Additional Paternity Leave: Update

Transcription

1 March is the employment update service brought to you by Bristows' employment team. Additional Paternity Leave: Update Fathers of children who are born on or after 3 April 2011 or co-adopters who are notified of a match with a child on or after 3 April 2011 will have the right to take Additional Paternity Leave (APL). The leave must be taken in multiples of complete weeks and can last between 2 weeks and 26 weeks. It can be taken any time during the period from 20 weeks after the child is born (or placed for adoption) until their first birthday (or first anniversary of being placed for adoption). The mother or co-adopter must have returned to work. The employee taking APL will be entitled to Additional Statutory Paternity Pay for the number of weeks of unexpired maternity allowance, maternity pay or adoption pay that remain once the child's mother or co-adopter has returned to work. Abolition of the Default Retirement Age From 6 April 2011 the Default Retirement Age (DRA) will be abolished. The Employment Equality (Repeal of Retirement Age Provisions) Regulations 2011 contain transitional provisions. These provide that employees who will reach the age of 65 on or before 30 September 2011 can still be compulsorily retired using the DRA provided that notice of retirement is issued to them on or before 5 April Employers who wish to rely on the transitional provisions in the Regulations must ensure that the notice of retirement is between 6-12 months long and is issued to the employee on or before 5 April 2011 with an intended retirement date of no later than 4 April The employee will be able to make a request to continue working provided it is made between 3-6 months before the intended retirement date (but no later than 4 January 2012) and is in accordance with the statutory provisions in the Employment Equality (Age) Regulations 2006 (Age Regulations). If such a request is made, the employer must comply with the relevant procedure in the Age Regulations. However, any extension agreed must be limited to 6 months (under the Age Regulations an extension greater than 6 months will require a new notice of retirement to be issued which will not be possible after 5 April 2011). Such an extension should therefore expire by no later than 3 October Employers should note that there is some debate about the latest dates for the intended retirement and for a postponed retirement date but we have taken a cautionary view and given the earliest possible dates. After 6 April 2011, employers will have to show that there is an objective justification for dismissing an employee at a set retirement age. This will mean that the employer will have to show that there was a legitimate aim for having such a retirement age and the means used to pursue it were In this issue Additional Paternity Leave: Update Abolition of the Default Retirement Age Change to PAYE treatment of post-p45 termination payments Increase in statutory maternity, paternity and adoption pay and statutory sick pay Bribery Act 2010: Update Is a belief in animal rights and anti-fox hunting a philosophical belief? Equality Act 2011: Update Extension of flexible working Can an employee be dismissed for sending an offensive from his home computer to the home computer of a colleague? ICO Fines: Password protection is not enough Budget 2011: Update Can a series of letters alleging personal and professional misconduct amount to harassment under the Protection from Harassment Act 1997? Two Tier Code repealed Consultation on Fair Deal Previous issues Click HERE for previous issues

2 reasonable. This is likely to be difficult for employers to prove. However, the abolition of the DRA does not mean that employees can no longer retire; simply that it will increasingly be for employees to decide when they wish to retire rather than being compelled to do so against their wishes. of Up Close and Personnel About the team Click HERE to find out about Bristows' Employment practice Change to PAYE treatment of post-p45 termination payments Regulations to amend the Income Tax (Pay As You Earn) Regulations 2003 were published by HMRC on 17 March 2011 which make significant changes to the taxation of termination payments. From 6 April 2011, employers will be required to apply the usual basic, higher and additional tax rates (without taking personal allowances into account) to all taxable post-p45 payments. Under the current tax regime (which will continue to apply up to 5 April 2011), employees who are higher rate taxpayers currently enjoy a cash flow advantage if they receive termination payments after their P45 has been issued, as the taxable part of the termination payment (i.e. an amount in excess of 30,000 which does not fall under any other exemption) is taxed by the employer at basic rate only (using tax code BR). The employee is then required to declare the payment on their tax return and will be responsible for any further tax due through the self-assessment system. This can give the employee a significant cash flow benefit, particularly where a termination payment is made early in the tax year. In contrast, termination payments that are made before a P45 is issued are taxed at the employee's marginal rate, subject to any personal allowances. However, under a new regime which will take effect from 6 April 2011, employers must apply a new tax code OT to post-p45 termination payments. This means that: payments will be taxed as if the employee does not have any personal allowances; and income tax will be withheld on a non-cumulative basis at the basic, higher and additional rates of tax, calculated on the basis of 1/12 of each tax band, on a first month basis. Whilst this will not ultimately change the amount of tax payable, it may lead to the employee suffering a cash flow disadvantage and may also result in an overpayment of tax which the employee will then have to recover from HMRC through the self-assessment process. Where cash flow is an important factor for an employee, there are various options that may assist in negotiations, such as making a termination payment before the P45 is issued or making tranched termination payments, each of which will be taxable independently on the OT basis of calculation. Employers who fail to make the appropriate deductions are likely to face claims from HMRC to pay any outstanding balance and will then have to pursue the employee to recover the amount paid. Increase in statutory maternity, paternity and adoption pay and statutory sick pay From 11 April 2011:

3 the standard rates of SMP, SPP and SAP will increase from to per week; and the standard rate of SSP will increase from to per week. Bribery Act 2010: Update The Government has announced that the Bribery Act 2010 will come into force on 1 July 2011 and has published guidance to help businesses understand what sorts of procedures they can put in place to prevent bribery. The Government has published two sets of guidance: "Bribery Act 2010: Guidance about procedures which relevant commercial organisations can put into place to prevent persons associated with them from bribing", and a "Quick Start" guide aimed at SMEs which sets out the key points. Both sets of guidance can be found on the Ministry of Justice website. Is a belief in animal rights and anti-fox hunting a philosophical belief? According to the Employment Tribunal in Hashman -v- Milton Park (Dorset) Ltd t/a Orchard Park 2011 the answer is yes. The Employment Tribunal held that the Claimant's belief in the sanctity of life was a philosophical belief comprising beliefs in "the value of life or veganism, environmentalism and animal rights activism". The Claimant thought deeply about his beliefs and tried to live in accordance with them, notwithstanding the fact that he had continued to work for the Respondent once he had found out that the majority of its shareholders were prohunting. However, this was held not to be a reason to reject the Claimant's argument that he had "a set of cogent and coherent beliefs". In the Tribunal's opinion, moral decisions cannot be based on "black and white principles" and the Claimant had accepted that he had to live in the real world rather than choosing to bring an end one of his means of livelihood. The Employment Judge observed that his judgment was very much based on the facts in this case. He emphasised that he was not seeking to suggest that everyone who supported fox hunting would be held to have a protected belief. The case will now proceed to a full hearing which will decide whether the Claimant suffered unlawful discrimination as a result of his belief. Equality Act 2011: Update Section 159 of the Equality Act 2010 which deals with positive action in recruitment and promotion will come into force on 6 April Positive action in recruitment and promotion can be used where an employer reasonably believes that people with a protected characteristic are under-represented in the workforce, or suffer a disadvantage connected to that protected characteristic. It allows an employer faced with making a choice between two or more candidates, each of whom is "as qualified" as

4 the other or others, to take into consideration whether one is from a group that is disproportionately under-represented or otherwise disadvantaged within the workforce. This is referred to as a "tie-breaker" or the "tipping point". It is far from clear how questions of whether "A is as qualified as B" will be determined. Recruitment or promotion decisions rarely come down purely to "qualifications" in the formal sense, and employers often give greater weight to experience and other more subjective qualities when recruiting. In most cases, where there are two or more candidates in a "tie break" situation, the final decision will reached by a partially-subjective process of weighing up each candidate's qualifications, experience and other strengths and weaknesses. On 13 January 2011, the Government published "A Quick Start Guide To Using Positive Action In Recruitment": The Guide refers to candidates being of "equal merit", rather than using the statutory phrase "as qualified as", and states that: The "equal merit" test can take into account a candidate's overall ability, competence and professional experience, together with any relevant formal or academic qualifications, as well as any other qualities required to carry out the particular job. A person with higher academic qualifications is not automatically "better qualified" for the purposes of positive action. An academically-qualified person with little experience could be of equal merit to a person with no formal qualifications but years of experience, if they could "do the job to the same standard but in different ways". Extension of flexible working The proposed extension of the right to request flexible working to all parents of children up to the age of 17, which was due to come into force on 6 April 2011, has been dropped. Can an employee be dismissed for sending an offensive from his home computer to the home computer of a colleague? In Gosden -v- Lifeline Project Ltd 2011 the Employment Tribunal held that the Claimant had been fairly dismissed for sending an offensive chain containing racist and sexist material to the home computer of a colleague. The Claimant was employed by a charity which helps drug users in prison. The Claimant forwarded the offensive to a colleague who was employed by the prison in which the Claimant worked. This colleague forwarded the to another employee at the prison. On becoming aware of the , the prison authorities commenced an investigation which led to the Claimant being suspended from working at any prisons in Yorkshire or Humberside. The Claimant was then put through a disciplinary procedure, at the conclusion of which he was dismissed for gross misconduct on the grounds that he had committed an act which could damage the Respondent's reputation and for having breached the Respondent's equal opportunities policy. The Employment Tribunal found the dismissal to be fair. It held that it was within the range of reasonable responses for an employer to conclude that forwarding such an to an employee of one of its biggest clients could

5 damage its reputation. The Tribunal also considered whether the Human Rights Act 1998, in particular the right to privacy, had an impact but considered that, although the was sent from one employee's home computer to another employee's home computer, there was no right to privacy. The fact that the had been headed "It is your duty to pass this on" meant it was not a confidential communication. The Claimant was aware that, once he had forwarded the , he had no control over the extent to which it could be further distributed or published. ICO Fines: Password protection is not enough In an article which first appeared in our monthly IT Update "Cookie Jar", Helen Rose explains that the penalties issued by the Information Commissioner following the theft of a laptop from an employee working at home are a reminder that the regulator takes failure to encrypt portable devices very seriously. A copy of the article appears on our website. Budget 2011: Update As part of its drive to remove red tape for businesses, the Government published its Plan for Growth alongside the Budget. It announced that the provisions of the Equality Act 2010 relating to dual discrimination will not now be introduced. It will also consult on the removal of provisions which require employers to take reasonable steps to prevent harassment of their staff by third parties. There will also be a general moratorium on new domestic regulation for companies with less than 10 employees. Dual discrimination, which would have allowed claims to be brought in relation to a combination of two protected characteristics, will not now be introduced. The Government is to consult on removing what it describes as the "unworkable requirement" under section 40 of the Equality Act 2010 that employers take reasonable steps to prevent third-party harassment, e.g. by customers or visitors to the workplace. The Government is to introduce a general moratorium for employers with fewer than 10 employees which will exempt these companies from compliance with new domestic regulation, unless there are exceptional circumstances where there is a compelling argument for the moratorium not to apply (so, for example, the moratorium will not apply to the abolition of the default retirement age or the introduction of additional paternity leave). As the moratorium will only cover domestic legislation, employers will not be exempted from any laws which are introduced to implement European legislation. The moratorium will last for 3 years and is due to start from 1 April Can a series of letters alleging personal and professional misconduct amount to harassment under the Protection from Harassment Act 1997? According to the Court of Appeal in Iqbal -v- Dean Manson Solicitors 2011, a Court did not have to be satisfied that each letter amounted to a separate act of harassment. The three letters taken together were capable of amounting to a course of conduct. This case is of importance because of the employer's potential vicarious

6 liability under the Protection from Harassment Act An exchange between employees which could by itself appear innocuous may amount to harassment under the Act if it is part of a series of acts. Employers should ensure that their anti-harassment policies are clear that such behaviour could amount to harassment and is unacceptable. Two Tier Code repealed Eric Pickles, the Secretary of State for Communities and Local Government, announced on 23 March 2011 that the Code of Practice on Workforce Matters in Local Authority Service Contracts (the Two Tier Code) was to be repealed with immediate effect. The Two Tier Code was introduced by the previous Government in 2003 and applied to outsourcing from local authorities. It placed obligations on transferee contractors to provide no less favourable terms and conditions to new employees it recruited compared to those employees who transferred by operation of TUPE from the public sector. Its aim was to address the perceived problem of contractors employing new recruits on lower salary and benefit packages than the public sector employees who transferred on the outsourcing of local authority services. The repeal of the Two Tier Code is part of the Coalition Government's initiative to broaden the scope of competition for public sector outsourcing contracts. The abolition of the Two Tier Code should not have any retrospective effect. Accordingly, existing contracts and the employment terms that flow from them should not be affected by the withdrawal of the Code. The Government is now consulting on whether any new guidance will replace the repealed Code and related Guidance. Consultation on Fair Deal The government has recently launched a consultation on Fair Deal for Staff Pensions : Procurement of Bulk Transfer Agreements and Related Issues ("Fair Deal"). Fair Deal applies transfers of staff from the public sector to third party suppliers primarily on the outsourcing of public sector services. Under Fair Deal the transferee contractor is olbiged to provide access to a good quality pension scheme which provides broadly comparable benefits for transferred staff. On the basis that the majority of public sector employees are entitled to a (statutory final salary or) defined benefit scheme, satisfying this obligation has required transferee employers to provide access to a defined benefit scheme by way of a GAD approved scheme or permitting the transferred employee to remain in the public sector scheme by allowing the private sector employer to participate in that scheme. Issued in October 2010, the interim Hutton report commented that Fair Deal needed to be addressed in the context of the overall approach to public sector pensions. "Consultation on the Fair Deal Policy: treatment of pensions on compulsory transfers of staff from the public sector", which commenced on 3 March 2011 essentially presents three options, either : Option 1: maintain the status quo; Option 2: Amend and reform; or Option 3: Withdraw Fair Deal. Consultation closes on 15 June Given the reaction received to proposed changes to public sector pensions, any withdrawal or radical reform of Fair Deal is likely to be met with opposition from trade unions.

7 The information contained in this document is intended for general guidance only. If you would like further information on the above, or advice on any other employment law issues, please do not hesitate to contact a member of our employment team - linda.farrell@bristows.com, justin.costley@bristows.com, charlotte.halfweeg@bristows.com or clare.cruise@bristows.com. If you would prefer not to receive Up Close and Personnel in future please employmentpractice@bristows.com with "Unsubscribe UCP" in the subject box. 100 Victoria Embankment London EC4Y 0DH T +44 (0) F +44 (0) info@bristows.com Bristows, see Terms of Use