EMPLOYMENT LAW BULLETIN JAN 10 | Oct 2009 | July 2009 | May 2009 | March 2009 | Dec 2008 | Oct 2008

Employment Act 2008 gains Royal Assent
The Employment Act 2008 which gained Royal Assent on Thursday 13 November, means that a number of reforms will take place in the near future.
Changes outlined in the Act include:
• the scrapping of the three-stage statutory dispute resolution procedures (see below)
• new penalties for underpayment of the national minimum wage — the current maximum fine of £5000 will be removed and unlimited
• fines will be introduced for the most serious cases of non-compliance
• stronger investigative powers for the Employment Agency Standards Inspectorate — the number of inspectors will increase and they
• will be given powers to demand and secure copies of financial information from an agency or from its bank/building society
• the introduction of a measure to enable trade unions to stop people who belong to a particular political party from becoming
• members.

Revised Code of Practice on Discipline and Grievance
Acas's revised Code of Practice on discipline and grievance, that is to replace the statutory dispute resolution procedures from April 2009, has now been approved by the Secretary of State for Business, Enterprise and Regulatory Reform. The Code will provide broad principles on discipline and grievance handling in the workplace and will come into effect on 6 April 2009. It will no longer be necessary to follow the current 3 step process for discipline and grievance issues. The Code will now be put before Parliament for approval.If either party fails to follow the Code, employment tribunals will be able to adjust awards up or down by up to 25%. The new system will give employers greater flexibility to develop systems to suit their own workplace.

Health and Safety Offences Act 2008
This new Act which comes into force on 16 January 2009 amends some aspects of the existing Health and Safety at Work Act 1974.
The new Act sends an important message to those who flout the law, as senior managers and directors who breach health and safety rules could find themselves treated as common criminals. It raises the maximum penalties that can be imposed by lower courts from £5000 to £20,000, increases the range of offences punishable by imprisonment and makes certain offences that are currently triable only in the lower courts, triable in both lower and higher courts.

Points-based Immigration System
From 27th November, employers wishing to bring non-European Economic Area migrants to the UK under tiers 2 and 5 will need to be a licensed sponosr. Tier 2 relates to skilled workers and replaces the current work permit scheme. Tier 5 covers temporary workers entering the UK for a short period. Sponsors will be responsible for issuing certificates of sponsorship to migrants and ensuring that their sponsor obligations are fulfilled. Migrants can then use the certificate of sponsorship to apply for entry clearance. If you have not yet applied for a sponsor's licence and you wish to bring in migrants under tiers 2 and 5, you will need to apply for your licence as soon as possible. If you employ non UK national, you need to familiarise yourself with the new points based system or you could face fines of up to £10,000 per illegal employee.

Pre-Budget Report
Chancellor Alistair Darling confirmed that in order to help the ailing economy, he intended to reduce VAT by 2.5% to 15% — effective from 1 December 2008,until 31 December 2009. To offset the effects of this temporary reduction, the Chancellor intends to increase alcohol and tobacco duties, and to maintain these increases after December 2009.
Rates of income tax for 2009/10 will remain at 20% for basic rate taxpayers and 40% for higher-rate taxpayers (despite much debate over whether the Government would increase the higher-rate tax to 45% — now only set to come in from April 2011 for people earning more than £150,000 a year).
On top of this, people under 65 will retain the £600 increase in the personal allowance — introduced in May to make up for the abolition of the 10p tax rate — and they will also see a further rise in the personal allowance of £130, making it £6475. The Chancellor said that from April 2010, the income tax personal allowance for those earning over £100,000 would be halved. This will end the anomaly of the allowance being worth twice as much to higher-rate taxpayers as it is to those who pay basic-rate tax. Those earning over £140,000 will get no personal allowance at all.
The Pre-Budget Report also announced a rise in National Insurance contributions (NICs) of 0.5% from 2011. The delay in implementing the increase in NI should give employers time to plan tax-efficient ways of offsetting the rise, for instance by offering salary sacrifice arrangements for pension contributions and childcare vouchers.
The Chancellor also announced a five-year freeze on the maximum and annual amount that earners can pay into their pensions while getting tax relief from April 2010. The maximum annual amount will be £255,000 (currently £235,000) and it will be maintained at that amount until 2015/16. The lifetime allowance will also be frozen at £1.8 million for five years.

Time to Reflect
Why not take time now to consider your business's most valuable asset, your staff, and consider whether you are fulfilling your legal obligations to them. Remember, in recent years, the Law has become more supportive to employees rather than employers and staff are now encouraged to challenge, or sue, their employers when things go wrong. Why not take the first positive step in trying to protect yourself and your business, and also the future of your staff, by developing and agreeing contracts of employment. By Law, you have a contract with your staff, even if it is not written down. However, you are actually breaking the Law by not providing a written contract within 8 weeks of an employee commencing work. Rather than rely on hearsay and other people's interpretation of what they think is in the contract, why not produce a legally binding document that confirms all employment details. Give us a ring to see how we can help you now, before you have a problem.
More than 50% percent of UK companies now outsource their business needs, so that they can reduce cost and concentrate on developing their core business. Outsourcing accountancy and personnel issues is becoming more and more popular, as with all the new legislation changes, owners / directors / managers would need to spend a large proportion of senior management time investigating and learning of the new changes, as failure to do so can lead to costly fines or tribunal claims. If you think that Howarth Associates can assist your business in this way, or alternatively if you want any advice about any points in this bulletin, please do not hesitate to contact us on 01772 456554 or by using our contact page. Alternatively, e-mail Jane on jane@howarth-associates.com to arrange a free initial health check on your business.

Disclaimer. The purpose of this briefing is to give a brief introduction to current topical issues on employment law. Although every effort has gone into providing accurate, relevant and up to date information, it must not be relied upon as giving sufficient advice in any specific case. Professional advice should always be taken, before any decision is reached on matters relating to the employment of staff and their rights.