ensure you have made the correct recruitment choice. It is a respected fact that the greatest asset of your business is your staff. Good employees are the foundation of your business. Our team of professional HR experts are on hand 24 hours a day 7 days a week to advise you on any recruitment issues you may have. For complete peace of mind, call us today on 0161 785 2000 for more information.

The main announcements that are to affect you from an employment law and a HR perspective are:

• The introduction of compulsory national insurance contributions (NICs) on settlement agreements over £30,000.

• The creation of one million jobs over the next parliament.

Let’s start with settlement agreements. Settlement agreements are a useful and legally binding way of achieving a mutual parting of ways with an employee without having the fear that they could possibly bring a claim against you in the employment tribunal.

Settlement agreements are lengthy and complicated documents that need to be completed correctly.

The Chancellor’s amendments see settlement agreements exempt from employer NICs, with the first £30,000 being income tax free. These changes are due to come into force from April 2018. This may be unwelcome news to employers as it will be an additional cost, potentially making these redundancies much more expensive in the future. However, you can breathe a sigh of relief, as the vast majority of settlement agreements are under the £30,000 threshold.

Secondly, The Chancellor has told us to expect the creation of a further one million jobs over the next four years of parliament.

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