The Chartered Institute of Payroll Professionals Policy bi-monthly newsletter
September 2016
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The Chartered Institute of Payroll Professionals
Policy Bi-Monthly Newsletter – September 2016
Welcome
Welcome to the autumn 2016 edition of the bi-monthly newsletter from the CIPP’s Policy & Research Team. As ever, there is no shortage of news that affects the payroll profession and we include many other areas of news that knowledge of can be useful in our business. Regular readers will know that our newsletter is never a short read but we continue to index all items to ease your navigation to areas of particular interest. After a lull in government publications over the summer recess, a steady stream of consultations has been on the Policy team’s agenda; to name but a few - the ‘six part’ Making Tax Digital, gender pay gap reporting (public sector), alignment of dates for making-good on BiKs, salary sacrifice for the provision of BiKs. And of course with consultations comes our surveys. If you are reading this pre 16 October and you have an interest in sharing your views on the consultation on salary sacrifice for the provision of BiKs, our survey is still open .
If you want to update yourself or your teams then have a listen to the latest webcasts. The most recent ones provide an overview of mandatory gender pay gap reporting where private, voluntary and public sector employers with 250 plus employees will be required to report information annually based on data from April 2017. And also an overview of the Apprenticeship Levy , what it is, how it is calculated, paid and reported and some of the implications employers need to consider ahead of the April 2017 implementation.
Visit My CIPP on our new website for details of other webcasts.
On a final note, National Work-Life Week 2016 takes place from Monday 3 October to Friday 7 October. The week is an opportunity for both employers and employees to focus on well-being at work and work-life balance. Employers can use the week to provide a range of relevant activities for staff, and to promote their flexible working policies and practices. Working Families has a Toolkit for Employers which will tell you everything you need to know about National Work Life Week and how it can benefit your organisation. ‘ 'Go home on time day' ’ takes place on Wednesday 5 October and according to Working Families research , many parents are working far longer than their contracted hours every week. Make sure you go home on time and do something you enjoy and if you are reading this after the 5 th then why not mark another regular date in your calendar to go home on time .
Diana Bruce, MCIPPDip CIPP Senior Policy Liaison Officer
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The Chartered Institute of Payroll Professionals
Policy Bi-Monthly Newsletter – September 2016
Contents Apprenticeships .................................................................................................. 6 CIPP webcast on the Apprenticeship Levy...........................................................................................................6 Consultation on the Scottish Government Response to the UK Apprenticeship Levy..........................................7 Apprenticeship funding consultation closes 5 September ....................................................................................7 Register of apprenticeship training providers - survey..........................................................................................8 Apprenticeship Levy guidance for software developers .......................................................................................9 Draft regulations for the calculation, payment and recovery of the Apprenticeship Levy......................................9 Employment News............................................................................................. 10 Employment Tribunals .........................................................................................................................................10 Daily penalties: HMRC victory in Court of Appeal ..............................................................................................10 Islamic headscarf ban is direct discrimination ....................................................................................................11 Indirect Sex Discrimination.................................................................................................................................12 Territorial Jurisdiction .........................................................................................................................................12 What Uber's employment tribunal could mean for employers ............................................................................13 Reasonable adjustments may extend to protection of pay .................................................................................14 General Employment News..................................................................................................................................15 Legislative priorities announced by Welsh Government.....................................................................................15 Statutory code of practice on English language requirement .............................................................................15 UK workers experienced sharpest wage fall of any leading economy................................................................16 New universal credit web tool.............................................................................................................................16 What does Brexit mean for UK employment law? ..............................................................................................17 Universal Credit and employers .........................................................................................................................18 Employers struggling to effectively manage an ageing workforce? ....................................................................19 Pay and work rights complaints..........................................................................................................................19 Mandatory Gender Pay Gap Reporting for public sector employers ..................................................................20 Jobseekers over £1,000 worse off in real-terms.................................................................................................20 Rise in maternity discrimination prompts Committee action ...............................................................................21 UK employees waste 20% of their time worrying about their finances ...............................................................22 Understanding your payslip................................................................................................................................22 Thinking about introducing a work from home policy?........................................................................................23 Research shows increase in zero-hours contracts.............................................................................................23 National Work Life Week 2016...........................................................................................................................24 Managing People – new guide from Acas ..........................................................................................................24 CIPP webcast on Gender Pay Gap reporting.....................................................................................................25 Expenses, Benefits & Reward.......................................................................... 26 Childcare providers are critical to the successful roll out of Tax-Free Childcare – spread the word...................26 Does your benefits package meet your employees’ needs? ..............................................................................27 Payrolling non-cash vouchers and credit tokens ................................................................................................27 Consultation on salary sacrifice for the provision of benefits in kind ..................................................................28 Consultation on alignment of dates for making-good on benefits-in-kind ...........................................................28 Worldwide subsistence rates..............................................................................................................................28 Consultation on simplifying the PAYE Settlement Agreement (PSA) process....................................................29 Advisory Fuel Rates for Company Cars from 1 September 2016.......................................................................29 Company car tax for ultra-low emission cars......................................................................................................29 Planning to payroll Benefits in Kind in 2017? .....................................................................................................30 CIPP survey: Simplifying tax and NICs treatment of termination payments .......................................................31 CIPP survey: Alignment of dates for ‘making good’ on benefits-in-kind .............................................................31 Tax-Free Childcare.............................................................................................................................................32 CIPP Survey: Consultation on salary sacrifice for the provision of BiKs.............................................................33 Government News ............................................................................................. 34 Can online activity history help GOV.UK Verify work for more people? .............................................................34 GDS - continuous iteration of research is the key to building services that meet user needs ............................35 GOV.UK Verify technical update ........................................................................................................................35 Office of Tax Simplification: new board members announced............................................................................36 HMRC Protecting customer data with 2 Step verification ...................................................................................36 Government Committee launch inquiry on executive pay ..................................................................................37 Autumn Statement 2016 date confirmed ............................................................................................................38 Finance Act 2016 ...............................................................................................................................................38 HM Revenue & Customs ................................................................................... 39
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The Chartered Institute of Payroll Professionals
Policy Bi-Monthly Newsletter – September 2016
New services available through Personal Tax Accounts ....................................................................................39 Government Gateway Transition and Transformation........................................................................................39 Bank of England cuts Bank Rate to 0.25%.........................................................................................................41 Making Tax Digital consultations published........................................................................................................40 Employer Bulletin: August 2016 .........................................................................................................................41 Faster, easier tax repayments via Personal Tax Accounts.................................................................................42 Request to opt out of receiving your PAYE annual tax summary .......................................................................42 Tackling the hidden economy.............................................................................................................................43 Telephone scams...............................................................................................................................................43 Telephone scam.................................................................................................................................................44 Making Tax Digital for Business: Consultation events........................................................................................44 HMRC ‘Building Our Future’...............................................................................................................................45 HMRC launch Worldwide Disclosure Facility .....................................................................................................45 HMRC timetable to replace PAYE EDI channel .................................................................................................46 Tax fraudster ordered to pay up or face jail........................................................................................................46 Government Gateway migration project .............................................................................................................47 National Minimum Wage (NMW)....................................................................... 48 NMW guidance and enforcement – did you know? ............................................................................................48 £1m in back pay for non-payment of National Minimum Wage ..........................................................................49 Largest ever list of National Minimum Wage offenders published ......................................................................50 PAYE (Pay As You Earn)................................................................................... 51 CIPP Survey - Off-payroll working in the public sector - reform of the intermediaries legislation .......................51 The Continuity of Employment Test ...................................................................................................................51 Appealing a penalty – what may count as reasonable? .....................................................................................52 Employment Intermediaries – are you reporting or running the risk of penalties?..............................................53 CWG2(2016) Employer Further Guide to PAYE and NICs.................................................................................53 PAYE tax table specifications for Scottish Rate of Income Tax..........................................................................54 Treatment of income from sporting testimonials.................................................................................................54 Simplification of the tax and National Insurance treatment of termination payments .........................................55 Consultation on non-dom reforms ......................................................................................................................55 New employee coming to work from abroad ......................................................................................................56 Notice of transfer of surplus Income Tax allowances (575(T)) ...........................................................................56 Benchmark Scale Rates for inward assignees ...................................................................................................56 CIPP response to consultation on off-payroll working in the public sector .........................................................58 National Insurance numbers with prefix KC .......................................................................................................60 Statutory sick pay when an employee is in legal custody...................................................................................61 RTI challenges faced by micro-employers .........................................................................................................62 Pensions............................................................................................................. 63 Automatic Enrolment............................................................................................................................................63 High compliance rates underpin success of automatic enrolment......................................................................63 The Pensions Regulator update .........................................................................................................................64 Automatic enrolment hits 200,000 employer landmark.......................................................................................65 Automatic enrolment: Don’t let your clients’ holiday plans risk a fine .................................................................65 Re-enrolment guidance for employers revamped ..............................................................................................65 Would you like The Pensions Regulator to speak at an event? .........................................................................66 Revised guidance on choosing a pension scheme ............................................................................................66 Pensions Regulator hosts free business adviser events ....................................................................................67 Extended refresher webinar - plus LinkedIn Q&A ..............................................................................................67 Automatic enrolment: Postponement and seasonal workers..............................................................................67 General Pensions News .......................................................................................................................................68 Local government pension scheme changes .....................................................................................................68 Pension schemes newsletter 80.........................................................................................................................68 NISPI Countdown Bulletin - August 2016...........................................................................................................68 Widespread support for development of Retirement Quality Mark .....................................................................69 Pensions Industry Stakeholder Forum minutes..................................................................................................70 Consultation on introducing a Pensions Advice Allowance ................................................................................70 New ‘trace a lost pension’ tool launched ............................................................................................................71 Pensions Dashboard prototype to be ready by spring 2017...............................................................................71 Pensions industry sets out top 5 priorities for new Under Secretary ..................................................................72 Tax Agents and Advisers.................................................................................. 73 Tax Agent Toolkits - are you using them? ..........................................................................................................73 Agent update 55.................................................................................................................................................73 Tax Agents: Communicating in a digital age ......................................................................................................74 Talking Points – Agent digital meetings..............................................................................................................74
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The Chartered Institute of Payroll Professionals
Policy Bi-Monthly Newsletter – September 2016
Agents unable to log in to their online account...................................................................................................74 Automatic Exchange of Information Event for Tax Agents .................................................................................75 Talking Points – Agent digital meetings..............................................................................................................75 Tax Avoidance & Evasion................................................................................. 76 Tackling Disguised Remuneration: technical consultation..................................................................................76 Tax avoidance enablers to face tough new penalties.........................................................................................76 What you need to know about tax avoidance.....................................................................................................77 Tackling offshore tax evasion: a requirement to correct .....................................................................................78
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The Chartered Institute of Payroll Professionals
Policy Bi-Monthly Newsletter – September 2016
Apprenticeships
CIPP webcast on the Apprenticeship Levy 1 August 2016
The CIPP Policy Team has produced a short webcast explaining what the Apprenticeship Levy is, how it is calculated, paid and reported and some of the implications employers need to consider ahead of the April 2017 implementation.
CIPP webcast on the Apprenticeship Levy
CIPP Professional Careers Academy
An apprenticeship is a way for young people and adult learners to earn while they learn in a real job, gaining a real qualification and a real future. 82% * of employers believe that hiring apprentices help businesses to grow their own talent by developing a motivated, skilled and qualified workforce. What does an apprenticeship look like? We can help you find an apprentice for your business. An apprenticeship can typically include: A recognised qualification relevant to your industry Functional skills in mathematics, english and information communications technology, if they are needed Apprenticeship learning can take place in your working environment with minimal disruption and normally takes between 12 and 15 months. 47% * of apprenticeship employers have recommended apprenticeships to other employers Apprenticeships are a tried and tested way of recruiting new staff, retraining or upskilling your existing workforce that are returning from a break in their career An apprenticeship improves individuals effectiveness as well as that of the organisation They are an effective way of bringing new ideas into your business An apprentice will provide you with a skilled work force in the future What are the benefits of hiring an apprentice?
Can anyone be an apprentice and how much will this cost my business? Yes. However, this depends on the individual apprentice and the cost will depend on: The age of the apprentice Their current qualification level If the apprentice is studying Residential status We can advise you as further rules apply.
Can I receive financial assistance? The government are currently offering two incentives ** , these are: Apprenticeship Grant for Employers for those learners aged between 16–24 Department for Work and Pensions Wage incentive scheme for those learners aged between18–24 While we cannot influence if and when these funds will be paid, we can support you in making an application.
What do we provide? We can work with you to:
Advertise, interview and recruit apprentices
Deliver an individually tailored apprenticeship programme for the learner Provide a network of specialist assessors to work with your apprentice, offering them support and mentoring throughout their apprenticeship
In addition we will provide your apprentice with:
A safe learning environment to build their knowledge and succeed in their apprenticeship Trial student membership of the CIPP including all the benefits that this provides
For more information and to discuss recruiting an apprentice please email us or phone 0121 712 1040.
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The Chartered Institute of Payroll Professionals
Policy Bi-Monthly Newsletter – September 2016
Consultation on the Scottish Government Response to the UK Apprenticeship Levy 4 August 2016 Responses to the consultation on Consultation on the Scottish Government Response to the UK Apprenticeship Levy can be submitted using the online system by no later than 26 August 2016. The consultation is seeking views on options for the use of Apprenticeship Levy funding that is to be transferred to the Scottish Government. The Scottish Government will consider all responses as part of the forthcoming budget process.
Consultation Questions
1. Should the Government’s commitment to 30,000 Modern Apprenticeships starts a year by 2020 a) be maintained or b) be increased? 2. Should Apprenticeship Levy funding support growth in the number of Graduate Level Apprenticeships in Scotland? 3. Should Apprenticeship Levy funding be used to establish a flexible skills fund to support wider workforce development? 4. Should Apprenticeship Levy funding be used to support the expansion of Foundation Apprenticeships? 5. Should Apprenticeship Levy funding be used to help unemployed people move into employment, and to help meet the workforce needs of employers? 6. Are there any additional suggestions on how Apprenticeship Levy funding might be used? Please complete your response using the online system or send your response with the completed Respondent Information Form included at the end of the consultation paper to apprenticeshiplevy@gov.scot . The same email address is to be used if you have any questions.
Or by post to:
Apprenticeship and Employer Incentives Team Scottish Government 6th floor, 5 Atlantic Quay 150 Broomielaw Glasgow G2 8LU
Apprenticeship funding consultation closes 5 September 31 August 2016 The DfE would like to hear employers’ and providers’ views on funding proposals, particularly how they plan to adapt their hiring, training and development activities in response to these reforms. The DfE have published a survey which closes 5 September 2016. The Department for Education (DfE) and the Skills Funding Agency (SFA) have published a discussion paper on the proposed apprenticeships funding support package that will operate in England from May 2017.
The Proposals for apprenticeship funding in England from May 2017 include:
How much employers will be able to spend on each apprenticeship The rules employers will need to follow.
The lists of individual apprenticeships show the proposed funding bands that will apply from May 2017 in England.
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The Chartered Institute of Payroll Professionals
Policy Bi-Monthly Newsletter – September 2016
Proposed funding bands for individual apprenticeship frameworks Proposed funding bands for individual apprenticeship standards
CIPP comment The CIPP will not be responding formally to this consultation but will be providing comments on the operational impact for employers and the payroll profession. If you have a vested interest as an employer or provider, we would encourage you to respond to the DfE survey directly by 5 September 2016.
Although skills policy is a devolved matter in Scotland, Wales and Northern Ireland views are also welcomed from employers in these nations.
The proposals outlined include plans to:
support all employers to offer high-quality apprenticeships: employers which are too small to contribute to the apprenticeship levy would have 90% of the cost of apprenticeship training paid - ensuring employers of all sizes can develop the next generation of skilled workers provide extra funding for young apprentices and care leavers: the government will pay an additional £2,000 to help 16- to 18-year-olds, young care leavers and young people with an education, health and care (EHC) plan, make their first step into the world of work - with £1,000 going to employers and an additional £1,000 to training providers. Furthermore, employers with fewer than 50 employees will not have to pay anything towards the cost of training a 16- to 18-year-old apprentice, young care leaver or young person with an EHC plan offer more flexibility for employers to retrain individuals: employers will be able to use levy funds to retrain workers in new skills, even if they have prior qualifications - giving them the freedom to make the training decisions that are right for them so they can train any individual to start an apprenticeship, as long as it is significantly different from their previous qualifications support employers taking on more apprentices: levy-paying employers - those with a pay bill of over £3 million that want to spend more on training than is in their digital account - will benefit from government support with 90% of their additional apprenticeship training costs being funded, so they can continue to recruit and retrain highly-skilled employees give employers more control and access to better quality training: employers will have the power to determine exactly what training their apprentices receive and what provider they receive it from. A new register of training providers, also outlined, will be introduced from April 2017 to improve the link between training providers and employers to will help employers identify a high-quality provider so they can deliver the skills they need to grow. Guidance updated In April 2016 the government published a guide for employers on how they will pay the levy , access the digital system and pay for apprenticeships in future. This has been updated with the latest information for employers. Next steps Throughout the summer, DfE and SFA will be engaging with employers, providers and other stakeholders as well as listening to views from the online survey. This will help to refine and develop the proposals ahead of October 2016, when it is planned that the following are published: The final funding bands that will apply in the new system The final, full set of technical rules that underpin the funding system Confirmation of how the proportion of pay bill that is paid to employees living in England will be calculated.
In December 2016 further employer guidance from HMRC on how to calculate and pay the apprenticeship levy will be published.
Register of apprenticeship training providers - survey 31 August 2016
The Skills Funding Agency plans to create a Register of Apprenticeship Training Providers (RoATP) to support an employer-led apprenticeship system. Training providers must apply to join the RoATP if they want to deliver apprenticeships to any employer from April 2017.
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The Chartered Institute of Payroll Professionals
Policy Bi-Monthly Newsletter – September 2016
The SFA has created a survey so that training providers and interested organisations have the opportunity to comment on their Proposals for a Register of Apprenticeship Training Providers (RoATP) .
The survey will close on Monday, 5 September.
Further information
Guidance for employers thinking about becoming apprenticeship training providers . This document will be of interest to employers who pay the levy, and may wish to act as their own training provider in the new system. Apprenticeship funding calculator . This tool will help all employers (both levied and non-levied) understand what levy they will pay and how they could use the new digital service to plan and fund training. Updated guidance on the apprenticeship levy: how it will work . Existing online guidance updated, which gives employers a clear explanation of how they will pay the levy, manage and use their funds in the new system.
Apprenticeship Levy guidance for software developers 19 September 2016
HMRC’s SDS Team has provided updated guidance for software developers on the Apprenticeship Levy which comes into effect in April 2017.
The record of amendments (see below), are listed at the end of the document and show what has changed from the first version which was published in June 2016.
To access the updated guidance scroll to the bottom of this news item .
Draft regulations for the calculation, payment and recovery of the Apprenticeship Levy 20 September 2016
HMRC has published the first set of draft regulations for the Apprenticeship Levy for a period of technical consultation, which will close on 14 November 2016.
In April 2017, the way the government funds apprenticeships is changing, through the introduction of the Apprenticeship Levy. Some employers will be required to contribute to a new Apprenticeship Levy.
This technical consultation asks for comments on the draft regulations made under the powers contained in the Finance Act 2016 to provide for the calculation, reporting and payment of the Apprenticeship Levy, and recovery of overpaid levy. These draft regulations also specify how the levy allowance will operate, on a monthly, cumulative basis. Geographical extent – this consultation applies to all employers in the UK, both public and private sector, who will or are likely to have a liability to pay the Apprenticeship Levy (annual pay bills greater than £3 million, subject to the rules on connection).
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The Chartered Institute of Payroll Professionals
Policy Bi-Monthly Newsletter – September 2016
Employment News
Employment Tribunals
Daily penalties: HMRC victory in Court of Appeal 1 August 2016
The Court of Appeal has confirmed that HMRC had correctly imposed daily late filing penalties under Schedule 55 Finance Act 2009. This decision is important as there have been a number of cases put on hold awaiting its outcome.
The case Donaldson v HMRC [2016] EWCA Civ 761 concerned whether the daily penalties issued by HMRC in respect of the taxpayer’s 2010/11 self-assessment return were valid. The taxpayer failed to file a paper return by 31 October 2011. In December 2011 he was sent a computer generated reminder stating he was too late to file a paper return without paying a penalty, and that daily penalties would apply if he failed to file by 31 January. He still did not file his return, and received a further reminder on 6 January, again stating that daily penalties would apply if the return was over 3 months late. The taxpayer finally filed his return on 1 May 2012 and received an assessment for fixed and daily penalties.
The First Tier Tribunal (FTT) previously found that, as HMRC had not given a notice to the taxpayer specifying the date from which the daily penalties applied, those penalties were not valid.
The Upper Tribunal (UT) however subsequently overturned that decision and found that the daily penalties had been correctly imposed.
The Court of Appeal has now upheld the decision of the UT, finding that: A generic policy decision taken by HMRC was sufficient to satisfy the requirement of para 4(1)(b) that HMRC must ‘decide’ that a penalty is payable: the decision does not have to be made on a taxpayer by taxpayer basis. The notices given by HMRC to the taxpayer were sufficient: all they had to do was inform the taxpayer that, if his return was 3 months late, daily penalties would be charged for up to 90 days. The UT had observed that HMRC had probably not satisfied its obligations under para 18 when issuing the penalty assessment, but it did not consider this in detail the issue was not under appeal. The Court of Appeal did go onto consider this point, again finding in favour of HMRC: The penalty assessment, in not stating the period in which the daily penalties applied, did not satisfy the requirements of para 18(1)(c). However, the taxpayer could not have been in doubt as to the period over which he incurred a liability based on the reminders received. The omission from the assessment was therefore one of form and not substance and the taxpayer was not misled or confused by it. This meant that, per the override in s114(1) TMA 1970, the omission did not affect the validity of the assessment.
The taxpayer’s appeal was therefore rejected.
With thanks to Ross Martin's SME tax news for providing this summary. They also commented on the case:
“ This decision is of interest as many taxpayers had appealed daily penalties based on the FTT decision and further appeals on behalf of the taxpayer. As a result a large number of appeals were stayed behind this case. HMRC’s success at the Court of Appeal may prove to be the final nail in the coffin for these appeals. The taxpayer has been represented pro bono with minimal personal involvement to date, so it is highly doubtful that a further appeal will be made.”
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The Chartered Institute of Payroll Professionals
Policy Bi-Monthly Newsletter – September 2016
Islamic headscarf ban is direct discrimination 2 August 2016
The CJEU's Advocate General has advised that it is unlawful to ban a Muslim employee from wearing her Islamic headscarf (hijab) when in contact with clients. In the French case of Bougnaoui v Micropole SA , Ms Bougnaoui was employed by Micropole SA as a design engineer. She was a practising Muslim and wore an Islamic headscarf (hijab) at work and when she visited clients. The headscarf covered her head but
left her face exposed. Following a complaint from a client, who requested that there should be "no veil next time"•, Ms Bougnaoui was asked not to wear her headscarf when visiting clients. She refused to do so and was subsequently dismissed. The French Labour Tribunal dismissed Ms Bougnaoui's claim for discrimination based on her religious beliefs and held that the dismissal was well founded on the basis of a "genuine and serious reason"•. This decision was upheld on appeal. The matter was then referred to the Court of Justice of the European Union (CJEU) for a preliminary ruling on whether Micropole's policy requiring an employee to remove her hijab when in contact with clients was a "genuine and determining occupational requirement"• under Article 4(1) of the Equal Treatment Directive (2000/78/EC). Advocate General Sharpston concluded that Ms Bougnaoui's dismissal for wearing a hijab when in contact with customers of the employer's business, in contravention of a direct instruction and a client's religious neutrality principle constituted unlawful direct discrimination on the grounds of religion or belief. Further, the Advocate General stated that the prohibition on direct discrimination extends to manifestations of religion or belief (that is to say, the fact that Ms Bougnaoui wore a headscarf) and it was clear that she had been treated less favourably on the ground of her religion than a comparator would have been treated in a comparable situation. The Advocate General added that discrimination would only be lawful if based on an "occupational requirement"•, which must be "genuine"• and limited to matters which are absolutely necessary in order to undertake the professional activity in question. For example, it would be proportionate to exclude, for health and safety reasons, a Sikh employee who insisted on wearing a turban for religious reasons from working in a post that required the wearing of protective headgear. The decision is in sharp contrast to the opinion of Advocate General Kokott in Achbita v G4S Secure Solutions NV [2016] (Case C-157/15), which concluded that prohibiting the wearing of a headscarf can be justified by an employer's general policy of neutrality and where the ban applied consistently to all visible signs of religious or philosophical beliefs.
Readers will be aware that the Advocate General's opinion is merely an opinion and is not binding on the CJEU, which could reach a different conclusion.
With thanks to Daniel Barnett’s employment law bulletin which provided the details of this case.
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The Chartered Institute of Payroll Professionals
Policy Bi-Monthly Newsletter – September 2016
Indirect Sex Discrimination 8 August 2016
Does the employment tribunal have to weigh the legitimate business aims of the employer against the provision criterion or practice (PCP) when determining justification for the discriminatory effect?
Yes, held the EAT XC Trains Ltd v CD and Aslef & Others .
The employee is a single mother who had three children under the age of five. She had great difficulties meeting her child care requirements and fulfilling her obligations under her full-time contract of employment.
The EAT held the PCP of requiring a workforce to work over 50% of rosters and on Saturdays amounted to indirect sex discrimination under s19 Equality Act 2010 on the basis it disadvantaged women.
The EAT considered whether the PCP was a proportionate means of achieving a legitimate aim. In this case the PCP applied to those making flexible working requests to allow for child care.
The EAT applied the Supreme Court's decision in Homer which emphasised the need for employment tribunals to take a structured approach to the question of justifying the PCP with a legitimate aim.
It held that the employment tribunal erred in law by failing to weight the legitimate aims of the employer against the discriminatory effect of the PCP. Further the employment tribunal erred in law in positing means of removing the discriminatory effect of the PCP without considering whether there was a factual basis for their suggestions and their effect on other employees.
With thanks to Daniel Barnett’s employment law bulletin which provided the details of this case.
Territorial Jurisdiction 5 September 2016
The Employment Appeal Tribunal heard a case where an employee of the British Council, managing a teaching centre in Bangladesh, tried to bring a claim under the Employment Rights Act and the Equality Act but was rejected by the Employment Tribunal as being outside of its jurisdiction. Was an employee who worked abroad for a British company, under a contract of employment governed by English law, which required a notional deduction for UK tax and eligible to a Civil Service Pension able to show an overwhelmingly strong connection with Great Britain and thus entitled to bring claims under the Employment Rights Act 1996 and the Equality Act 2010 ? Yes, held the EAT in Jeffery v The British Council . The Claimant was an employee of the British Council managing a teaching centre in Bangladesh. He resigned and sought to bring claims against his employer which were rejected by the Employment Tribunal as being outside of its jurisdiction. The Claimant appealed.
At the EAT, HHJ Richardson allowed the appeal. The following factors were all relevant to finding "an exceptional degree of connection with Great Britain and British employment law" :
1. He was a UK citizen, recruited in the UK to work for a UK organisation 2. The employment contract was subject to English law 3. Entitlement to a Civil Service Pension - which creates a strong link to UK employment law 4. Salary subject to notional deduction for UK income tax 5. The employer was a public body playing an important role for the UK.
A series of cases well known to employment lawyers (including Lawson v Serco Ltd , Bates van Winkelhof v Clyde & Co LLP and Dhunna v CreditSights Ltd ) were applied.
With thanks to Daniel Barnett’s employment law bulletin which provided the details of this case.
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The Chartered Institute of Payroll Professionals
Policy Bi-Monthly Newsletter – September 2016
What Uber's employment tribunal could mean for employers 8 September 2016
Uber is currently embroiled in employment tribunal proceedings which are considering the employment status of 19 of its drivers in the UK. An article from Financial Director highlights the impact that this case could have on employers even though it only involves 19 drivers; any judgment will impact all other drivers. Uber is arguing that its drivers, or ‘partners’ as it calls them, are self-employed, while GMB (the union representing professional drivers, and bringing the claim) is arguing that they are in fact workers and should be entitled to additional employment rights as a result.
National Living Wage A finding that the drivers are workers would undoubtedly have a huge impact. One of the areas of concern for employers is that many Uber drivers claim to earn well below the National Living Wage (NLW) and some may earn as much as £3 per hour less than the NLW (currently £7.20 per hour). If that is the case, the worker will be entitled to re- claim the backdated additional payments they should have received in the two years prior to the ruling. Uber is estimated to have 30,000 Uber drivers in London alone, so backdated payments of up to an additional £3 for every hour worked over two years to 30,000 drivers will have a substantial cost. Why are Uber so concerned? Working individuals in the UK are categorised into three main, distinct groups all of which are entitled to different rights, and subject to different obligations: Self-Employed Those who are genuinely self-employed (i.e. in business for themselves) do not enjoy any significant statutory employment rights. Workers Workers are a category who are entitled to certain rights, but do not have the status of ‘employees’. Workers have the right to be paid the National Minimum Wage, holiday pay and pension contributions (subject to meeting eligibility criteria), as well as sometimes having TUPE rights and the right to claim sick pay. Additionally, they have the right not to be discriminated against. Employees Employees have additional rights on top of those of workers, including the right to maternity/paternity pay and shared parental leave, statutory notice on dismissal, redundancy payments and a right not to be dismissed unfairly (after 2 years continuous service). The impact and cost to Uber increases with each batch of additional rights their ‘partners’ accrue depending on if they are deemed workers or employees. GMB are focusing their energy into obtaining a judgment that ‘partners’ are workers, as opposed to employees.
Read the full article from Financial Director
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The Chartered Institute of Payroll Professionals
Policy Bi-Monthly Newsletter – September 2016
Reasonable adjustments may extend to protection of pay 6 September 2016
Can the duty to make reasonable adjustments for a disabled employee extend to continuing to pay a higher salary when an employee is moved to a lesser role?
Yes, holds the EAT in G4S Cash Solutions (UK) Ltd v Powell
Due to disability, the Claimant had been moved from an engineering role maintaining cash machines to a less skilled 'key runner' role. After initially having his pay protected, the Respondent proposed reducing the Claimant's pay by around 10%, dismissing the Claimant when he refused the pay cut. The Employment Tribunal found the dismissal to be discriminatory and unfair, and that the reasonable adjustments required extended to maintaining the Claimant's former pay in his new role. The EAT found no reason in principle why the duty to make reasonable adjustments would not extend to protecting an employee's pay (along with other measures) to counter a disabled employee's disadvantage. The objectives of the legislation plainly envisage an element of cost to the employer, and 'pay protection' was but one form of cost to an employer. The question will always be whether it is reasonable for an employer to have to take that step to avert a disabled employee's disadvantage.
However, the EAT did not expect that requiring employers to make up pay would be an 'everyday event' for tribunals, and in changed circumstances such an adjustment may cease to a reasonable one an employer has to make.
With thanks to Daniel Barnett’s employment law bulletin which provided the details of this case.
cipp.org.uk
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The Chartered Institute of Payroll Professionals
Policy Bi-Monthly Newsletter – September 2016
General Employment News
Legislative priorities announced by Welsh Government 29 July 2016
Six Bills will be introduced over the next year - ranging from the establishment of new Welsh devolved taxes, to repealing sections of the Trade Union Act 2016.
Two Tax Bills will be introduced to establish the two taxes to be devolved to Wales in April 2018; a land transaction tax, which will replace the current stamp duty land tax (SDLT), and a landfill disposals tax for Wales, which will replace the current landfill tax. The Tax Collection and Management Act was passed by the National Assembly in April 2016 which provides the Welsh Government with the powers to collect and manage their own taxes. The Welsh Revenue Authority is being established to do this and will be operational by 2018.
The UK Parliament has also legislated to enable the National Assembly for Wales to introduce Welsh rates of Income Tax. If this was to happen, Income Tax rates could then be different to others parts of the UK.
New legislation will also be introduced to repeal sections of the UK Government’s Trade Union Act 2016in devolved areas.
When the First Minister, Carwyn Jones announced news of the Bills, he said:
“Over the next twelve months, we will introduce legislation that will deliver real improvements for the people of Wales.
Following the summer recess, we will introduce historic legislation to create the first made-in-Wales taxes in more than 800 years – a significant step for us as a government and for Wales as a nation.
We will also act to remove the UK Government’s fundamentally harmful reforms to the rights of workers in the public services this Welsh Government is responsible for, and introduce new laws to protect our social housing stock, improve public health, and reform the system for children and young people with additional learning needs.”
Statutory code of practice on English language requirement 29 July 2016 Part 7 of the Immigration Act 2016 places a duty on all public authorities in scope to ensure that their customer-facing staff can speak fluent English, or in Wales fluent English or Welsh. A draft statutory code of practice to support employers in complying with this new duty has been published.
The code will be laid before Parliament and issued in October but the early publication of the document is intended to support organisations to be ready to adhere to the statutory duty once it comes into force. It provides principles and examples for public authorities to consider when fulfilling their legal duties and obligations.
The new duty will assure citizens that there is not a language barrier that might prevent them from contacting or using public services or inadvertently put them at risk.
The government has worked with relevant employers throughout the development of the draft Code of Practice and will continue to do so to ensure that the duty is implemented in a way which ensures a positive impact for employees and service users in front line organisations.
cipp.org.uk
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