Employment Advice Update: July 2010

Since the May bulletin there have been several issues to bring to your attention. Below is a summary of these, along with details of the Statutory minimum entitlements currently in force. For further information on these on any other HR matters, please contact Abby, Jane, Maggie or Bob on 01347 825710 or email employment.advice@nyfvo.org.uk

Budget implications

* a consultation on 'whether' to phase out the Default Retirement Age. This was quickly followed by HM treasury's publication of the Budget red book, which clarified this: "To ensure that those who wish to work beyond 65 are able to, the Government will consult shortly on how it will quickly phase out the Default Retirement Age from April 2011."

* from 2011 the majority of benefits will be up-rated in line with the Consumer Price Index rather than the Retail Prices Index. It's not yet clear what impact, if any, this will have on employment-related benefits, such as presumably including maternity pay, sick pay, etc

* a two-year pay freeze in the public sector (whose payscales are emulated by many voluntary organisations) the exception being employees earning less than £21,000 pro rata, who will receive a flat pay rise of £250 pro rata in both these years

* the threshold at which employers start to pay National Insurance will rise by £21 per week above indexation from April 2011

* the personal allowance, below which no income tax is payable, will be raised by £1,000 to £7,475 in April 2011.

New occupational health advice line

The government is piloting a new Health for Work Adviceline for organisations with less than 250 staff. The aim is to provide free, quick and easy access to effective professional advice and guidance in areas of employee well-being and is available during office hours on 0800 0 77 88 44.
For more information, visit www.workingforhealth.gov.uk  

Time off for training

On 6 April 2010, employees with at least six months' service in organisations with more 250 or more employees were given the right to request unpaid time off for training that will benefit both the employee and the employer. It is the right to request and must be given serious consideration, only being refused if there is a substantial business reasons. Employers are not obliged to pay for the training or the time spent away from work. This will be extended to all organisations from April 2011.

Equality Act Update

Theresa May, newly-appointed Minister for Women and Equalities, has now announced that the core provisions of the Equality Act (which was passed in April 2010) will come into force in October 2010 as planned. We will provide further information as it becomes available.

The aim of the Act is to update, simplify and strengthen the existing law and has been welcomed by many, including Equality Practitioners. The general consensus is that it will

- "deliver a simple, modern and accessible framework of discrimination law which protects individuals from unfair treatment and promotes a fair and more equal society".

- ".........help business treat staff fairly and meet the needs of a diverse customer base. The law will be easier to understand and better able to protect people from discrimination"

Meanwhile, you might like to read the guidance The Equality Act - What's new for employers? published by ACAS, which can be found at www.acas.org.uk

Childcare vouchers

Currently the first £55 a week of employer-provided childcare vouchers is exempt from both income tax and national insurance contributions, so long as certain conditions are met e.g. the vouchers must be for approved childcare. From 6 April 2011, employees taking up childcare vouchers for the first time will only be eligible for basic rate tax relief of 20%, although existing users of childcare vouchers will be unaffected.

Retirement lawful - but just a matter of time

At the moment, employers can lawfully retire employees at or above 65, or the employer's normal retirement age if this is higher. Provided the statutory retirement procedure is followed, the employee will not have a successful unfair dismissal or age discrimination claim. The government will be looking at how this can be phased out from April 2011.

Rooted to our chairs

A survey carried out by the Chartered Society of Physiotherapy has found that one in four people regularly work all day without taking a break mainly because of their workload. Cost implications for employers include reduced productivity and performance along with increased absence, often linked to conditions such as depression, anxiety and heart disease. It is important to ensure that your employees take the breaks they are entitled to and have a manageable workload. It is important to prevent pressure becoming stress and if you think any of your employees are struggling to cope at work you need to be able to identify the early warning signs such as lack of enthusiasm for their job, failure to meet deadlines, absenteeism, fatigue, headaches.

Current Statutory Entitlements

The National Minimum Wage is £5.80 for employees aged 22 and older, £4.83 for employees aged 18 - 21, £3.57 for employees 16-17.

Statutory redundancy pay rate is:

0.5 weeks pay for each year of service during which the employee was under 22 years of age

1 weeks pay for each year of service during which the employee was aged 22 to 40

1.5 weeks pay for each year of service during which the employee was aged 41 and older

One week's pay is limited to a maximum of £380 and length of service is limited to 20 years

Statutory Sick Pay is £79.15 per week for a maximum of 28 weeks. [a3]

Statutory Maternity Pay is paid for 39 weeks at £124.88 per week or 90% of the employee's average gross weekly earnings, whichever is the lower.

Employees may be entitled to 90% of their salary (no upper limit) for the first 6 weeks subject to average weekly earnings.

Statutory Paternity Pay is paid to employees with average weekly gross earnings of £97 or more (before tax). The payment is for 1 or 2 consecutive weeks at 90% of the employee's weekly earnings or £124.88, whichever is the lower.

The right to request flexible working now applies to employees with a child under the age of 17 (or 18 if the child is disabled).