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Latest Brief - Week Ending 31 July 2015

The Apprentice: You’re Fined!

A government consultation has been launched this week seeking views on the introduction of an offence which would prohibit the use of the terms “apprentice” or “apprenticeship” in relation to any course or training in England unless it is in relation to a government funded apprenticeship. 

The government has expressed concern that the term “apprenticeship” might be labelled on courses which do not meet the standards of statutory government funded apprenticeships. The idea behind the new offence is to stop providers from offering poor quality training under the guise of being a government funded apprenticeship. At present there is no protection of the term “apprentice” that could allow the government to take action against providers who might try to do this. 

Those who are found guilty of the offence would be fined, should the offence be introduced. 

Termination Payments: To tax or not to tax?

Another consultation this week, this time launched by HMRC, into the payment of tax and National Insurance Contributions on termination payments. 

As many employers know, where a payment is made to an employee in consequence of, or in connection with, a termination of employment, sections 403 and 404 of the Income Tax (Earnings and Pensions) Act 2003 allow the first £30,000 of that payment to be paid free of tax.

The purpose of the consultation is to look at simplifying the tax and NIC treatment of termination payments. The government wants to reduce taxpayer uncertainty and reduce the scope for the avoidance of paying tax. Firstly, there is a proposal to remove the distinction between contractual and non-contractual payments for the treatment of payment in lieu of notice clauses (“PILONs”) so that all PILONs would be treated in the same manner. Secondly, in order to offer some tax relief to those losing their jobs, there is a proposal to introduce a new exemption from income tax and NICs on termination payments. One possibility is to consider an exemption which increases with years’ service but the entitlement to the exemption would not arise until an employee has 2 years’ service.

It is anticipated that a summary of responses to the consultation will be published in Autumn this year.

Short service but not a short story

And finally a cautionary reminder that short service dismissals aren’t always straightforward or risk free.

In Truman –v Bibby Distribution Limited, an employee with one year’s service was dismissed and told that the reason for his dismissal was that his heart was not in the business and a customer was dissatisfied with him. However, before his dismissal, he had informed his employer that he would have increased caring responsibilities for his daughter, who suffered with cystic fibrosis. 

Mr Truman brought a claim for associative disability discrimination, claiming that the real reason for his dismissal was because of his association with his disabled daughter and the fact he had raised the need for additional time away from work to care for her. The Tribunal did not get a satisfactory reason from the employer for the real reason for the Claimant’s dismissal as there was no evidence of poor performance or any evidence to confirm that a customer had been dissatisfied with him. 

This made the timing of the dismissal look suspicious, particularly given Mr Truman would have been entitled to exercise his right to parental leave upon reaching one year’s service. He was successful with his claim for associative disability discrimination.

Latest Brief - Week Ending 24 July 2015

Employment Tribunal Fees: Money –v- Justice?

This week a select committee of MPs has launched an inquiry into court and tribunal fees to assess whether or not their introduction has affected access to justice for workers.

The Coalition Government introduced fees for workers in the UK to issue claims in the Employment Tribunals in order to lighten the cost of employment claims on the public purse. It was also hoped that the number of vexatious claims would fall. However, with such a large reduction in the number of claims being brought, one must beg the question, has the introduction of fees simply prevented those with genuine claims against companies from being able to afford to pursue them?

After various appeals and challenges in this area over the last year, it will be interesting to see what findings the MPs make following their inquiry.

This is a separate inquiry from the Ministry of Justice’s review of employment tribunal fees, which was announced in June this year and which will continue until the end of 2015.

Ikea first large retailer to announce payment of the Living Wage

Following George Osborne’s announcement in the budget that the national minimum wage will be supplemented by a ‘National Living Wage’, Ikea is the first large retailer to commit to paying its workers the increased hourly rate from April 2016.

Whilst more than 1,600 businesses already pay the National Living Wage, none of the major retailers had signed up until Ikea’s announcement this week. This will mean a pay rise for more than half of its staff.

Source: The Guardian

Fit for Work Service completes national rollout

The Fit for Work Service is now live over all of England. The Service aims to reduce the impact of long term sickness absence by assisting employees who have been absent from work for a period of 4 weeks or more. It is a free service which includes a telephone based health assessment followed by a personalised return to work plan.

At present, only GPs can offer to refer patients to this service but it is anticipated that by autumn, employers will be able to make referrals directly.

Interestingly, only earlier this month, a survey showed that 76% of employers and 60% of GPs remained unaware of this service. The survey also revealed that many GPs were uncertain of the impact the service would have on reducing sickness levels.

Whilst the service may be live, having completed its pilot stage, it seems it still has a way to go to make employers and GPs aware of the benefits it asserts it can offer. 

Emptying locker contents, including the Quran, not religious discrimination

A Muslim security guard has lost his claim of religious discrimination after his locker, containing the Quran, was emptied during his paid absence from work.

In Hussain –v- Bandera Ltd, the security guard was asked to empty his locker before he went on leave. He did not do so. During his leave, his (and other employees’) lockers were emptied and the contents placed in labelled, black plastic bags. The security guard brought a claim of religious discrimination on the grounds that his employer had disrespected his religion by emptying his locker and placing the Quran in a bag.

The Tribunal rejected the claim finding that no disrespect had been intended by the employer’s actions. The person who emptied the lockers did not know that there was a Quran in the locker. The claim therefore failed.