With effect from 1 January 2008:

Following the recent general increases in the price of fuel, HMRC has again reviewed their advisory fuel rates. These apply where the employer reimburses employees for business travel in their company cars, or requires employees to repay the cost of fuel used for private travel (note that the advisory fuel rates for those who drive their own vehicles on business remain unchanged). These rates were last changed with effect from 1 August 2007, and as from 1 January 2008 will be as follows:

Engine size:

• up to 1400 cc:
  • petrol: 11p
  • diesel: 11p
  • LPG: 7p

• 1401 - 2000 cc:
  • petrol: 13p
  • diesel: 11p
  • LPG: 8p

• over 2000 cc:
  • petrol: 19
  • diesel: 14p
  • LPG: 11p

The rates are calculated using average miles per gallon for the different engine sizes, reduced by 10% to give more realistic fuel consumption figures. The fuel prices used were

• petrol - 102.1p per litre (464.3p per gallon)
• diesel - 106.3p per litre (483.0p per gallon)
• LPG - 50.2 p per litre (228.2p per gallon).

Future changes will be scheduled to take effect twice a year - on 1 January and 1 July.

With effect from 1 February 2008:

The maximum award for unfair dismissal increases to £63,000 (from £60,600) and the cap on weekly pay for redundancy and the basic award increases to £330 (from £310). The maximum basic award and statutory redundancy payment will be £9,900. The new rates apply to dismissals where the effective date of termination is on or after 1 February 2008.

Guarantee payments (for a day on which no work is available) increase to £20.40 (from £19.60).

From 6 April 2008:

Still subject to parliamentary approval, the rate of SSP will increase to £75.40 and SMP, SAP and SPP will increase to £117.18.

Will it live up to its current name? (It will eventually be known as the Employment Act 2008).

This Bill has now been published and received its first reading in the House of Lords. The main points to note are as follows:

• Dispute resolution, ACAS and tribunals:
  • The statutory dispute resolution procedures and related provisions about procedural unfairness in dismissal cases will be abolished. To replace these, ACAS will revise its Code of Practice on Disciplinary and Grievance Procedures and employers will be expected to comply with these. Tribunals will be able to adjust awards by up to 25% (either up or down, depending on who was at fault) where either party has unreasonably failed to follow the Code of Practice. Where a tribunal award would also be increased because the employer has not issued a written statement of terms and conditions, the new adjustment is to be made first.

    The new Code of Practice will apply to almost all of the jurisdictions under which employment tribunal claims are brought. In cases of unfair dismissal, tribunals will revert to the "Polkey" principle - when an employee is dismissed without use of a fair procedure the tribunal will be able to take into account the likelihood of the dismissal having taken place anyway.

  • Changes to ACAS conciliation duties - ACAS will be allowed to prioritise cases where demand for conciliation exceeds their available resources and will not be obliged to conciliate where there is no prospect of success. The fixed periods for conciliation will be removed so that ACAS will be able to conciliate throughout the proceedings until the tribunal delivers a judgement.

  • A new fast-track procedure for settling monetary claims (eg deductions from wages) will be introduced. Cases may be decided without a hearing, on the basis of documentation submitted to the tribunal, provided all parties to the proceedings agree or are given the opportunity to request a hearing.

  • Tribunals will be able to award compensation for financial loss following certain types of monetary claim, such as unlawful deduction from wages or non-payment of redundancy pay. (Typical financial loss would be bank charges or interest payments.)

• National Minimum Wage
  • The method for calculating pay arrears for the national minimum wage (NMW) will be changed so that workers do not lose out as a result of underpayment - they will be paid arrears at the current NMW rate, rather than the rate applicable at the time the arrears arose.

  • The current enforcement and penalty notices will be replaced with a single "notice of underpayment", which will include a civil penalty against employers who have not complied with national minimum wage requirements. The new notice will require the employer to pay the NMW arrears to the worker(s) involved and, in all cases, pay a financial penalty. The penalty will be based on the arrears due rather than the current fixed penalty - 50% of the amount of the arrears due to the worker(s) specified in the notice, subject to a minimum of £100 and a maximum of £5000. The penalty will not take into consideration any underpayments arising before the date the Bill becomes law. The penalty must be paid within 28 days of the notice being served but, if payment is made within 14 days, it is reduced by 50%. The Bill includes appeal procedures and provides for HMRC to withdraw an underpayment notice and, if necessary, to issue a replacement notice.

  • The investigative powers available to enforcing officers will be increased. The Bill gives HMRC officers powers to investigate NMW offences as criminal offences - so they will be able, for example, to apply for production orders and search warrants or to arrest a person suspected of committing an offence. HMRC officers will also be able to remove an employer's pay records in order to copy them and to take copies of all documents without first having to determine whether they are relevant. (Currently they are only allowed to examine and copy records at the employer's premises.) All such documents must be returned to the employer as soon as is reasonably practicable.

  • The maximum penalty for underpayment of the NMW, or employment agency offences, will be increased from £5,000 to an unlimited fine - the most serious cases of non-compliance will be tried in a crown court, which will have the power to impose an effectively unlimited penalty and to disqualify a culpable director.

• Employment Agencies
  • The Employment Agency Standards enforcement regime will be strengthened, including more severe penalties for defaulters and broader investigative powers for the inspectorate who will have greater scope to access financial information to check whether a worker's complaint is an isolated instance or an example of widespread abuse. They will also have a new power to require in writing the provision of records and documents at a specified time and place. Records may be taken away to be copied and returned as soon as is reasonably practicable.

• Trade Unions
  • To ensure compliance with the ruling of the European Court of Human Rights in Aslef v UK, trade unions will be allowed to determine their membership and to expel or ban individuals on grounds of their membership of a political party.

Until all of this becomes law (and there is no commencement date yet although the aim is for Royal Assent by summer 2008 with a phased introduction after that, starting two months after Royal Assent and extending until 6 April 2009) it's business as usual - so do continue to use the statutory dispute resolution procedures and to follow them where they are applicable.

The Government's new points based system for highly skilled foreign workers applying to work in the UK will be phased in over the next year.

There will be five tiers:

1. tier 1 - highest-skilled migrants with good English - can enter without a job offer
2. tier 2 - medium-skilled migrants with good English - must have a job offer
3. tier 3 - low-skilled migrants - cannot enter the UK unless there are specific skills shortages
4. tier 4 - students
5. tier 5 - temporary workers

A statement regarding tier 1, the first (and highest) of five tiers explains this further. The new tier will replace eight existing immigration routes for people who are highly skilled, entrepreneurs, investors or who have undertaken studies to a high level and want to stay in the UK to work. Applicants can calculate how many points they will score for their qualifications, previous earnings, age and UK experience. Most applicants will also need to demonstrate competence in English and that they have sufficient money to maintain themselves. Applicants will need documentary evidence to support their claims but will not need sponsors.

The Home Office has also stated that Tier 3, which covers low skilled workers, will only be used if specific shortages are identified that cannot be filled from the domestic or European labour force.

At the same time as introducing a new system for legal entry, there are new measures to prevent immigrants from working illegally. As from 29 February 2008, employers who negligently hire illegal workers will face a fine of up to £10,000 for each illegal worker found at their business. Employers found to have knowingly hired illegal workers risk an unlimited fine and a prison sentence of up to two years.

Currently there are two lists of acceptable documents from which a worker can provide evidence of his/her right to work in the UK.

List 1 includes a UK passport, an EEA passport or identity card. List 2 includes an official document showing an NI number plus a full birth certificate issued in the UK that includes the names of the holder's parents.

From 29 February, if the worker has indefinite right to work in the UK, he/she must provide a valid document from List A. This will include a passport or national identity card, or a full birth certificate issued in the UK which includes the names(s) of at least one of the holder's parents, along with an official document issued by a government agency or a previous employer giving the person's permanent NI number and name.

Workers who cannot produce the necessary documents from List A, must be asked to produce documents from List B. These only give the temporary right to work in the UK - therefore employers must check the employee's continuing right to work in the UK every 12 months. Employers will need to diarise these checks for every worker with limited leave and ensure they are carried out. If the employee no longer has the right to work here and cannot provide evidence that he/she is in the process of obtaining continued approval to work in the UK, the employer will have to immediately terminate the employment. The new rules will be available on www.bia.homeoffice.gov.uk

Employers who allow people to start working before the necessary checks have been completed could be in trouble! The checks should be carried out for every prospective employee prior to starting work, irrespective of the job or position.

Finally, the Statistics Commission has found that, if the definition of "migrant" includes people who were born abroad but have since become British citizens, then 81% of those filling jobs created in the UK in the last 10 years are migrants.

Attempts to reach European agreement on the proposed Agency Workers Directive, which would give temporary workers full employment rights after just six weeks, failed again last month. In the meantime, the Government proposes to introduce a package of measures to assist those agency workers most likely to be mistreated. The changes will be introduced through amendments to the Conduct of Employment Agencies and Employment Businesses Regulations 2003, which will come into force on 1 April 2008.

The main changes introduced by the draft Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2007 are:

• a work-seeker who takes up "additional services" from an employment agency, such as transport or accommodation, will be able to give five business days' notice (or ten days' notice if the services involve the provision of accommodation) to cancel those services without incurring any detriment or penalty.

• an increase in the protection available to work-seekers where agencies propose to charge fees for the inclusion of information about them in a publication. (This particularly affects agencies in the entertainment sector.)

Also, the regulations aim to ease administration: a business sending someone on an assignment of less than five days' duration is exempt from the requirement to provide detailed information to the hirer and worker. Only certain basic information must now be supplied on these short assignments.

And the uncertainty regarding employment status of agency workers continues! The President of the Employment Tribunals has issued a Practice Direction staying agency worker cases, until the Court of Appeal's judgement in James v London Borough of Greenwich.

The issue of the UK's opt-out from the Working Time Directive was discussed at the same time as the talks on agency workers. The debate on both was postponed once more and will not be back on the agenda until next year. As a result, for now at least, the opt-out, in its current form, is to stay.

Redundancy and mobility clauses

The Court of Appeal has overturned decisions of the Employment Tribunal and EAT and ruled, in Home Office v Evans, that it was not unfair dismissal to require immigration officers who had worked at Waterloo Station in London to relocate to Heathrow, rather than be treated as redundant when their workplace at Waterloo was closed down. The officers' employment contracts included a mobility clause which stated: 'As an immigration officer you can be required to transfer anywhere in the UK or abroad' but there was also a specific redundancy procedure which applied to their employment when a workplace was closed down.

The employees argued that the employer could not simply choose whichever of the mobility clause and the redundancy procedure suited it best. However, the Court of Appeal said that, in such a situation, provided that the employer invokes the mobility clause first, it may choose to do so in order to avoid a redundancy situation altogether. That was what had happened in this case.

How to calculate a day's pay?

Following a strike relating to pension rights in March last year, the Isle of Wight College deducted 1/228th of the annual salary for a day of strike action (they had deducted annual leave and bank holidays in their calculations of working days).

The High Court ruled that when calculating a day's pay, the employer should not include weekends and other non-working days, but must include annual leave and bank holidays - so in this case, the pay should have been calculated on the basis of 1/260 of annual salary, not 1/228. The test case is Cooper v Isle of Wight College.

Equal pay and shift payments

A further stage in a long running claim, and one which we have been watching with interest as it may affect many employers who operate shift patterns with pay enhancements!

In Chief Constable of West Midlands Police v Blackburn and anor, two women police officers brought claims under the Equal Pay Act 1970, arguing that they were being paid less than a male officer doing like work. The male police officer was paid more because he worked shifts involving night work for which he received a special payment (effectively a bonus). The women did not work the same hours because of their childcare responsibilities, therefore they received less than their male comparator doing like work.

The Chief Constable argued that the aim of the special payment scheme was to single out and reward those working nights because of the social, psychological and other stresses that such work creates. The statistics showed that the pay arrangements adversely affected women (because fewer women could work nights) but the court noted that there were many police officers on nights who were female. The onus was on the Chief Constable to show that the scheme was justified as a proportionate means of achieving a legitimate aim. The original tribunal accepted that it was a legitimate objective to reward night work, but then decided the scheme was not proportionate to that aim because it would not have cost very much to pay the women officers the same amount, thereby eliminating the discrimination - even though the women had not actually done any night work!

In what we see as a common sense decision, the EAT upheld the Chief Constable's appeal. Whilst acknowledging that it is highly desirable that employers adopt flexible work practices to accommodate women's childcare responsibilities, the EAT said that it does not follow that they must then pay the women on the basis of the work they would have done if they had not had the childcare responsibilities. They said: 'Nothing in the Act requires an employer to deem that women have done what they have not done. The payment of money to compensate for the economic disadvantages suffered by those who have childcare responsibilities is not what the Equal Pay Act requires. Nor is the assessment of the employer's ability to pay sums of this kind a task which Parliament could conceivably have expected Tribunals to do.'

TUPE may extend to transfers abroad

We're wondering whether all of those transferring their call centres abroad, or those involved in the textile industry will be rethinking their outsourcing in the light of this case!

In the first case to deal with a transfer abroad, (Hollis Metal Industries v GMB), none of the employees were transferred when part of a curtain-making business was transferred from a factory in England to Israel.

The EAT decided that TUPE did potentially apply to transfers outside the UK, although enforcement of any tribunal awards might prove difficult. Such a decision would be in line with the aims of TUPE and they felt that since the business was originally based within the UK, there was sufficient connection with the UK to give jurisdiction to UK courts.

Of course, many of the employees may not have wished to transfer to Israel (on the same terms and conditions as they enjoyed in England!) and without a mobility clause covering such a transfer it may be that they would all have claimed a redundancy payment anyway, but it's certainly an interesting consideration!

We've added a non-executive director's services agreement - this is available to premium subscribers only. See: /docs/ch/explain/nonexec.html

For further details of our new premium service, which enables you to store past copies of our policies and quickly compare and update these, see /intro/premiumservice.html

The New Year is often the time that people decide to change their jobs.

Apparently a fifth (21%) of UK office workers are unhappy in their current job, and more than half (51%) are actively seeking a new job. When looking at moving jobs, 77% of workers find a higher salary the biggest attraction, followed by better benefits (46%), better prospects (42%) and flexible working (41%).

Another survey quoted in the CIPD magazine found that more than half of UK employees searched for a new job whilst at work. One in three had used the telephone at their desk to make enquiries about new jobs, half had used their work computer to search employment websites, and a staggeringly cheeky one in five had actually completed application forms whilst sitting at their desks! Reed Employment have been analysing their online database and found that Monday lunchtime is the peak time for jobseekers to search for a new role, and Tuesday lunchtime is the peak time for job applications!

Read our guide to retention if you're worried! See: /docs/sbs/retention/index.html