Executive remuneration
The Business, Energy and Industrial Strategy Committee has just reported on the gap between executive pay, and company performance and employee pay, and found that, although new pay awards have generally been controlled, there are still too many examples of excessive payments being made. The committee concluded that the ‘structure of executive pay has become too dominated by incentive-based elements’ and advocate a ‘simpler structure based on fixed term salary…more aligned to the wider social responsibilities of companies’. It also recommends a ‘tougher, more proactive regulator’, and for pay ratio reporting to include all companies with more than 250 employees. We will continue to monitor and report on the progress of the committee’s recommendations.
More information is available here.
Non-disclosure agreements
The BEIS is also consulting on NDAs to establish views on the drafting of confidentiality clauses in employment contracts with particular reference to their use in covering up workplace harassment and discrimination. The consultation acknowledges that NDAs have a role in employment contracts to protect commercial confidentiality, and in settlement agreements, but that their use should be proportionate and not be misused so as to try and undermine – or hide - workers’ disclosure rights (such as whistleblowing or reporting a crime). The consultation period ends on 29 April.
IR35: Off pay-roll working rules extended to the private sector
HMRC is consulting on how the ‘off pay-roll working’ rules currently in place for the public sector should apply to the private sector with a view to implementation in April 2020, meaning that medium-sized and large employers will be responsible for determining the employment status of their off-payroll workers, and for deducting income tax and NIC, and paying any employers’ NICs. If you employ workers who work via a personal service company or other intermediary, you have until 28 May to add your views to the consultation. In the meantime, it is worthwhile identifying how many workers fall into this category and which will be subject to PAYE and NIC under the new rules, and understand the potential cost to you.
Vento Bands increase
Vento bands, the guidelines that inform financial compensation for ‘injury to feelings’, often applied in discrimination claims, increased on 6 April as follows:
- Lower band: £900 to £8,800 (less serious cases).
- Middle band: £8,800 to £26,300
- Upper band: £26,300 to £44,000 (serious cases, although exceptionally serious cases can go above £44,000).
YEAR: your employment annual retainer
Reduce the time you spend dealing with HR matters, and make sure that you comply with an increasingly complex area of law, by joining our YEAR club. Your annual membership fee covers a range of services from an initial review of your HR documents, email and telephone support, and discounted rates for onsite visits - click here for the complete list. For more information please contact Tina Chander or visit our website:
Case update
Communicating with people on maternity leave
During the course of a restructuring exercise where staff were being redeployed to other parts of the organisation, the claimant, who was on maternity leave, was sent redeployment papers which she was asked to complete and return to human resources as soon as possible.
However, the papers were sent to her work email address which she was not accessing while on maternity leave. She became aware that she was missing something so rang HR and asked them to send the papers to her which they did; she completed and returned them. Shortly afterwards she claimed discrimination on the basis of unfavourable treatment because she was exercising her rights to maternity leave.
The employment tribunal agreed and awarded her £5000 compensation. The NHS Trust appealed. The EAT referred the claim back to the original tribunal on the basis that it had not proved that the sending of the email to the claimant’s work email address was deliberate rather than an administrative error.
This case highlights the need to check the most appropriate channels to communicate with those on maternity leave; without doing so, employers could leave themselves open to discrimination claims if important communications failed to reach the recipients.
As always if you need any guidance on the above, please contact our employment lawyers.
