November's employment law developments, distilled by John Moore and including: the latest developments on the recovery of public sector exit payments, the NHS 'five year forward' plan proposals for partnership with employers, an update on the mass zero-hours claims against Sports Direct, calls for curbs on Council's TU 'facility time' and, finally, details of our forthcoming events.

Recovery of public sector exit payments

HM Treasury has published the government's response to its consultation on the recovery of public sector exit payments. To read the full response, please click here. The government intends to implement its proposals through the Small Business, Enterprise and Employment Bill, which it intends to bring into force no later than April 2016.

In summary, the proposals are as follows.

  • An individual with a salary of £100,000 or more who is made redundant and receives an exit payment will have to repay some or all of that exit payment to the previous employer when that person is engaged by another public sector body within the same sub-sector.
  • The amount of exit payment that must be repaid is determined on a scale, with the full amount being recoverable if the person is engaged within 28 days, up to a maximum of 12 months after their dismissal, after which none of the exit payment is repayable. The proportion of exit payment that may be retained will relate to that individual’s loss of earnings when they were between employments.
  • The amount of the repayment will be reduced if the person returns to a role with lower pensionable pay.
  • The legislation will reflect the issue of individuals who return to work for a public sector organisation, off payroll, for example both as an individual consultant and as an employee of a consultancy firm.
  • A casual work limit of 15 days in a 90-day period will be permitted, which could be waived if justified by value for money reasons.
    The following payments will be subject to repayment.
    • Redundancy payments, both voluntary and compulsory.
    • Voluntary exit payments.
    • Discretionary payments made to buy out actuarial reductions in pensions.
    • Ex gratia payments such as special severance payments.
    • Payments representing the value of fixed term contracts.
    • Payments made to facilitate a dismissal on the grounds of efficiency.

The government intends its proposals to underpin existing exit payment arrangements applicable to certain public sector employees.

The government is also considering how to deal with exit payments that may be protected under the Transfer of Undertakings (Protection of Employment) Regulations 2006.

The old employer will be required to undertake the following.

  • Inform the individual of their obligations as part of an exit payment agreement.
  • Retain sufficient records to allow for calculation of the amount of money due to be repaid, in line with Treasury guidance.
  • Agree repayment arrangements with an ex-employee once informed that the individual intends to return to work in the same sub-sector of the public sector.
  • Inform the new employer where repayment arrangements have been made.
  • Ensure that the exit payment is recovered.
  • Where applicable record in Annual Report and Accounts details of the waiver.

The new employer will be required to undertake the following.

  • Conduct pre-appointment checks, re-informing the individual of their obligation.
  • Delay engagement until after confirmation from the old employer that arrangements for repayment have been made.
  • Inform the old employer of the planned date the individual is to be engaged from.
  • Provide details of the individual’s new salary for calculation purposes.

The individual responsible for a waiver will be obliged to retain records of the waiver and justifications.

NHS Five Year Forward View recommends new partnerships with employers

The proposals made by NHS England's Chief Executive, Simon Stevens, in the Five Year Forward View for the NHS include new partnerships with employers. As part of the focus on prevention rather than cure, it is proposed that the NHS will develop and support new workplace initiatives to promote employee health and cut sickness-related unemployment. The report sees merit in extending incentives for employers in England who provide workplace health programmes recommended for employees by the National Institute for Clinical Excellence.

Zero-hours contracts – Sports Direct case settles

It has been reported that the group employment tribunal claim by 200 zero-hour workers against Sports Direct, has now settled. We understand that, as part of the settlement, Sports Direct has agreed to rewrite contracts relating to zero-hours staff and amend its job advertisements and employment contracts, to make it clear that zero-hours staff are not guaranteed work. No later than 25 February 2015, the retailer is also required to produce clear policies on sick pay and paid holiday for zero hours staff and display the policies in all staff rooms. Sports Direct must also send copies of its equal opportunities policy to all store managers and assistant managers with a written reminder that the policy and principles apply to zero hours staff. Sports Direct has reached this settlement without any admission of liability. The claims originally launched against by Sports Direct focussed on their alleged failure to offer equal benefits to employees on zero-hours contracts and discrimination against casual workers.

Councils – transparency on TU 'facility time'

Following publication of the revised Local Government Transparency Code in May 2014, the government has confirmed that local authorities must disclose the level of their expenditure on subsidising staff who are taking paid time off as trade union officials, or carrying out union work (known as "trade union facility time").

The new code requires councils to publish full details of the total number of their staff who are union officials and the numbers who spend at least half their working week on union business. An estimate of the total amount spent on subsidising union work will also be published.

According to the government press release the intention behind the requirement for transparency is to curb the amount of paid leave provided for trade union work. However, any reduction to such leave will be subject to the statutory right for trade union representatives to take reasonable paid time off to carry out trade union duties, under the Trade Union and Labour Relations (Consolidation) Act 1992.

Bevan Brittan's Workforce Forum

Our next Workforce Forum will take place at 6pm on Tuesday 13 January 2014 at our London office, on the topic of "making it work – dealing with a dysfunctional Senior Team". Our speakers will include Simon Devonshire QC, who will be looking at some of the leading cases of dismissals for “some other substantial reason” which is often used as the most appropriate course of action for terminating the employment of members of senior teams.

Our Workforce Forum is an interactive employment discussion forum for Directors of Human Resources and Organisational Development, focusing on strategic workforce issues and are by invitation only. If you would like more information please contact Jodie Sinclair.

Bevan Brittan client training – December 2014

Our ever popular annual review of employment developments, and preview of what is coming up, is taking place across our three offices in December. There are still some places available, so please click here for further details and to register.

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