The Employment Appeal Tribunal (EAT) has dismissed an appeal by Dudley Metropolitan Borough Council, ruling that voluntary overtime should be taken into account when calculating holiday pay. This landmark legal victory now means that employers must now incorporate regular voluntary overtime when calculating holiday pay. Unite Union are now advising employers to urgently address this issue and ensure they are compliant.
This ruling will affect a large number of employees throughout the UK who get paid for regular voluntary overtime but do not receive any annual leave entitlement payment for working it. This legal victory sets a legal binding precedent that employment tribunals throughout the UK are obliged to adhere to.
This landmark case involved an appeal that was brought by Dudley Metropolitan Borough Council and this is the first case that the Employment Appeal Tribunal decided to confirm that payments to employees for voluntary duties only should be included in the calculation of employees’ annual leave entitlement pay. In the EAT findings, under the European Union’s Working Time Directive, there is no distinction between contractually required work and tasks that are performed voluntarily under other special or separate arrangements, because levels of normal remuneration have to be maintained when calculating holiday pay in relation to the guaranteed four weeks of annual leave provided under EU law.
The EAT also upheld that where voluntary shifts, standby and call-out payments form part of normal pay, they should be included in holiday pay calculations so that no employee would be deterred from taking annual leave at no financial disadvantage.
The findings in the case of Dudley Metropolitan Borough Council v Mr G. Willetts and others builds on previous findings in the case Unite legal services took in 2014. This appeal resulted in a ruling covering holiday pay for employees that were contractually obliged to perform overtime.
56 employees of Dudley Metropolitan Borough Council, who were Unite members, took the case against Dudley Metropolitan Borough Council. These employees are employed by the Council as tradesmen who worked on maintaining the council’s stock of houses. They worked regular overtime on a voluntary basis only, which included working overtime on Saturdays. In order to deal with emergency call-outs and repairs, the employees decided to organise and a standby rota every four weeks.
For some employees, this additional voluntary overtime equated to approximately £6,000 per annum along with their basic salary. The Council paid the employees the amount due for the voluntary overtime worked, but the voluntary overtime was not included in their holiday pay calculations. The omission of this additional holiday pay was costing the employees between £350 and £1,500 per year, depending on the amount of voluntary overtime undertaken.
Howard Beckett, Unite’s Assistant General Secretary for legal services said:
“The ruling means unscrupulous employers no longer have carte blanche to fix artificially low levels of ‘basic’ hours and then contend the rest of time as ‘voluntary’ overtime that did not have to be paid in respect of annual leave.
Unite will be liaising with Dudley Metropolitan Borough Council and its legal team over reaching a satisfactory settlement for our members. In the meantime we would urge other employers who have been fleecing workers of their holiday pay to get their house in order or face legal action…”.
Based on a new report, Royal London estimates that the number of mothers missing out on vital credits towards their State Pension has more than doubled in the last two years and now stands at around 50,000. The increase has occurred since the introduction in January 2013 of the ‘High Income Child Benefit Tax Charge’.
This rule means that couples where one partner earns more than £60,000 per year have the value of their Child Benefit wiped out by a tax charge. In response to this, growing numbers of mothers starting a family since January 2013 have declined to claim Child Benefit at all. This means however they are missing out on vital National Insurance credits towards their state pension. Each year missed could cost 1/35 of the value of the state pension of around £231 per year or over £4,600 over the course of a typical 20 year retirement. Together, these mothers have lost hundreds of millions of pounds in retirement.
Prior to the 2013 changes, the number of families receiving child benefit had risen every year since 2007. Since then, the number has been falling. HMRC themselves say: “The number of children for whom Child Benefit is being paid is now at its lowest level since HMRC began producing these statistics (in 2003)”.
A woman who started her family in early 2013 and decided not to claim Child Benefit could have missed out on state pension credits for five years so far. The total loss over those five years could be 5/35 of a state pension. This is over £1,000 per year in retirement. Over the course of a twenty year retirement, such women could be more than £20,000 worse off in total. Worse still, as things stand, Child Benefit claims can only be backdated for three months so they will never recover the lost pension rights.
Millions of men and women may have to wait a year longer to receive their state pension after the Government have announced plans to raise the retirement age to 68 earlier than planned.
Under current legislation, the State Pension age increase from 67 to 68 is to be phased in between the years 2044 and 2046. The Government, however, now plan to implement this increase seven years earlier. Should this proposed change go ahead, this means that the State Pension age will thus increase to 68 between 2037 and 2039 instead.
Who will be affected?
Based on the new proposal, men and women born between April 6 1970 and April 5 1978 will be affected. This equates to approximately six million people, who are currently aged between 39 and 47.
No one born before April 5, 1970 will be affected by the change. Currently, those born since April 6 1978 already face a state pension age of 68.
Will these changes go ahead?
At present, this is simply a Government proposal and will therefore need to be approved by Parliament. In response to the new plans, Secretary of State for Work and Pensions, David Gauke said:
“Combined with our pension reforms that are helping more people than ever save into a private pension and reducing pensioner poverty to a near record low, these changes will give people the certainty they need to plan ahead for retirement”.
Auto enrolment has helped more than 8 million people to save into a workplace pension, in order to boost their retirement pot.
BrightPay receives excellent customer satisfaction, provides expert customer support and saves time. Over the last year, we identified key features to improve and make the payroll journey easier, including:
These improvements make BrightPay a progressive payroll product, continually evolving to maximise time saving benefits for customers. Our latest cloud add-on, BrightPay Connect, offers savings of up to 75% to our payroll bureau customers when bulk purchasing multiple BrightPay Connect licences.
HMRC’s Annual Report and Accounts for the tax year 2016-17 revealed the best results for customer service performance. The report sets out HMRC’s latest performance results which includes the collection of £28.9 billion from compliance activities, which exceeded their government target. With total tax revenues of £574.9 billion, this report shows record tax revenues for the seventh year in a row. The Annual Report is available here.
HMRC online services and new improvements have made it easier for customers to obtain information, advice and support. The improvements have also made it easier to process returns which has lead to an increased number of HMRC customers going digital. For example, over 9.4 million HMRC customers accessed their Personal Tax account online and HMRC conducted over 1.6 million web chats.
Customers can still contact HMRC by telephone or post seven days a week. The average call waiting time for customers to get through to HMRC during 2016-17 was approximately 4 minutes. Postal levels are the lowest in recent years.
Regarding renewing tax credits, nearly 2.5 million did so ahead of the deadline of 31st July 2016 and around one million people renewed their tax credits online, an increase of 30% on the previous year.
HMRC’s Charter Annual Report sets out the relationship between HMRC and their customers, what customers can expect from HMRC, and the behaviours HMRC expect from their customers. This helps HMRC strive for their commitment to provide excellent customer service. The Charter Annual Report can be viewed here.
We started out with the idea of automating the payroll backup to a secure location and, while that backup was being stored remotely, to optionally allow employee access to their current and historic payslips.
Then we were asked if we could provide a way for employees to change their personal details and this was followed by a suggestion that maybe the employees could request leave and that the employer, in deciding whether to approve these requests, would be able to view a company wide calendar to see who else was off on the requested dates. BrightPay Connect, an optional cloud add on was born.
More recently, we added the ability to upload documents, for example employment contracts, to the employee portal, so that all such documents would be easily accessible and the employer would also know if and when they had been opened by the employees.
Although it was not our intention starting out, it now appears that we have ended up with a fairly complete HR system suitable for most small businesses and, no doubt, the list of HR features will continue to grow.
As an employer, you can also provide access to your accountant or anyone else you might want to share with. You can also specify different access levels so that, for example, the person approving holiday requests doesn’t get to see how much your employees are paid.
The 2 things that customers really rave about are (1) you are up and running in seconds, as this is all the time it takes to sync all of your employees and (2) you can access your employees’ details from anywhere, from any device.
Book a BrightPay Connect Demo today to see how you and your employees can benefit.
Employers are being made aware of an apparent scam of exemption certificates for automatic enrolment purposes being offered by at least one company. An investigation is being undertaken by The Pension Regulator into this company offering what is described as 'Certificates of Auto Enrolment Exemption' to employers.
Employers were advised by the company when purchasing this fake certificate, that holding it meant that the employer did not have automatic enrolment duties. The cost being charged to employers for this worthless 'Certificate of Auto Enrolment Exemption' is £58. TPR does not have any such documents or accept any such documents as evidence of automatic enrolment exemption.
Any employer who is offered the chance to buy a certificate of exemption or any similar sounding document exempting them from automatic enrolment duties is being urged to decline the offer and contact TPR immediately.
TPR’s Director of Automatic Enrolment, Darren Ryder said:
"Most independent advisers offer legitimate services that assist employers with their workplace pension duties. Nevertheless, employers need to take care when they are seeking help or advice about what they need to do about automatic enrolment. We will work to root out the small number of organisations that are looking to prey on hard-working employers, abusing their trust and tricking them out of their money."
All bureau payroll providers will, by now, be very familiar with how to deal with clients who have had a staging date allocated to them by the Pensions Regulator.
However, this staging process is nearing an end and new employers, who take on staff after 1st October 2017, will have immediate automatic enrolment duties. They will no longer be allocated a staging date by the regulator.
These employers will still be able to postpone for up to three months to allow them the time to choose and set up a pension scheme.
Heretofore, it was essential that any postponement communication was sent to postponed employees within 6 weeks of the staging date. Under the new regime, the staging date will now be referred to as the duties start date. This duties start date will be the date that the first employee started. Any postponement communication will now need to be sent within 6 weeks of the duties start date.
If the first employee is a director, then the company will have no AE duties until such time as a second employee commences. In this case it is the start date of this second employee that becomes the duties start date.
ABC Limited commences trading on 1st December 2017 and has one employee, being a director. On 1st March 2018, ABC Limited takes on a new employee.
The duties start date for ABC Limited is 1st March 2018 and ABC Limited has no AE duties until this date. If ABC Limited decides to postpone, a communication will need to issue on or before 12th April 2018. Assuming that ABC Limited is paying monthly, on 31st March, when it is processing its payroll, it may choose to postpone (for up to 3 months) and issue the communication at the time of doing the March payroll.
If the postponement is for 3 months then, when processing the payroll at 30th June 2018, being completion of the postponement period, all employees must be assessed and enrolled if necessary. The same ongoing duties still apply and, each pay period, all non-enrolled staff should be assessed for age and earnings to see if they need to be enrolled or given the option to enrol.
There are transitional rules for employers taking on their first employer between 2nd April 2017 and 30th September 2017.
BrightPay payroll software will guide the user through the process for new employers.
Previously, subcontractors that are limited companies, that had deductions taken from Construction Industry Scheme payments and need to reclaim these deductions from HMRC, had to write to HMRC or call the HMRC helpline in order to make their claim. Now there is an electronic form available on your HMRC online account that you have to use to submit your claim.
After all year end submissions have been sent to HMRC for the Employer – the final Full Payment Submission and the final Employer Payment Summary – you can complete the online form for your claim. No supporting documentation is required to support your claim.
However please note; if the repayment is to be sent to your agent or a nominee you will not be able to use the online claim form, you will need to send the claim and a signed form R38 to the following address:
National Insurance Contributions and Employer Office
HM Revenue & Customs
If you are using BrightPay you can claim the CIS deductions suffered by entering the amount in the HMRC Payments section and create and send an Employer Payment Summary to HMRC with this amount reclaimable from HMRC. HMRC will update your PAYE online account accordingly.
Please see a link to our online tutorial for CIS in BrightPay - https://www.brightpay.co.uk/tutorials/cis-entering-contractor-and-subcontractor-details/
BrightPay Connect our latest cloud add-on works alongside BrightPay Payroll. Payroll information is stored in the cloud and can be accessed online by you and your clients anywhere. BrightPay Connect offers additional innovative payroll and HR features that will enhance client relationships and increase revenue for your bureau.
Secure online Backup
Don't worry about manually backing up or losing your client payroll data again. Simply link an employer to BrightPay Connect, then the payroll data will be automatically synchronised to the cloud as you run your payroll or make any changes. Payroll files are automatically backed up every 15 minutes when open and again when closed down, offering cloud security against ransomware and cyber attacks. A chronological history of backups will be maintained which can be restored at any time.
Access your online multi-company dashboard which gives an overview of clients’ payroll information in one place. BrightPay Payroll and BrightPay Connect are automatically synced to capture annual leave and changes to employee details.
Client / Employer Access
Invite clients to their own company dashboard where they have online access to an overview of their employer details, employee requests, employee contact details, employee payslips and any outstanding amounts due to HMRC. Payroll reports that have been set up and saved in the payroll are automatically available on BrightPay Connect.
Employee Online Access
Employees can access their own personal self service portal from any computer, tablet or smartphone. They can view and retrieve their historic payslips and other payroll documents such as a P60, P45, or P11d which can be exported to PDF and printed. Employees can easily submit holiday requests, view leave taken and leave remaining as well as amend personal contact details.
Annual Leave Management
Your client can view a company leave calendar allowing them to effectively manage their staffing resources and plan ahead to ensure there is sufficient staff cover at all times. Once an employee requests leave, clients can authorise or reject the request which then flows back to the payroll. Clients will have full visibility of how much leave an employee has taken, the number of annual leave days remaining and how frequently an employee is on sick leave.
BrightPay Connect has built-in features giving your clients a ready-to-go HR solution. HR documents can be uploaded including employee handbooks and contracts, disciplinary documents, company newsletters, training material and more. Clients can also manage all leave for their employees including sick leave, annual leave, maternity leave and paternity leave.
Benefits for Payroll Bureaus
BrightPay Connect introduces powerful new online features that offers a range of benefits for your bureau, your clients and your clients’ employees.
The two things that our bureau customers really rave about are (1) you are up and running in seconds, as this is all the time it takes to sync all of your client data to the cloud and and (2) you, your clients and their employees can access their payroll information from anywhere, from any device.