Employment Law

Posted by Administrator 09 May 11

Flexible Working

The Government has scrapped plans to extend the right to request flexible working to parents of 17 year olds, as was originally planned for April 2011.  This is one of a range of measures designed to reduce the amount of red tape faced by employers.  The right to request flexible working continues to apply to employees who care for a child under 17 (or 18 is disabled) or a dependent adult.  The Government still intends in the future to extend the right to request flexible working to all employees, regardless of their caring responsibilities.  A consultation paper is due to be published this year to consider this extension.

Additional Paternity Leave

Fathers of babies due on or after 3 April 2011 (and other relevant carers – eg. The mother’s spouse or partner) are now able to take up to six months’ additional paternity leave in addition to the existing entitlement of one or two weeks.  The right also applies to adoptive couples.  To be eligible for the additional leave, the employee must have at least 26 weeks’ service and apart from the mother, expect to have the main responsibility for the child’s upbringing.  It is a condition of the leave that the mother has ended her maternity leave early.  The additional leave will only be paid if it is taken when the mother would otherwise have been entitled to statutory maternity pay or maternity allowance, in which case it will be paid at the statutory rate.

The Government is also considering an even more flexible system of ‘shared parental leave’ which would allow parents to split the leave between them as they see fit, rather than having to take it in back-to-back blocks.  A consultation will take place during 2011 on how the system will work, and it is proposed that any changes would be introduced by 2015.

 Statutory Maternity, Paternity, Adoption and Sick Pay

On 11 April 2011, the lower rate of statutory maternity pay, and the rates of statutory adoption and paternity pay, will increase from £124.88 to £128.73 per week.  Statutory sick pay will increase from £79.15 to £81.60 per week.

Equality and Diversity

Since 6th April 2011, employers are now allowed to discriminate in favour of a candidate in recruitment or promotion, but only when choosing between equally qualified candidates where the aim is to address an imbalance in the workforce – eg. selecting a female over an equally qualified male to join an all male management team. The Government has produced guidance which suggests that, when deciding whether two candidates are “equally qualified”, the employer can take into account their overall ability, competence, professional experience, any relevant formal qualifications and any other qualities required to carry out the job.  In spite of the guidance, few employers will want to rely on this provision.  If the employer gets it wrong, and the two candidates are not equally qualified, the candidate who is rejected because of their sex, race, religion etc, will almost certainly have a discrimination claim.

Childcare Vouchers

The way that tax relief works on employer-provided childcare vouchers was changed on the 6 April 2011.  Previously, the first £55 a week (or £243 a month) of eligible childcare vouchers was exempt from income tax and national insurance contributions for all employees.  Now the value of vouchers which are tax and NICs free will vary according to the employee’s tax rate.  This is designed to even out the tax savings available to all employees.  Employers therefore, need to estimate the employee’s earnings to determine the value of vouchers that can be provided tax-free.  The change only affects people joining an employer’s scheme on or after 6 April 2011 – employees who already participate in an employer scheme as at 5 April 2011 are not affected.  HMRC has published guidance on the changes, including how to estimate the employee’s earnings, which is available atwww.hmrc.gov.uk/thelibrary/esc-qa.htm.

Settlement Payments

The rules on deducting tax for termination payments also changed in April.  From 6 April 2011, employers must deduct tax from post-P45 payments at the employee’s marginal rate (not at basic rate as was previously the case) and on the basis that all allowances have been used.  Employers should ensure that any compromise agreements with payments due on or after 6 April refer to tax being deducted at the applicable rate, rather than basic rate.


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