What's New - Legal Update

Dragonfly Consultancy Ltd v HMRC 

On 3 September 2008 the High Court handed down its decision in the above case, an appeal by a Limited Company Contractor contesting its liability to pay PAYE tax and National Insurance under IR35.  Click here for full case summary. 

Fixed Term Employees (Prevention of Less Favourable Treatment) (Amendment) Regulations 2008

From 27 October 2008, agency workers employed for less than 3 months, will be entitled to claim statutory sick pay for periods of sickness absence.

National Minimum Wage increases - from 1 October 2008

On 5th March, the government announced the annual increase to the minimum wage. The adult rate will rise from £5.52 to £5.73.

The rate for 18-21 year olds will increase from £4.60 to £4.77. The 16-17 year old rate will rise from £3.40 to £3.53.

All increases will take effect on 1st October 2008. See BERR Press Release for more details. 

Employees to get right to request time off for training

The Government has announced plans for the introduction of a right to request time off to undertake training, as part of its draft legislative programme for 2008/09.
The new right will be modelled on the right to request flexible working. Employers will be obliged to consider seriously requests that they receive, but will be able to refuse a request where there is a good business reason for doing so. Employers will not be obliged to meet the salary or training costs to enable a request for time off to train to be met. The Government is to issue a consultation on the details of the proposals.
The Government intends to introduce the right through the Education and Skills Bill, which will also create a national apprenticeship service and provide a statutory entitlement to apprenticeships for all suitably qualified young people.
Read more about the proposals on the right to request time off for training on the News Distribution Services website here.

Employees to get extended rights to request flexible working

The Government has announced that it intends to extend the right to request flexible working to parents of children up to the age of 16. Currently, only parents of children under the age of six or disabled children under 18, and employees with adult dependants, are able to make flexible working requests.
Imelda Walsh, Human Resources Director of Sainsbury's, conducted an independent review in November 2007, of how the right to request flexible working could be extended to parents of older children. The results of that review have now been published. The Government has accepted the review's recommendation that the right be extended to parents of children up to the age of 16. It is due to consult on implementing the proposals.
To read the review please visit the following link:
http://www.berr.gov.uk/files/file46092.pdf

NEW guidance for employers dealing with the transfer of employee information during a transfer of undertaking

The Information Commissioner's Office has published new guidance for employers providing information about employees in the event of a transfer of an undertaking.

Where employees are transferring to another employer under the TUPE rules, the transferor employer is required to provide certain information about those employees to the transferee employer. Both employers must comply with the Data Protection Act 1998 when handling data about employees.  The new guidance is intended to help employers comply with their obligations under the Data Protection Act when information about employees is being provided.

For further information please visit the following links:

http://www.ico.gov.uk/upload/documents/library/data_protection/practical_application/gpn_disclosure_employee_info_tupe_v1.0.pdf

http://www.ico.gov.uk/upload/documents/pressreleases/2008/tupe_guidance_final.pdf

Conduct Regulations amended from 6 April

Budget Hits Recruitment

Value Added Tax concessions to be withdrawn:

The VAT Staff Hire Concession and the Business Brief 10/04 concession allowing “VAT on margin only” will be withdrawn from 1 April 2009.

See the HMRC notice via this link: http://www.hmrc.gov.uk/budget2008/tn-withdrawal-staff-hire.htm

To see our REC News item concerning this, please click here.

Travel Expenses Dispensation to be tightened

HMRC have given notice that it intends to take a more robust approach to the Dispensation for travel costs, often claimed by “umbrella companies”. The rules relating to Employee and Temp Travel expenses are explained in the HMRC Booklet 490 and the latest notice is at this link:
http://www.hmrc.go%20v.uk/employers-bulletin/bulletin28/dispensation.htm 

Overseas tax vehicles under pressure

The Finance Bill will strengthen legislation covering UK residents paid via foreign partnerships comprised of foreign trustees. Agencies which are connected to such arrangements, typically offered from the Isle of Man, will be at risk for unpaid tax under the Tax Avoidance rules. See Budget Note 66 via this link: http://www.hmrc.gov.uk/budget2008/master-notes.pdf

Sexual Harassment redefined

The definition of Sexual Harassment is widened to cover harassment “related to the claimant’s sex or that of another person” rather than harassment “on the grounds of the claimant’s sex”. This means that if A witnesses B sexually harassing C, A could potentially bring a claim for sexual harassment, even if  C does not bring a claim.

Employers liable for 3rd party harassment

Employers will now be liable for sexual harassment by third parties,  eg customers, if they fail to take reasonably practicable steps to prevent it.  There must have been at least two previous occasions when the employee was subjected to harassment, though not necessarily by the same person.

Company Secretaries not required from 6 April

From 6th April 2008 private limited companies will have the option whether or not they have a company secretary. If the company decides to no longer have a secretary after that date it will need to inform Companies House. The directors will remain responsible for carrying out company secretarial duties. Find out more here: http://www.companieshouse.gov.uk/companiesAct/faq.shtml

Corporate Manslaughter and Homicide Act 2007 in force from 6 April

Employment businesses and agencies are potentially criminally liable as they have a relevant duty of care. Health & Safety requirements are unchanged, but it will be important to be able to show that your business has exercised its duties, such as requesting Risk Assessments and advising work-seekers appropriately of risks and control measures. More in our Legal Guide via this link: http://www.rec.uk.com/member-directory/legal/lrg/essential-law/health_safety/qst-15

Legal Reference Guide (LRG) - 1D: Immigration Rules