Tip 1: Don’t get sued for the Christmas party
- Beware of the free bar! UK employers can be liable for employee misconduct at work-related events, including those taking place outside working hours and away from the workplace. This can include harassment or even injuries inflicted on colleagues. Bad behaviour is often fuelled by excessive drinking, and employees may argue the company effectively condoned their behaviour by offering unlimited alcohol.
- Make sure all employees have been given anti-harassment training and know what standard of behaviour is acceptable at work events. Consider a gentle reminder about some basic rules (it doesn’t need to make you sound like The Grinch…)
Tip 2: Avoid IR35 giving you a hangover
- The ‘IR35’ tax rules are set to change next April. From then on, if a contractor personally provides services to you via an intermediary (e.g. a personal service company), you’ll need to assess what their employment tax status would have been if they had been hired directly. If they would have been an employee, then you’ll become responsible for deducting income tax and UK social security (national insurance) contributions from the fees you are paying.
- There is much to do to get ready for the IR35 changes. For example, you’ll need to audit your labour supply chain to identify contractors using intermediaries, decide on your methodology for assessing their status, carry out assessments and review your onboarding process and documentation for contractors going forward.
Tip 3: Add new written statements to your Christmas wish list
- In the UK (and other EU member states), employees are entitled to a written statement of key particulars of their employment. The UK rules are changing in April: statements will need to be provided to those with ‘worker’ status (not just employees), by day one of employment. Importantly, you’ll need to set out more information in the statement, including details of the full benefit and remuneration package.
- You’re likely soon to be recruiting for April 2020 starters, so now is the time to start reviewing and amending your standard onboarding documents.
Tip 4: Don’t leave agency workers out in the cold
- UK rules on agency workers are also changing in April. When the UK first implemented the EU Agency Workers Directive, it enacted the so-called Swedish Derogation (which provides that certain agency workers are not covered by the principle of equal treatment with direct hires). This is being abolished in the UK with effect from April 2020.
- You’ll need to decide what to do about any agency workers on Swedish Derogation contracts and, where appropriate, migrate them onto standard agency contracts or take them on as direct hires.
Tip 5: Wrap up that holiday entitlement
- Is your holiday year coming to an end? Have you reminded employees to use up their annual leave entitlement? UK employers often operate policies restricting the amount of unused holiday that can be carried forward from one holiday year to the next. The current legal position on holiday carry-over is as follows:
If an employee was unable to take their holiday because of maternity leave, they can carry it forward from one holiday year to the next. This applies to the 5.6 weeks statutory holiday entitlement under the UK’s Working Time Regulations (‘WTR’).
If an employee was unable to take their holiday because of sickness, they can also carry it forward. However, this only applies to the four weeks’ holiday provided by the EU Working Time Directive (‘WTD’), not the full 5.6-week WTR entitlement. (This was confirmed by a recent European Court of Justice decision.)
You should take steps to enable employees to use their entitlement within the holiday year. This involves giving employees the opportunity to take their holiday, encouraging them to do so, and warning of the potential for losing it. Otherwise, employees can carry forward any of their four-week entitlement under the WTD which they did not have an effective opportunity to take.
Best wishes for the holiday season from all of us at Lewis Silkin and Ius Laboris!