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April, 2010
Carry forward of holidays when sick
A recent court case allows sick employees to carry holiday forward into a new holiday year
Compulsory pension provision coming soon.....
Details of how government pension rules will affect all employers
In September last year, the European Court decided in the case of a Spanish employee, Mr.Pereda, that an employee is entitled to carry forward annual leave into a new leave year if he has been prevented from taking it in the current holiday year due to ill health. The problem with the Pereda decision for UK employers is that in UK law, under the Working Time Regulations, it is unlawful for employees to carry forward into a new leave year any holiday not used in the previous one. So, after Pereda, it meant that UK employers were potentially breaking the law whether or not they allowed employees to carry the holiday forward! The situation has now become clearer, however, with the decision by a UK employment tribunal in the case of Shah v First West Yorkshire Ltd. Mr Shah had booked a period of annual leave towards the end of his company's leave year, but was then off sick and did not take the leave. He asked to carry the leave forward into the next leave year, but this was refused by his employers in line with the Working Time Regulations. The tribunal decided that since the Pereda case, it is possible to make exceptions to the Working Time Reguations and Mr Shah should have been allowed to carry his holiday forward into a new leave year. Perhaps not surprisingly, the UK Government is now working on a draft amendment to the Working Time Regulations to make the situation a little clearer.....
The Pensions Act 2008 was designed to introduce a number of reforms into occupational pensions. These have been introduced as a result of concerns about employee apathy towards joining company pension schemes. From 2012 onwards, it will no longer be sufficient for employers to simply offer employees the chance to join a scheme. There will be a new system of compulsory enrolment and employees will have to actively opt out if they do not wish to be part of the employer's scheme. There will be minimum contribution levels for both employers and employees. Employers will have to check whether any existing scheme meets the minimum requirements for a workplace pension scheme as set out by the Act.
What are the key implications for employers?
- Introduction of National Employment Savings Trust (NEST), formerly known as Personal Accounts - companies will have to automatically enrol their employees into a NEST scheme unless their own company scheme meets the minimum requirements.
- Compulsory enrolment of all eligble employees - this could significantly increase employers' costs in relation to employers' contributions into the scheme.
- Minimum compulsory employers' contributions of 3% of employee earnings. Employees must contribute a minimum of 4% into the scheme themselves.
- If employees don't want to join, they have to be enrolled and then request to opt out. Employers will then be required to issue a refund of the contributions.
- Automatic re-enrolment at 3 yearly intervals of employees who have opted out - again, regardless of whether they wish to join or not. This has implications for payroll / HR systems, as employers will have to accurately track those employees who opted out to ensure they are picked up again three years later.
When will the changes affect you?
The reforms are being phased in according to company size:
- employers with more than 30,000 employees will have to comply by 2012
- employers with more than 350 employees will have to comply by 2013
- employers with fewer than 350 staff will have to comply between 2014 and 2016.
To discuss in more detail what the changes will mean for your company, contact Picasso HR
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