Annual increases as of April 2018
Termination payment update
For dismissals and termination payments occurring on or after 6th April 2018, payments in lieu of notice (“PILON”) paid on termination of employment will have to be subject to tax and NI. The tax treatment of a PILON no longer depends on whether there is a contractual PILON clause in existence. Employers will therefore have to ensure any part of a termination payment relating to a notice period not worked is treat as earnings and subject to tax and NICs.
Case law update – ‘stand-by’ time
In this case, a Belgian volunteer firefighter who was on ‘stand-by’ had to be contactable and located within 8 minutes of the fire station in the event of an emergency. The European courts decided that the stand-by time was ‘working time’ as the fire fighter had to be physically present at a place determined by the employer and available to work on short notice – it was relevant that the worker could not choose where he could go and what activities he could do as he had to be within 8 minutes of the station. This decision meant the fire fighter was entitled to more pay and also, if time is ‘working time’, it has a knock on impact on rest periods/rest breaks etc.
Case law – agency workers
Where an agency worker has been in the same role continuously for 12 weeks, they are entitled to the “same basic working and employment conditions” as they would have been had they been employed directly. In this case, a Royal Mail agency worker’s paid break was half an hour shorter than permanent employees and they received less annual leave entitlement. They were however paid a higher hourly rate. The EAT found that the higher rate of pay could not be used to offset other less favourable terms and it was confirmed that each term should be looked at individually rather than as a collective package. Royal Mail were therefore in breach of the Agency Workers Regulations.
For more information on any of the above, or to find out how we can help your business, please contact Sarah Furness, or call 0191 232 8345.