Archive

Our tribunal advocate, George Miller, explains the tribunal trends we’ve seen in the last year (and how to avoid being on the wrong side of a claim).

Poor claims designed to elicit cash

Lack of evidence and bringing every claim under the sun are common. But, tribunals are wise to employees manoeuvring employers into defending claims without the prospect of success. They’re striking out claims and issuing orders for employees to pay money into the tribunal to continue with their claim.

Low value claims 

There’s been an increase in claims for smaller amounts of cash – like holiday and notice pay for example.

A long time for cases to be heard

15 months in some cases for the claim to be heard at tribunal. Tactically lengthy waiting times can take the wind out of an employee’s sails, but often you’re as keen to dispose of the case as they are!

Increase in claims being withdrawn 

We’re increasingly successful in encouraging employees to withdraw their case or settle for low values. It’s still only 10% of cases that ultimately end up going to a full hearing.

Lack of fees make tribunal claims attractive to disgruntled employees, but there’s plenty you can do to avoid one landing…

• Train – great managers to have great conversations
• Talk – nip issues in the bud early to avoid escalation and surprises
• Respect – deliver consistent decisions in accordance with company values
• Culture – drive great behaviours and trust so employees know you’re trying to get it right
• Processes – set, update, and communicate sound processes to support challenging employment issues
• Performance – communicate frequently and follow up often
• Evidence – keep records on a great people system (they’re your first defence)
• Precedents – don’t settle unless you really need to (if you’re known to pay out at the sniff of a claim you can often find plenty more landing your way).

Watch this space for news on when tribunal fees are set to be introduced again (no news yet!).

Disclaimer: what you’re about to read should come with a health warning! Tax is a tricky beast, so we’ve tried our best to make this as straight-talking as our usual updates…don’t say I didn’t warn you!

IR35 states that if you’re working with a self-employed individual in such a way that they’d usually be an employee of yours (were it not for the company under which they operate), then they should be paying PAYE and NICs.

From April 2020, if you pay the individual’s company (rather than the individual directly) for work they’ve done, you may be responsible for PAYE and NIC deductions in respect of their fees (and HMRC penalties if you get it wrong).

From April 2020, if you’re a medium or large company* you’ll need to:

• establish whether, if you disregard the company under which the individual operates, the individual would really be an employee of yours;

• notify the individual and any company supplying them such as a recruitment business of your decision as to their true employment status and your reasons for that decision;

• ensure each layer of the supply chain involved with that individual is aware of your decision as to their status and the reasons for it;

• be clear on your process for resolving a dispute with the individual in respect of their status;

• deduct PAYE and NICs (if you pay the individual through their company) bearing in mind you will be charged interest and penalties by HMRC for failure to do so.

Small steps…

At the moment, we’re waiting for the final draft of the legislation. In the meantime…

• audit your workforce and contracts to identify any individuals who are supplying services through their company;

• use HMRC’s Check Employment Status for Tax to identify the status of individuals you pay through their company;

• discuss with them the changes to the regime and your thoughts on their status;

• consider how you’re going to make the appropriate deductions to HMRC where necessary;

• consider your on-boarding process for suppliers and how you’re going to ensure that deductions are made as appropriate;

• update your consultancy agreements to ensure the appropriate provisions are incorporated to deal with these changes. Click here and we can help you with that!

Watch this space!

*P.s – if you’re wondering, medium and large businesses are those which satisfy two of the following: turnover of more than £10.2m / have a balance sheet of more than £5.1m / have more than 50 employees.

Here’s what you need to know about the next 12 months…

29 March – departure form the EU
• At the moment….EU citizens will retain the right to live and work in the UK until June 2021 beyond which they’ll need to have obtained ‘settled status’.

1 April – wage increase
• The national living wage (the statutory minimum wage for those 25 and over) will increase from £7.83 to £8.21. Click here to see the wage increases for apprentices and those between 16-25.

4 April – gender pay gap report
• The second round of reports will be due for businesses with over 250 employees. Heightened scrutiny is expected – support your report with a robust narrative and metrics.

6 April – itemised pay slips
• For all workers, not just employees.

7 April – new statutory rates
• Statutory sick pay will increase from £92.05 to £94.25 per week. Statutory maternity, paternity, shared parental pay and adoption pay will also increase from £145.18 to £148.68 per week.

Yet to set a date…

May – holiday pay calculations
• The Court of Appeal will decide whether you need to include voluntary overtime in the calculation of holiday pay.

Summer – post-termination restrictions
• The Supreme Court is to hear a case on non-compete post-termination restrictions – a useful reminder hopefully as to their enforceability (or otherwise).

Summer – record keeping
• Subject to the UK’s relationship with the EU we need to start keeping detailed records of all employees’ working time, pending the decision by the European Court of Justice.

Autumn – employment status
• The final case in the long-running Uber battle – are their drivers ‘workers’ or self-employed. The outcome may require a ‘worker status’ audit across your business.

Good Work Plan – April 2020
• A number of changes will take effect – all workers (not just employees) will have the right to an employment contract on day one, those on zero-hours contracts will be able to request for a more stable working pattern, and the reference period for calculating holiday pay will extend to from 12 to 52 weeks.

Tribunal fees
When the Government announces the re-introduction of employment tribunal fees we’ll be sure to let you know!

If you want more information on the above get in touch.