What did we get up to last month?
The budget, which was announced by George Osborne on 16 March 2016, included a number of employment-related provisions:
- From April 2018, the amount of any termination payment which is in excess of £30,000 will be subject to employers' national insurance contributions, as well as income tax. Currently, such payments attract income tax deductions only. No part of the termination payment, including any sums in excess of £30,000, will attract employees' national insurance deductions, as is currently the case.
- Legislation is to be introduced to ensure that all payments in lieu of notice and some damages payments will be subject to tax and national insurance contributions.
- The government will launch a consultation next month on how to go about implementing its intended extension of shared parental leave to grandparents. The consultation will also look at options for streamlining the current regulations, which could include simplifying the eligibility and notification requirements.
- The option for employees to receive certain benefits through the salary sacrifice scheme is to be limited. In particular, the childcare voucher scheme will be closed to new entrants with effect from April 2018.
You may have seen in the press last week that a study carried out by My Family Care revealed that fewer than 1% of fathers had taken shared parental leave since the legislation came into effect last April. However, this figure has been completely misquoted. In the small sample of people that My Family Care had spoken to, it was fewer than 1% of men who had taken SPL; that is all men – including those who weren't entitled to take SPL to begin with, either because they're not new fathers or don't otherwise meet the eligibility criteria! In fact, of those who had participated in the survey, more than 30% of the men who had been eligible to take SPL had done so – quite a contrast to the 1% quoted across the media. The My Family Care report is of some interest, but cannot be relied upon to prove (or disprove) the success of the SPL legislation given that only 1,000 employees were included in the research. As yet, there is no reliable data produced by any organisation detailing the uptake of SPL across the board.
DON'T FORGET that the National Living Wage is now in force. All workers aged 25+ are entitled to receive the higher minimum wage rate of £7.20 per hour with effect from 1 April 2016.
Any new cases to be aware of?
In Donaldson v Peninsula Business Services the EAT has held that childcare vouchers provided under a salary sacrifice scheme are part of an employee's remuneration, rather than a benefit, and therefore do not have to be provided during an employee's maternity leave. The EAT disagreed with the (non-binding) HMRC guidance which stipulated that the vouchers must constitute a benefit given that they are not a sum of money paid to the employee by the employer by way of wages or remuneration; they can only by used towards childcare and cannot be exchanged for cash. The EAT concluded that the phrase "salary sacrifice" was a misnomer, stating "it is in reality not a sacrifice but a diversion of salary, which the employee has earned but which is redirected prior to it being placed in the employee's pay packet, in order to purchase vouchers… The sum by which the voucher is purchased is that which is payable to the employee". On that basis, it held that childcare vouchers which are purchased under a salary sacrifice scheme are to be treated as remuneration during maternity leave with the consequence that employers are not under an obligation to continue to provide them during the leave period.
It is important to note that the EAT was less than certain that it had reached the correct conclusion in this case and therefore there is every likelihood that this decision will be appealed. Any employers who do provide vouchers under a salary sacrifice scheme may therefore be best advised to wait until any appeal is concluded before making changes to their maternity pay policy.
The EAT upheld the Tribunal's decision in Hodkinson v Private Medicine Intermediaries Ltd that the respondent had constructively unfairly dismissed the claimant when it wrote to her raising concerns about her conduct while she was certified as unfit to work due to work-related depression and anxiety. Both the Tribunal and the EAT concluded that the respondent's actions in raising concerns with the claimant which were neither serious nor urgent, but which were highly likely to cause her further distress, were a repudiatory breach of contract.
Although employers are entitled to, and indeed should, keep in regular contact with employees while they are on sick leave, they must be very careful to ensure that contact is both appropriate and necessary in order to avoid, at best, upsetting the employee and, at worst, constructively dismissing them.
The Court of Appeal has confirmed in Michalak v General Medical Council that employment tribunals are able to hear complaints of discrimination brought against qualification bodies by their members. In this case, Ms Michalak, who is a doctor, brought a discrimination claim against the General Medical Council alleging that it had discriminated against her and harassed her under the Equality Act 2010 during an investigation that it carried out in relation to her fitness to practice. The CA confirmed that the employment tribunal was the correct forum to consider this complaint – which related to the GMC's conduct, rather than any dispute about the claimant's membership – despite the fact that there was no employment relationship between them.
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