Autumn Statement and Spending Review: highlights for employers

Autumn Statement and Spending Review: highlights for employers

George Osborne delivered his Autumn Statement and Spending Review this week. Highlights for employment practitioners include:

Further details on Apprenticeship levy: This will be introduced in April 2017 at a rate of 0.5% of an employer’s paybill, with the aim of delivering 3 million new apprenticeships by 2020. Each employer will receive an allowance of £15,000 to offset against their levy payment. The government says this means that businesses with pay bills of less than £3 million will pay no levy at all.

Tax-free childcare scheme: The scheme (offering 30 hours free childcare for 3 and 4 year olds from 2017) will only be available where both parents work at least 16 hours a week and have incomes of less than £100,000.

Further consultation on public sector exit payments: This will be aimed at reducing the cost of redundancy payouts and ensuring greater consistency.

Public sector sickness absence review: To be followed by a consultation on how best to reduce the impact of sickness absence on public service delivery, considering legislation where necessary.

Helping sick and disabled people back to work: The government plans to improve links between health services and employment support to help employees return to work more quickly. It intends to expand the Fit for Work Service and publish a White Paper in 2016 setting out reforms aimed at improving support for people with health conditions and disabilities, and exploring the role of employers in increasing the employment of disabled people.

Taxation of employee benefits: Several measures were announced, including:

  • A call for evidence on the tax treatment of employer provided living accommodation.
  • Legislation to restrict tax relief for travel and subsistence expenses for workers engaged through an employment intermediary (e.g. an umbrella company or a personal services company) with effect from April 2016. 
  • Simplified rules on employee share schemes.
  • Evidence gathering on salary sacrifice arrangements to decide what action, if any, should be taken regarding the growth of such arrangements. +

Collective redundancies – the requirement to inform BIS

A case against three former directors of City Link for failing to notify the Secretary of State of proposed redundancies has collapsed.

The law – Employers planning to dismiss 20 or more staff at one location must notify the Secretary of State for BIS using Form HR1. The amount of notice required depends on the number of proposed dismissals:

  • For 20-99 redundancies in a 90-day period: at least 30 days before the first dismissal.
  • For 100 + redundancies in a 90-day period: at least 45 days before the first dismissal (this was reduced from 90 days on 6 April 2013).

Failure to do so is a criminal offence, with a potentially unlimited fine.  

The case – City Link was placed into administration on 24 December 2014, resulting in the loss of over 2000 jobs. Senior executives were alleged to have been aware the redundancies were inevitable on 22 December, days before the HR1 was lodged by the company administrator.

The three directors were acquitted of the charge, and the judge criticised the government’s use of a ‘retrospective crystal ball’ to prosecute them.  It was ruled that no proposal was made on 22 December 2014 to make redundancies, and that the three defendants had every hope of saving City Link and its workforce by placing the company into administration.

Comment – The comments of the judge are quite surprising, and appear to depart from the statutory test, which says that the obligation to notify arises when redundancies are ‘proposed’ – i.e. when there is a plan likely to result in dismissal (e.g. entering administration). Although the directors have been acquitted in this instance, company officers should take care to ensure they file form HR1 to BIS as soon as redundancies are proposed.

Recruiting transgender staff: new government guide

The Government Equalities Office has published a guide for employers on recruitment and retention of transgender staff.  The guide provides practical advice, suggestions and ideas, and aims to help employers comply with the law. It is also useful for managers of transgender staff and for transgender staff themselves.

View guide