Employment Eye: News round-up

Jodie Sinclair and Laurie Child provide this month’s employment news round-up, including: details of the Government’s new ‘flexible parental leave’ proposals; the latest on the future of the ‘Fair Deal’ pension policy; proposed changes to Agenda for Change contracts; streamlining of dismissal procedures for senior Local Authority executives; and a summary of the new requirements for independent contractors to the NHS.

Harmony in Nappy Valley?

In an attempt to modernise childcare arrangements for working parents, the Government has announced that, from 2015, the UK will have a new system of flexible parental leave. The Government will also extend the right to request flexible working to all employees from 2014.

In summary, the proposals on flexible parental leave are as follows.

• After the mother takes an initial two weeks of maternity leave, up to 50 weeks of leave can be taken as ‘flexible parental leave’, shared between the mother and her partner and taken in one week blocks – they can take the leave either at the same time or they can take turns.
• Flexible parental leave may be taken by either the biological father, or the mother’s partner (whether husband, or partner / civil partner, of either gender).
• Each parent will need to meet the qualifying criteria for leave and/or pay in their own right. Where possible, these qualifying criteria will mirror the criteria for existing entitlements, such as maternity pay and allowance and paternity pay and leave.
• Additional Paternity Leave will be abolished when the new rules come into effect.
• A new right will be created allowing men to take unpaid leave to attend two ante-natal appointments.
• Unpaid parental leave will increase in March 2013 from 13 to 18 weeks.
• From 2015, each parent of a child up to the age of 18 will have a right to up to 18 weeks' unpaid parental leave (parental leave is currently only available to parents with children up the age of 5).
• 52 weeks of maternity leave will remain available for all employed women.
• Fathers will remain entitled to two weeks' paternity leave and pay.

What will happen next?

• A consultation considering the detail of how the new system of flexible parental leave system will work will be launched early in the New Year.
• Legislation is anticipated in 2015.

Although the Government says that its aim is for the scheme to be as simple as possible, the devil will, almost certainly, be in the detail of the legislation, when it is published. All those working to apply the new scheme will await with interest the detailed requirements around, for example, notification, qualification for the benefit and agreement of the pattern of leave between the parents. Until such details are published, active preparation for this change will have to wait. In the meantime, you may wish to familiarise yourself with the broad proposals in the BIS Response on Flexible Parental Leave. This contains a helpful Executive Summary, and diagrams (from page 39 onwards) showing worked examples of how flexible parental leave is intended to work in practice (you may wish to have paracetamol to hand when reading the slightly headache inducing diagrams….).

‘Fair Deal’ update

On 19 November 2012, the Government published its response to its consultation on the future of the Fair Deal policy and, in doing so, took the opportunity to ask some further questions around how Fair Deal should apply to those employees that have already been transferred out under the existing Fair Deal policy.

Where staff are compulsorily transferred out of the public sector to an external provider, the non-statutory policy, ‘A Fair Deal for Staff Pensions’, requires that the new employer provides a broadly comparable pension scheme for the transferred staff. The policy also requires accrued pension rights to be protected, meaning previous employers must provide bulk transfer arrangements for staff transferring their public service pension benefits.

The Government has said that, although the current Fair Deal policy does provide assurance to employees that their pension provision may be maintained, the operation of the policy is confusing and potentially a deterrent to potential private sector providers to the public sector. In line with the Government’s announcements last year, the general proposal is for all transferring employees to be given continued access to their relevant public sector pension scheme, post transfer, rather than having to provide a broadly comparable pension scheme. The consultation also considers issues around second or subsequent generation transfers and, at Annexe A, sets out some draft guidance.

For the background to the current consultation exercise, please see our alert on Fair Deal Pension Guidance .

The response document can be accessed here and responses the to the Government's further questions are requested by 11 February 2013.

NHS: More change on the agenda

The NHS Staff Council has proposed changes to the NHS Terms and Conditions of Service Handbook, relating to staff on Agenda for Change contracts in England, and Trade Unions are now consulting on the proposals. If the proposals are endorsed, they will come into effect from 31 March 2013.

A document summarising the proposals has been published – but (by way of a summary of the summary), the proposals, in brief, are as follows.

• Incremental pay progression dependent on employees meeting required standards (to be determined locally).
• For senior staff, pay progression into the last 2 points in a band dependent on meeting the appropriate local level of performance.
• Greater flexibility to apply alternative pay arrangements for senior posts.
• Removal of accelerated pay progression in 1.8 of the NHS Terms and Conditions of Service Handbook.
• Subject to some exceptions, sick pay will be paid at basic salary level (inclusive of any high cost area supplement but exclusive of other allowances or payments, such as unsocial hours payments).
• Guidance on workforce re-profiling will be included as a new Annexe to the handbook.

The proposals set out above will be enacted by way of amendment to the NHS Terms and Conditions of Service Handbook. Further details and timescales will no doubt emerge in the coming months.

Alongside these national negotiations, several Trusts around the country (whether alone or in local groups) are looking at reviewing staff terms and conditions - including the South West Pay Consortium, to which Bevan Brittan LLP has been appointed as legal advisors. As Julian Hoskins, Employment Partner, was quoted as saying in the Health Service Journal, if the Consortium’s proposals go ahead, they could amount to “the first substantial [split] from the national terms and conditions since they were implemented in 2004”.

Local Authorities: goodbye golden goodbyes

The Communities Secretary, Eric Pickles, has announced plans to change the Local Authorities (Standing Orders) (England) Regulations 2001 so as to remove the need to appoint a designated independent person to investigate proposals for disciplinary action against the Chief Executive, Monitoring Officer or Chief Finance Officer so as to make it easier for local authorities to remove their Chief Executive. Eric Pickles has also written to the Local Government Association, urging them to improve performance management of senior posts. Eric Pickles has also said that he intends to tighten up guidance on pay under the Localism Act, before councils publish their pay policies next year.

Off-payroll contractors – have you got your house in order?

Following publication in May of an HM Treasury review of the tax arrangements for public sector 'off payroll' contractors, new requirements for NHS employers have been circulated by the Department of Health. Arrangements for implementing the recommendations should now be underway: the Treasury will be conducting a compliance check in April 2013 and the Department of Health intends to monitor implementation, before reporting back to the Treasury and Cabinet Office. The key points, of which you need to be aware, are set out below.

What are the recommendations?

• All Board members and senior officials with significant financial responsibility should be on the organisation’s payroll (Recommendation 1). Exceptional circumstances may be approved by the Accounting Officer, but should not last longer than 6 months.
• Where contractors are taken on for 6 months or more and are paid more than a daily rate of £220, they should be required to provide evidence regarding the amount of income tax and National Insurance contributions they are paying (Recommendation 2).
• The employer should also have a contractual right to terminate the contractor’s engagement if that evidence is not provided. NHS employers should be looking to apply these principles to its existing contractor arrangements where possible (Recommendation 4).

What does this mean for me?

According to the Department of Health, NHS employers should now be recording, as a minimum:

• the number of ‘off payroll’ contractors who are paid more than £220 per day and whose engagements are due to last for more than 6 months;
• the number of those contractors who have been asked to provide evidence regarding their income tax/NI contribution payments;
• the number of those contractors who have provided evidence;
• any action taken against those contractors who have not provided evidence.

Are there any penalties?

NHS employers are asked to implement the recommendations as fully as possible and as soon as possible. According to the Department of Health, it is not intended that financial sanctions will be applied to the NHS, but the Treasury review indicated that departmental resource budgets could be reduced to reflect individual instances of non-compliance.

How we can help

We have been speaking to a number of NHS clients who are looking to implement the recommendations, including in relation to:

• advice regarding arrangements for existing contractors, and
• drafting new contractual provisions for fresh contractor engagements.

Please contact the authors of this article, Jodie Sinclair and Laurie Child, if we can help your organisation in this regard.