Employment law changes April 2009: what the experts say

Early April sees a raft of new regulations affecting employment law, employers and employees. These include the repeal of the statutory dispute resolution procedures, the debut of the new Acas code and rises in statutory holiday entitlement. We asked employment lawyers to sum up the changes, say what they mean for employers and rate them as to how useful they are for employers.

Rises in statutory sick pay (SSP) from 6 April

  • In a nutshell: SSP rises to £79.15 per week.
  • Actions: Employers who operate a non-contractual sick pay scheme will need to amend their records and any commercial payroll software to reflect this change. In addition, written policies that detail the level of SSP payable will also need to be updated.
  • Concerns: To avoid any HMRC trouble, make sure to pay the amended rate with immediate effect and to record this in all tax documentation. Otherwise your ability to reclaim SSP under the Percentage Threshold Scheme could be affected.
  • Usefulness rating for employers: 2 stars – at a time of reduced turnover and diminishing returns, this increase is unlikely to be welcomed by employers.

Nicholas Siddall, barrister, Kings Chambers (specialising in employment and industrial relations law)

Agency workers entitled to statutory sick pay

The new Acas code applies from 6 April

  • In a nutshell: The revised Acas Code of Practice replaces the statutory dispute resolution procedures and will become the keystone of discipline and grievance matters. The emphasis is on resolving issues in the workplace. It is not legally binding and a failure to follow it will not make any dismissal arising out of a disciplinary matter automatically unfair.
  • Actions: Employers should review their existing discipline and grievance policies and train staff on the impact of the new regime.
  • Concerns: Where there has been an unreasonable failure to follow the code (by employer or employee), a tribunal can adjust any compensation awarded by up to 25% if it considers it just and equitable to do so in all the circumstances.
  • Usefulness rating: 3 stars

Tim Marshall, partner, DLA Piper

Acas code of practice on disciplinary and grievance: What the changes mean for HR

Increased penalties for failure to pay the national minimum wage (NMW) apply from 6 April

  • In a nutshell: Where employers have failed to pay the NMW, they will face a penalty of 50% of the amount of the underpayment, which may be enforced by HMRC, which also gains powers to remove wage records for inspection, and to use search and seize powers when investigating criminal offences relating to the NMW.
  • Actions: Employers should ensure the NMW is paid to all qualifying employees, and that no deductions are made that could take the worker’s average pay below the NMW. Employers should also ensure that accurate records are kept.
  • Concerns: Even though there are only a limited number of NMW compliance officers at HMRC, employers should note that individual employees may still enforce the NMW themselves, by claiming in a court or employment tribunal.
  • Usefulness rating: 0 stars

Robert J Washington, associate, Hogan & Hartson

Government proposes fixed penalty fines for employers paying less than the national minimum wage

Increase in annual statutory holiday entitlement from 1 April

  • In a nutshell: On 1 April, the annual statutory holiday entitlement is due to increase from 4.8 weeks, or 24 days, to a minimum of 5.6 weeks or, for a full-time worker, 28 days – public holidays may be included.
  • Actions: Employers who currently offer fewer than 28 days holiday per year, including public holidays, need to increase employee holiday entitlement or risk employment tribunal claims. For employers whose holiday year does not run 31 March-1 April, an online calculator is available at businesslink.gov.uk to assist calculating pro-rata entitlement.
  • Concerns: The 28 days statutory holiday entitlement may not, after 1 April, be replaced by a payment in lieu, except on termination. Employers need to consider, in particular, the holiday entitlement of part-time workers who may not work on public holidays.
  • Usefulness rating: 2 stars – many employers already give workers 20 days’ holiday, plus bank and public holidays (ie a total of 28 days) and so will be unaffected by the change.

Katie Clarke, partner, McDermott, Will & Emery

Legal Q&A: Statutory holiday changes

Increases to statutory maternity, paternity and adoption pay from 5 April

  • In a nutshell: The prescribed weekly rates of statutory maternity pay, (SMP), statutory paternity pay (SPP), and statutory adoption pay (SAP) will be increased with effect from 5 April. The prescribed weekly rate of SMP, SPP and SAP will be £123.06 (up from £117.18).
  • Actions: Ensure the new rates are paid as appropriate.
  • Concerns: None.
  • Usefulness rating: 2 stars – any increase in staff costs is unwelcome in the current economic climate.

Bob Cordran, partner, Thomas Eggar

Legal Q&A: New maternity regulations

Withdrawal of the VAT Staff Hire Concession from 1 April

  • In a nutshell: From 1 April, the VAT Staff Hire Concession will be withdrawn and businesses supplying temporary staff will no longer be entitled to this concession. Consequently, suppliers of temporary staff will charge VAT (15%) on the full value of the staff supplied. Previously, VAT was charged only on the amount of their fee for supplying the individual and not on the full value of their supplies, including salaries.There are a few exemptions related to the supply of disabled workers and medical and care services.
  • Actions: Unless you are covered by a concession, it will have to be paid – check thoroughly that you have been billed correctly.
  • Concerns: Its withdrawal will affect recipients who are unable to recover any or all of the VAT on supplies of staff, typically those in the financial services, education, healthcare or charities sector.
  • Usefulness rating: 0 stars – The loss of the concession will have a direct impact on absolute costs.

Gwen Souter, head of tax, Maclay Murray & Spens

Budget bombshell as chancellor cuts agency worker VAT concession

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