Making Tax Digital – Payroll Services in Bristol, Birmingham, Gloucestershire and London

Making Tax Digital is part of the government’s plans to make it easier for individuals and businesses to get their tax correct.

HMRC’s ambition is to become one of the most digitally advanced tax administrations in the world. Making Tax Digital is making fundamental changes to the way the tax system works – transforming tax administration so that it is:

· more effective

· more efficient

· easier for taxpayers to get their tax correct

Making Tax Digital for VAT

HMRC has taken a major step forward in this ambition with the introduction of Making Tax Digital for VAT.

VAT-registered businesses with a taxable turnover above the VAT threshold are now required to use the Making Tax Digital service to keep records digitally and use software to submit VAT returns for VAT periods that started on or after 1 April 2019.

The exception to this is a small minority of VAT-registered businesses with more complex requirements.

Income Tax

Some businesses and agents are already keeping digital records and providing updates to HMRC as part of a live pilot to test and develop the Making Tax Digital service for Income Tax. If you are a self-employed business or landlord you can voluntarily use software instead of filing a Self-Assessment tax return.

Helping businesses, self-employed people and landlords get it right first time

The majority of customers want to get their tax right but the latest figures show that too many find this hard, with avoidable mistakes costing the Exchequer over £9 billion a year. The improved accuracy that digital records provide, along with the help built into many software products and the fact that information is sent directly to HMRC from the digital records, avoiding transposition errors, will reduce the amount of tax lost to these avoidable errors.

Having listened to concerns about the pace of change, particularly for small businesses, the government has said that the pace would be slowed and that Making Tax Digital will not be mandated for taxes other than VAT until at least April 2020.

The primary legislation for Making Tax Digital relating to VAT and Income Tax is contained in the Finance (No.2) Act 2017, providing certainty about the broad framework in which Making Tax Digital will operate, with secondary legislation for VAT laid in February 2018, coming into force from April 2019.

Smarter experience for individuals

The Personal Tax Account brings together each individual customer’s information in one online place. It allows customers to access the service from a digital device of their choice and at a time that suits them. It allows them to register for new services, update their information and see how much tax they need to pay.

We consider the main principles involved concerning the redundancy of employees including the legal procedures to be followed and statutory redundancy pay.

There have been many changes to employment law and regulations in the last few years. A key area is the freedom or lack of freedom to make in redundancy procedures.

An employee’s employment can be terminated at any time but unless the redundancy is fair an Employment Tribunal may find the employer guilty of unfair dismissal.

We set out below the main principles involved concerning the redundancy of employees. We have written this factsheet in an accessible and understandable way but some of the issues may be very complicated.

Professional advice should be sought before any action is taken.

What is redundancy?

Under the Employment Rights Act 1996, redundancy arises when employees are dismissed because:

· the employer has ceased, or intends to cease to carry on the business for the purposes of which the employee was so employed or

· the employer has ceased, or intends to cease, to carry on the business in the place where the employee was so employed or

· the requirements of the business for employees to carry out work of a particular kind has ceased or diminished or are expected to cease or diminish or

· the requirements of the business for the employees to carry out work of a particular kind, in the place where they were so employed, has ceased or diminished or are expected to cease or diminish. This may occur where the employee, whose job is redundant, is reallocated to another employee’s job for which they have the necessary skills. The employee whose job remains is ‘bumped’ out of a job by the person whose job became redundant.

In other words, the business reasons for redundancy do not relate to an individual but to a position(s) within the business.

Redundancy Consultation – legal requirements

Employers who propose to dismiss as redundant 20 or more employees at one establishment have a statutory duty to consult representatives of any recognised independent trade union, or if no trade union is recognised, other elected representatives of the affected employees.

Consultation should begin in good time and must begin:

· at least 30 days before the first redundancy takes effect if 20 to 99 employees are to be made redundant at one establishment over a period of 90 days or less

· at least 45 days before the first redundancy takes effect if 100 or more employees are to be made redundant at one establishment over a period of 90 days or less.

Employees on a fixed-term contract which come to a natural end will be excluded from collective redundancy. However, where such a contract is being terminated early because of a redundancy situation the exemption will not apply.

Employers also have a statutory duty to notify the Department for Business, Innovation & Skills (BIS) if they propose to make 20 or more workers redundant at one establishment over a period of 90 days or less.

If an employer fails to consult, a Tribunal has discretion to make a protective award of up to 90 days’ pay.

It is good practice in all organisations however, regardless of size and number of employees to be dismissed, for employers to consult with employees or their elected representatives at an early enough stage to allow discussion as to whether the proposed redundancies are necessary at all. Then they should ensure that individuals are made aware of the contents of any agreed redundancy procedures and of the opportunities available for consultation and for making representations. It must be remembered that redundancy is a form of dismissal and although it is not a requirement to follow a disciplinary and dismissal procedure which satisfies the requirements of the ACAS Code of Practice, namely to include a letter setting out the reasons for the potential redundancy, a meeting and an appeal process, it is best practice to do so.

Disclosure of information

Employers have a statutory duty to disclose in writing to the appropriate representatives the following information so they can play a constructive part in the consultation process:

· the reasons for the proposals

· the number and descriptions of employees it is proposed to dismiss as redundant

· the total number of employees of any such description employed at the office in question

· the way in which employees will be selected for redundancy

· how the dismissals will be carried out and over what timescale

· the method of calculating the amount of redundancy payments (other than statutory redundancy pay) to be made.

To ensure that employees are not unfairly selected for redundancy, the selection criteria should be objective, fair and consistent. They should be agreed with employee representatives and an appeals procedure should be established.

Examples of such criteria include attendance and live disciplinary records, experience and capability. The chosen criteria should be measurable and consistently applied. Non–compulsory selection criteria include voluntary redundancy and early retirement, although it is sensible to agree management’s right to decide whether or not such an application is accepted or not.

Employers should also consider whether employees likely to be affected by redundancy could be offered suitable alternative work within the organisation or any associate company.

Employees who are under notice of redundancy and have been continuously employed for more than two years, qualify for a reasonable amount of paid time off to look for another job or to arrange training.

Unfair selection for redundancy

An employee will be deemed to have been unfairly selected for redundancy for the following reasons:

· participation in trade union activities

· carrying out duties as an employee representative for purposes of consultation on redundancies

· taking part in an election of an employee representative

· taking action on health and safety grounds as a designated or recognised health and safety representative

· asserting a statutory employment right

· by reasons of discrimination 

· maternity–related grounds.

The right to a redundancy payment

Employees who have at least two years’ continuous service qualify for a redundancy payment

The redundancy entitlement is as follows:

· For each complete year of service until the age of 21 – half a week’s pay

· For each complete year of service between the ages of 22 and 40 inclusive – one week’s pay

· For each complete year of service over the age of 41 – one and a half weeks’ pay.

The employee is also entitled to a period of notice or payment in lieu of notice by statute and their contract of employment.

How we can help

We will be more than happy to provide you with assistance or any additional information required. Please contact Paybureau Ltd. for more detailed advice on redundancy.

Paybureau operate in Bristol, Birmingham,  Edinburgh,  Reading and Leeds

It is a criminal offence for an employer to employ anyone who does not have an entitlement to work in the UK. We provide an overview of the documentation required to ensure that your business does not fall foul of the law.

In line with the Immigration, Asylum and Nationality Act 2006, it is a criminal offence for an employer to employ anyone who does not have an entitlement to work in the UK, or undertake the type of work you are offering. Any employer who does not comply with the law may face a fine of up to £20,000 per offence. Further, if employers knowingly use illegal migrant labour it could carry a maximum five year prison sentence and/or an unlimited fine.

In addition, since December 2016, section 38 of the Immigration Act 2016 allows immigration officers to close a business for up to 48 hours if there is a reasonable suspicion that an employer is employing foreign workers illegally and they have previously committed specific offences of illegal working. The closure notice might then be cancelled or an illegal working compliance order could be sought, one result of which could be closure of the premises for up to 12 months.

Here we provide an overview of the documentation required by an employer to ensure that your business does not fall foul of the law.

The rules

The increasing trend of illegal immigrants entering the UK has led to a rise in forged documentation, as well as grounds for certain employers to take advantage of cheap labour.

To combat this, the Home Office reviewed the law in this area and regulations were introduced on 1 May 2004.

Documentation requirements

An employer must obtain and retain a certified copy of any one, or combination of the original documents included in List A or List B (Group 1 and 2). Those validated from List A will require no further checks, however, documents provided from List B must be followed up when the document or notice expires.

List A

  • an ID Card or British passport identifying the holder is a British citizen; or
  • an ID Card or European Economic Area (EEA) national passport or national identity card identifying the holder as a national of the EEA or Switzerland; or
  • a registration certificate or document certifying permanent residence issued by the Home Office to a national of an EEA country or Switzerland; or
  • a permanent residence card issued by the Home Office or Border and Immigration Agency to a family member of a national of a EEA country or Switzerland; or
  • a current Biometric Immigration Document (Biometric Residence Permit) issued by the Home Office indicating their right to stay indefinitely in the UK or has no time limit on their stay; or
  • a current passport endorsed to show the holder is exempt from immigration control, is allowed to stay indefinitely in the UK or has no time limit on their stay.

or a combination of the following:

An official document giving the person’s permanent national insurance number and name, plus

  • a current immigration status document issued by the Home Office with an endorsement indicating that the person named in it can stay indefinitely in the UK, or has no time limit on their stay; or
  • a full UK birth certificate or a birth certificate issued in the Channel Islands, the Isle of Man, or Ireland; or
  • a full adoption certificate issued in the UK which includes the name(s) of at least one of the holder’s adoptive parents; or
  • an adoption certificate issued in the Channel Islands, the Isle of Man, or Ireland; or
  • a certificate of registration or naturalisation stating that the holder is a British citizen.

List B Group 1

  • a current passport endorsed to show that the holder is able to stay in the UK and is allowed to do the work in question provided it does not require the issue of a work permit; or
  • a current Biometric Immigration Document issued by the Home Office which indicates that the holder is able to stay in the UK and is allowed to do the work in question; or
  • a current residence card (including an Accession Residence Card or a Derivative Residence Card) issued by the Home Office to a family member of a national of a EEA country or Switzerland; or
  • a current Immigration Status Document issued by the Home Office with an endorsement indicating that the person named in it can stay in the UK and this allows them to do the type of work you are offering when produced in combination with an official document, giving the person’s permanent national insurance number and name issued by a Government agency or previous employer.

List B Group 2

  • A Certificate of Application issued by the Home Office to a family member of a national of a EEA country or Switzerland stating that the holder is permitted to take employment which is less than 6 months old, when produced in combination with a Positive Verification Notice from the Home Office Employer Checking Service; or
  • An Application Registration Card issued by the Home Office stating that the holder is permitted to take employment, when produced in combination with a Positive Verification Notice from the Home Office Employer Checking Service; or
  • A Positive Verification Notice issued by the Home Office Employer Checking Service to the employer or prospective employer, which indicates that the named person may stay in the UK and is permitted to do the work in question.

The points-based system

The Government has introduced a merit-based points system for assessing non-EEA nationals wishing to work in the UK. The system consists of five tiers, each requiring different points. Points will be awarded to reflect the migrant’s ability, experience, age and when appropriate the level of need within the sector the migrant will be working.

The five points-based system tiers consist of:

  1. Tier 1

Highly-valued skilled workers with exceptional talent, for whom no job offer or sponsoring employer is required (for example, doctors, scientists and engineers);

  1. Tier 2

Skilled individuals with a proven English language ability who have a job offer, to fill gaps in the UK labour force (for example, nurses, teachers and engineers);

  1. Tier 3 (currently suspended)

Low skilled workers filling specific temporary labour shortages (for example, construction workers for a particular project);

  1. Tier 4

Students.

  1. Tier 5

Youth mobility and temporary workers (for example, musicians coming to play in a concert).

Sponsorship

Under tier 2, the employer sponsors the individual, who makes a single application at the British Embassy in his or her home country for permission to come to the UK and take up the particular post. The individual’s passport will be endorsed to show that the holder is allowed to stay in the UK (for a limited period) and is allowed to do the type of work in question.

UK based employers wishing to recruit a migrant under tiers 2 or 5: Temporary Workers will have to apply to for a sponsor licence. To gain and retain licences, employers are required to comply with a number of duties, such as appointing individuals to certain defined positions of responsibility, having effective HR systems in place, keeping proper records and informing the UK Visas and Immigration (UKVI) if a foreign national fails to turn up for work.

There is a charge of £1,476 (£536 for charities and for employers with no more than 50 employees) for a licence to sponsor tier 2 migrants. This fee buys a four-year licence.

Once an employer has obtained its sponsorship licence, it can access an online system operated by the UKVI through which it can issue its own certificates of sponsorship to potential migrant workers. The UKVI determines the number of certificates to be allocated to a particular employer. Each certificate of sponsorship takes the form of a unique reference number to be provided by the employer to its potential recruit, who will then be able to apply for entry clearance into the UK at the British Embassy in his or her home country.

The fee for each application for a certificate of sponsorship for a tier 2 worker is £199. Certificates are free for citizens of Croatia, Macedonia and Turkey.

Skilled migrant workers who apply to settle in the UK from April 2016 under the tier 2 general and sportsperson categories of the points-based system are required to earn at least £35,000 (or the appropriate amount for their job, if higher). Employers that do not hold a licence cannot recruit non-EEA workers.

From April 2017 there is an additional immigration skills charge of £1,000 per tier 2 worker per year, or £364 for small businesses and charities.

Identity cards

Identity cards for foreign nationals are currently issued to some categories of foreign nationals from outside the EEA and Switzerland. Other immigration applicants continue to receive a sticker (vignette) in their passport.

With effect from 1st January 2014, EEA nationals from Bulgaria and Romania who wish to work in the UK no longer need an accession worker card or registration certificate.

Since July 2013, EEA nationals from Croatia were able to move and reside freely in any EU State. However, the UK is applying transitional restrictions and as such, Croatians wishing to work in the UK will need to obtain an accession worker authorisation document (permit to work). Before starting employment, employers will need to make document checks to confirm if the Croatian has unrestricted access to the UK labour market as they are exempt from work accession or they hold a valid work authorisation document allowing them to carry out the type of work in question.

If you are licensed to sponsor skilled workers or students from outside the EEA or Switzerland under the points-based system, you can use a migrant’s identity card – which provides evidence of the holder’s nationality, identity and status in the UK – to check their right to work or study here.

Checking procedures

The following checks by employers must also be carried out to ensure that each document also relates to the prospective employee in question:

  • ensure that any photograph and date of birth is consistent with the appearance of the individual
  • if more than one document is produced, ensure that the names on each are identical. Otherwise further explanation and proof will be necessary (for example, a marriage certificate)
  • check expiry dates. Follow-up checks must be conducted on the expiry date. When a Certificate of Application or an Application Registration Card is presented as evidence as right to work, or the employee has no acceptable documents because they have an outstanding application to the Home Office or appeal against an immigration decision, the follow-up verification check is required six months after the date of the initial check
  • carry out ongoing checks on individuals who joined on or after 29 February 2008 and who have been granted only limited leave to remain and work in the UK
  • take copies of original documents only – sign and date to certify
  • before employing an individual who requires a tier 2 visa, be prepared to demonstrate that a recruitment search has been carried out according to the requirements under tier 2 of the points-based system
  • where a recruitment agency is used to recruit an overseas national, ask the agency to prove that it has carried out all the necessary checks on the individual to ensure that he or she has the right to work in the UK.

To ensure that there is no discrimination, it is recommended that all potential employees are asked to produce original documents indicating they have the right to work in the UK.

If you have any doubts as to whether documents are genuine or sufficient to prove an employee’s entitlement to work in the UK you are encouraged to access the Employer Checking Service, which is provided through the Home Office’s Employers’ Helpline: 0300 1234 699, or online service www.gov.uk/employee-immigration-employment-status.

We highlight the main principles involved in the dismissal of employees including some common mistakes that employers make.

There have been many changes to employment law and regulations in the last few years. A key area is the freedom or lack of freedom to dismiss an employee.

An employee’s employment can be terminated at any time but unless the dismissal is fair the employer may be found guilty of unfair dismissal by an Employment Tribunal.

In November 2011, the qualifying period for unfair dismissal increased from one to two years continuous service. However, there is no length of service requirement in relation to ‘automatically unfair grounds’.

We have written this factsheet in an accessible and understandable way but some of the issues may be very complicated.

Professional advice should be sought before any action is taken.

The right to dismiss employees

Reasons for a fair dismissal would include the following matters:

* the person does not have the capability or qualification for the job (this requires the employer to go through consultation and/or disciplinary processes)

* the employee behaves in an inappropriate manner (the company/firm’s policies should refer to what would be unreasonable behaviour and the business must go through disciplinary procedures)

* redundancy, providing there is a genuine business case for making (a) position(s) redundant with no suitable alternative work, there has been adequate consultation and there is no discrimination in who is selected

* the dismissal is the effect of a legal process such as a driver who loses his right to drive (however, the employer is expected to explore other possibilities such as looking for alternative work before dismissing the employee)

* some other substantial reason for dismissal.

Claims for unfair dismissal

Upon completion of the required qualifying period, employees can make a claim to an Employment Tribunal for unfair dismissal within three months of the date of the dismissal and if an employee can prove that he/she has been pressured to resign by the employer he/she has the same right to claim unfair dismissal or constructive dismissal.

In addition to the increase in qualifying period, the government has also introduced plans for details of claims to be submitted to ACAS where the parties will be offered pre-tribunal conciliation before proceeding to a Tribunal. However, there is no obligation of either party to take it up. Since 29 July 2013 the government has introduced fees for claimants bringing tribunal claims.

If the claim proceeds to Tribunal and the employee wins his/her case the Tribunal can choose one of three remedies which are:

* re-instatement which means getting back the old job on the old terms and conditions

* re-engagement which would mean a different job with the same employer

* compensation where the amount can be anything from a relatively small sum to a maximum cap of 12 months’ pay, which will apply where the amount is less than the overall cap. Where the dismissal was due to some form of discrimination the award can be unlimited.

If the dismissal is demonstrated as being due to any of the following it will be deemed to be unfair regardless of the length of service:

* discrimination for age, disability, gender reassignment, race, religion or belief, sex, sexual orientation or marriage and civil partnership

* pregnancy, childbirth or maternity leave

* refusing to opt out of the Working Time Regulations

* disclosing certain kinds of wrong doing in the workplace

* health and safety reasons

* assertion of a statutory right.

Statutory disciplinary procedures

The Employment Act 2008 introduced the ACAS Code of Practice which saw a change to the way employers deal with problems at work. It also saw the removal of ‘automatic unfair dismissal’ related to failure to follow procedures. Tribunals may make an adjustment of up to 25% of any award, where they feel the employer has unreasonably failed to follow the guidance set out in the ACAS Code.

The ACAS Code of Practice sets out the procedures to be followed before an employer dismisses or imposes a significant sanction on an employee such as demotion, loss of seniority or loss of pay.

The ACAS Code does not apply to redundancy or expiry of a fixed term contract.

Standard procedure

1. Employers must set out in writing the reasons why dismissal or disciplinary actions against the employee are being considered. A copy of this must be sent to the employee who must be invited to attend a meeting to discuss the matter, with the right to be accompanied.

2. A meeting must take place giving the employee the opportunity to put forward their case. The employer must make a decision and offer the employee the right to appeal against it.

3. If an employee appeals, you must invite them to a meeting to arrive at a final decision.

There may be some very limited cases where despite the fact that an employer has dismissed an employee immediately without a meeting, an Employment Tribunal will very exceptionally find the dismissal to be fair. This is not explained in the regulations but may apply in cases of serious misconduct leading to dismissal without notice. What this means in practice awaits the test of case law.

Modified procedure

1. Employers firstly set out in writing the grounds for action that has led to the dismissal, the reasons for thinking at the time that the employee was guilty of the alleged misconduct and the employee’s right of appeal against the dismissal.

2. If the employee wishes to appeal against the decision, the employer must invite them to attend a meeting, with the right to be accompanied, following which the employer must inform the employee of their final decision. Where practicable, the appeal meeting should be conducted by a more senior or independent person not involved in the earlier decision to dismiss.

The only occasions where employers are not required to follow the ACAS Code of Practice are as follows:

* they reasonably believe that doing so would result in a significant threat to themselves, any other person, or their or any other person’s property

* they have been subjected to harassment and reasonably believe that doing so would result in further harassment

* because it is not practicable within a reasonable period

* where dismissal is by reason of redundancy or the ending of a fixed term contract

* they dismiss a group of employees but offer to re-engage them on or before termination of their employment

* the business closes down suddenly because of an unforeseen event

* the employee is no longer able to work because they are in breach of legal requirements e.g. to hold a valid work permit.

Common mistakes that employers make

For many the regulations have caused some confusion and practical difficulties. Some of the most common mistakes include:

* not applying the procedures to employees with less than the qualifying period of continuous service for unfair dismissal (ie two years). Whilst such employees are often unable to claim unfair dismissal (unless the reason for their dismissal is one of the automatically unfair reasons for which there is no qualifying period of employment such as pregnancy), they may be able to bring other claims such as discrimination with compensation increased accordingly

* failure to invite employees to disciplinary hearings in writing or supply adequate evidence before the disciplinary hearing. The standard procedure requires the employer to set out the ‘basis of the allegations’ prior to the hearing

* excluding dismissals other than disciplinary dismissals (e.g. ill-health terminations)

* not inviting employees to be accompanied

* not including a right of appeal

* not appreciating the statutory requirement to proceed with each stage of the dismissal procedure without undue delay

* failure to appreciate that an employee may have right to appeal even if it is requested verbally rather than in writing and is after a timescale set down by the employer

* not appreciating that paying an employee a lower bonus for performance related reasons could potentially amount to ‘action short of dismissal’ by the employer

* failure to treat as a grievance any written statement/letter (e.g. a letter of resignation) which raises issues which could form the basis of a tribunal claim to which statutory procedures apply. This means that the employer must be alert to issues being raised in writing even if there is no mention of the word grievance.

How we can help

We will be more than happy to provide you with assistance or any additional information required. Please contact Paybureau Ltd. for more detailed advice on dismissal procedures.

HMRC’s Tax Agent Blog provides a useful reminder of how you can play your part in keeping your data secure online by using a strong password.

Use strong and separate passwords

  • don’t use the same password over multiple systems
  • choose something that’s not easy to guess; such as three random words or a combination of letters and numbers in your password
  • don’t use words or dates that are related to you or your family, e.g. birthdays, children’s names, pets’ names in your password.
  • keep your password private – don’t share it with colleagues
  • immediately change your password if you suspect it has been compromised
  • don’t use a variation of your old password when changing it
  • use two-step verification when available.
  • Change your password on a regular basis.

Beware of misleading websites

Scammers create websites that look similar to HMRC’s official site and then direct the public to call numbers with extortionate costs, instead of the low cost and no cost service HMRC provides. These sites promote non-HMRC premium rate phone numbers as a means of reaching HMRC but are merely call forwarding services, which connect callers to HMRC at a significant price.

Always check GOV.UK for genuine contact numbers.

Beware of phishing emails/texts/calls

  • Recognise the signs – genuine organisations like banks and HMRC will never contact you out of the blue to ask for your PIN, password or bank details
  • Stay safe – don’t give out private information, reply to text messages, download attachments or click on links in emails you weren’t expecting
  • Take action if you think something’s wrong
    • emails – forward to phishing@hmrc.gsi.gov.uk
    • texts – forward to 60599
    • suspicious phone calls – email us at the above address with as much detail as possible – caller number (dial 1471, the number displayed could be spoofed), date of call and a brief description
    • if you have suffered financial loss contact Action Fraud on 0300 123 2040 or use their online fraud reporting tool
    • check GOV.UK for information on how to avoid and report scams and recognise genuine HMRC contact.

Protect your devices

  • always install software and app updates
  • install anti-virus protection and keep it up to date

Employers need to ensure they have the appropriate policies and procedures in place to deal with age discrimination and should raise awareness of it so that acts of discrimination on the grounds of age can be prevented.

The Equality Act 2010 replaces all previous equality legislation, including the Employment Equality (Age) Regulations 2006. The Equality Act covers age, disability, gender reassignment, race, religion or belief, sex, sexual orientation, marriage and civil partnership and pregnancy and maternity. These are now called ‘protected characteristics’.

The Act protects people of any age, however, different treatment because of age is not unlawful if you can demonstrate that it is a proportionate means of meeting a legitimate aim. Age is the only protected characteristic that allows employers to justify direct discrimination.

Employers need to ensure they have the appropriate policies and procedures in place to deal with age discrimination and should raise awareness of it so that acts of discrimination on the grounds of age can be prevented.

Discrimination

Discrimination occurs when someone is treated less favourably than another person because of their protective characteristic. There are four definitions of discrimination:

Direct Discrimination

Treating someone less favourably than another person because of their protective characteristic

Indirect Discrimination

Having a condition, rule, policy or practice in your company that applies to everyone but disadvantages people with a protective characteristic

Associative Discrimination

Directly discriminating against someone because they associate with another person who possesses a protected characteristic

Perceptive Discrimination

Directly discriminating against someone because others think they possess a particular protected characteristic

Examples of Age Discrimination

An example of direct age discrimination would be where someone with all the skills and competencies to undertake a role is not offered the position just because they completed their professional qualification 30 years ago. Other examples could include refusing to hire a 40 year old because of a company’s youthful image, not providing health insurance to the over 50’s, colleagues nicknaming a colleague ‘Gramps’ and not promoting a 25 year old because they may not command respect.

A business requiring applicants for a courier position to have held a driving licence for five years is likely to be guilty of indirect age discrimination. A higher proportion of people aged between 40 and above will have fulfilled this criteria than those aged 25. Other examples of indirect age discrimination could include seeking an ‘energetic employee’, requiring 30 years of experience or asking clerical workers to pass a health test.

An example of perceived discrimination could be where an older man who looks much younger than his years is not allowed to represent his company because the Managing Director thinks he is too young.

However, different treatment because of age is not unlawful if it can be objectively justified and you can demonstrate that it is a proportionate means of meeting a legitimate aim. For example, an employer might argue that it was appropriate and necessary to refuse to recruit people over 60 where there is a long and expensive training period before starting the job. However, cost by itself is not capable of justifying such an action.

Harassment

Harassment on the basis of age is equally unlawful. For example, a mature trainee teacher may be teased and tormented in a school on the grounds of age during the teaching experience. If no action is taken by the head teacher, this may be treated as harassment. An employee may be written off as ‘too slow’ or ‘an old timer’. This too could be seen as harassment.

The Equality Act 2010 covered harassment by a third party, making employers potentially vicariously liable for harassment of their staff by people they don’t employ. However, this has been repealed with effect from October 2013, and employers will no longer have the risk of being held responsible if an external third party harasses an employee. However, employers must continue to take “all reasonable steps” to ensure that employees don’t suffer harassment at work; therefore it is recommended that your harassment policy still states that you show “zero tolerance” towards such behaviour.

Recruitment

Employers must be aware of the significance of the legislation at all stages in the recruitment process and to avoid breaking the age rules they should consider:

  • removing age/date of birth from adverts for example: ‘Trainee Sales Representatives… envisaged age 21-30 years’
  • reviewing application forms to ensure they do not ask for unnecessary information about age, periods and dates
  • avoiding asking for ‘so many years of experience’ in job descriptions and person specifications for example: ‘graduated in the last seven years’
  • avoiding using language that might imply a preference for someone of a certain age, such as ‘mature’, ‘young’, ‘energetic’ or ‘the atmosphere in the office, although demanding, is lively, relaxed and young’
  • ensuring that other visible methods are used to recruit graduates as well as university milk rounds, to avoid limiting opportunities to young graduates
  • focusing on competencies to undertake a role and not making interview notes that refer to age considerations
  • never asking personal questions nor make assumptions about health or physical abilities
  • never ask health related questions before you have offered the individual a job.

Service related benefits

Employers are allowed to use a length of service criterion in pay and non-pay benefits of up to five years’ service. Benefits based on over five years service are also allowed if the benefit reflects a higher level of experience, rewards loyalty or increases or maintains motivation and is applied equally to all employees in similar situations. It is for the employer to demonstrate that the variation in pay/benefits over five years can be objectively justified.

Employers are recommended to review their pay and benefits policies to ensure that they are based on experience, skills and other non-age related criteria.

Redundancy

The existing statutory payment provisions remain in place. Employers can, as before, pay enhanced redundancy payments. However, to avoid discriminating, employers should use the same age brackets and multipliers as used when calculating statutory redundancy pay.

Retirement

The default retirement age and the statutory retirement procedure were abolished from 6th April 2011.

Employers that wish to prescribe a compulsory retirement age may do so only if it is a proportionate means of achieving a legitimate aim.

Action for employers

Employers need to undertake the following to ensure that they are not breaking the law:

  • review equality policies
  • review employee benefits
  • review policies and procedures on retirement
  • undertake equality training covering recruitment, promotion and training.

How we can help

We will be more than happy to provide you with assistance or any additional information required. Please contact Paybureau Ltd. for more detailed advice on age discrimination.