HR outsourcing and related UK legislation


With the recent rise in the level of new employment legislation, keeping up to date with the changes has become a full-time job, even for experienced HR professionals. By outsourcing HR you are getting access to a pool of expertise that you couldn't afford to employ. As your outsourcing partner our role is to ensure that you are up to date on the changes that affect your business and that your organization is complying with legislation. HR Outsourcing could reduce the 'fear factor' of falling foul of latest legislation as specialists are left to deal with this.

Here are examples of the numerous amounts of legislation that has to be considered whilst performing typical functions carried out by HR departments such as Payroll HR, Health and Safety for employees, employee’s benefits and risk management HR.


Recent changes to UK and European Employment Legislation that effect HR -Examples of Rapidly changing employment related legislation

January 2010
Unfair Dismissal – Maximum Compensatory Award to Decrease
The maximum compensatory award for unfair dismissal decreases from £66,200 to £65,300 where the effective date of termination occurs on or after 1st February 2010. The decrease reflects a reduction of 1.4 per cent in the Retail Prices Index for the 12 month period up to September 2009.

Maternity, Paternity and Adoption Pay Rate to Increase
Standard rates of statutory maternity pay (SMP), paternity pay (SPP) and adoption pay (SAP) will increase from £123.06 to £124.88 per week from 4th April 2010.

Statutory Sick Pay Rate Unchanged

Statutory Sick Pay, which normally increases on or around 6th April each year will not be increased this April. The weekly rate of SSP remains as £79.15 per week.

Under the Work & Families Act, fathers will be able to benefit from up to 26 weeks' additional paternity leave if the mother of the child returns to work before the end of the maternity leave period to which she is entitled. This will be available during the second six months of the child's life and may be paid if taken during the mother's statutory maternity pay period. The Government intends that the legislation will be enforced April 2010 and will apply to parents of babies born from 3rd April 2011.

December 2009
Right to Request Time off for Training to be Introduced
Under the Apprenticeships, Skills, Children & Learning Act 2009,the right to request time off to undertake training, modelled on the right to request flexible working is to be introduced. Employers will be obliged to consider seriously requests that they receive, but will be able to refuse a request where there is a good business reason for doing so. Employers will not be obliged to meet the salary or training costs to enable a request for time off to train to be met. The Government intends to introduce the right to time off to train for employees with 26 weeks’ service in organisations with 250 or more employees in April 2010.

GP Medical Certificates to Change
Under the Social Security (Medical Evidence) and Statutory Sick Pay (Medical Evidence) Amendment Regulations 2010 that come into force in April 2010, the current sick notes used by GPs will be replaced with a 'fit note' system. They change the format of the medical statement to allow doctors to record whether a patient is 'fit' or 'not fit for work' but also include a new option to allow a doctor to indicate where someone may be 'fit for some work now'.


October 2009

Holiday Sickness - Major New Ruling
The European Court of Justice (EJC) has ruled that employees can postpone holiday if they become sick whilst on holiday. The ruling allows employees who are ill immediately before or during a holiday should be allowed to take that holiday later in the year, or carry it forward into the next holiday year if necessary (HMRC v Stringer).


Extension to Paternity Rights to Proceed
In our previous update on this topic we reported that plans to give fathers six months’ paternity leave had been suspended. This has now changed and the Government is now consulting on new Regulations for parents of children due on or after 3 April 2011. Under the planned Regulations


1. Mothers will have the choice to transfer up to six months leave to fathers should they want to, which can be taken by fathers after the mother has returned to work.
2. The new provision will be available during the second six months of a child’s life providing parents the option of dividing a period of paid leave entitlement between them.
3. Some of the leave may be paid if taken during the mother’s 39 week maternity pay period. This would be paid at the same rate as Statutory Maternity Pay (currently £123.06) and;
4. Parents will be required to ‘self certify’ by providing details of their eligibility to their employer.  
Employed fathers are currently entitled to two weeks paid paternity leave and mothers to 52 weeks maternity leave, of which up to 39 weeks are paid. Employed parents are also entitled to a total of 13 weeks unpaid parental leave until the child’s fifth birthday. Parents of children aged 16 and under have the right to request flexible working. These rights will not be affected by the introduction of additional paternity leave.


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September 2009

Childcare Vouchers to Lose National Insurance Exemption

The Government has announced that it will remove the tax and national insurance contribution exemptions for childcare vouchers provided by employers from April 2011. Existing recipients of Childcare vouchers will be unaffected until April 2015 when the exemptions for vouchers will be withdrawn completely.

Tips and the National Minimum Wage

Following a Court of Appeal decision earlier this year, the effect of tips (and other gratuities) when calculating the minimum wage changes ,made on 1st October, means they can no longer be included in this calculation.


August 2009

Extension to Paternity Leave Rights Suspended

Plans to give fathers six months paternity leave have been suspended by the government to help employers during the recession.  Under current legislation, fathers can take either one or two weeks’ paternity leave, providing they meet specified conditions.

Extended Statutory Maternity Pay Suspended 

Plans to extend statutory maternity pay or SMP from 39 to 52 weeks have been suspended as a result of the current recession.


July 2009

Long-term Sickness & Holiday Pay
Following the HM Revenue & Customs v Stringer case, the House of Lords following referral to the European Court of Justice has determined that employees including those on long-term sick leave who have a claim for unpaid annual leave under the Working Time Regulations 1998 are entitled to bring claims before an employment tribunal not only under these Regulations 1998, but also under section 13 of the Employment Rights Act 1996, which provides employees with the right not to have unlawful deductions made from their salaries. The EJC concluded that the right to paid annual leave continues to accrue during sick leave and on termination of the employment relationship, an employee who has been on sick leave and unable to take paid annual leave is entitled to a payment in lieu.


Right to Request Time off Work for Training
A new right to request time off to undertake training is to be introduced which is to be modelled on the current right to request flexible working which will be available to employees that have been continuously employed for at least 26 weeks.
Employees will be able to request any training that will help them to be more productive and effective at work, and help their employer to improve productivity and business performance and will be allowed to make one request in any 12 month period.

Employers will be obliged to consider any requests made but will be able to do so provided there are good business reasons for doing so. There will be no obligation on employer to fund such requests.

June 2009

Redundancy Pay to Increase

In the Budget on 22 April 2009, the Government announced a ‘one off’ increase in the maximum week's pay that can be taken into account when calculating a statutory redundancy payment from £350 to £380. The maximum statutory redundancy payment that an employee can receive will increase from £10,500 to £11,400. This increase is expected to come into force on 1st October 2009.


48 Hour Opt Out to Remain
There has been no agreement on the issue of Britain’s ability to opt out of the 48 hour week.  As a result, employees will be able to continue to work more than 48 hours a week if they choose to do so.

Minimum Wage Rate to Increase
With effect from 1st October 2009, National Minimum Wage Rates increase as follows:
The main adult rate- £5.73 to £5.80 per hour
The rate for 18 to 21 year olds - £4.77 to £4.84
The rate for 16 to 17 year olds - £3.53 to £3.57


Right to request flexible working to be extended
Flexible working request rights are extended in April to all parents of children up to the age of 16 (or disabled children under the age of 18) or who have adult dependents. Employees must have at least 26 weeks' continuous service with their employer to qualify.

Statutory Holiday Entitlement Increases
 The statutory holiday entitlement is increasing again. The holiday entitlement increased to 4.8 weeks from 1st October 2007 and increases to 5.6 weeks from 1st April 2009 (pro rata for part-timers). 


Additional restrictions on appointing foreign workers
From 1st April employers seeking candidates from outside the EU must advertise skilled vacancies (Tier 2 jobs e.g. in engineering, IT and construction) through JobCentre Plus for at least 2 weeks.  Currently, employers must advertise job vacancies in the UK for 2 weeks before advertising overseas.   Employers will receive letters confirming their advert and allowing them to apply for certificates of sponsorship with the UK Borders Agency, enabling them to hire non-EU staff. Employers breaking the new rules could have their licence to employ non-EU migrants revoked and be fined up to £10,000 for each illegal employee.


As from 1st April, Tier 1 highly skilled workers will require a master's degree (previously a Bachelor’s Degree) and receive an annual salary of at least £20,000.   The Tier 3 (temporary shortage areas) has already been suspended.


March 2009
Maternity, Adoption & Paternity Pay Rates to Increase
The amount of Statutory Maternity Pay (SMP) payable to an employee for payment weeks starting on or after Sunday 5th April 2009 is a maximum of 39 weeks as follows:

  • First six weeks of payment - 90% per cent of the employee's Average Weekly Earnings with no upper limit.
  • Up to 33 weeks’ pay at the standard rate which increases from £117.18 to £123.06 a week or at 90% of the employee’s average weekly earnings where the employee is paid less than £123.06 per week. 

The weekly rate of Statutory Paternity Pay (SPP) and Statutory Adoption Pay (SAP) for payments starting on or after 5th April 2009 increases from £117.18 to £123.06 or at 90% of the employee’s average weekly earnings where the employee is paid less than £123.06 per week.

Health & Safety Offences Act 2008
Without much fanfare, The Health & Safety Offences Act 2008 came into force in January which increased penalties and provides courts with greater sentencing powers for individuals infringing health and safety law.  In future, breaches of regulations become criminal matters and the power of lower courts to impose fines increases from £5,000 to £20,000 for health and safety offences.


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