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FeRFA Business Shield update

 

 

 

 

 

 

Hello, and welcome to the latest update from FeRFA Business Shield.

Over the last couple of months, the FeRFA Business Shield helpline has received a number of queries regarding ‘notice periods’ and some of the key considerations. So, this month, Stefan Atkinson (HR Consultant at FeRFA Business Shield) talks through some of the points companies should take into account. We will also be updating you on some of the latest training courses available via FeRFA Business Shield. 

I hope you’ll find the information useful and remember, if you have any questions or queries, please do not hesitate to contact me on 07854 938 693 or email barry@skaltd.co.uk.

Barry Nicol, FeRFA Business Shield Account Manager

 

By Stefan Atkinson, FeRFA Business Shield HR Advisor

NOTICE PERIODS

All employment contracts should contain notice periods that the Employer is required to give the Employee and vice versa. Once an individual has been employed for longer than one month, statutory notice is as follows:

•  The employee must give one week’s notice to terminate their employment.

•  The employer must give one week’s notice for each completed year of service up to the maximum of 12 weeks.

Nevertheless, the notice periods stated in a contract can be set to suit the Employer, as long as they meet the minimum statutory requirement. Length of notice periods can vary for numerous reasons, most commonly due to the seniority of the role, the value it has to the Company and/or the time it will take to recruit a replacement.

There are benefits for both parties having notice periods within their contracts:

FOR THE EMPLOYER

A notice period will allow the employer time to find a replacement or implement a continuity plan should a key employee resign, giving comfort and security to the employer.

FOR THE EMPLOYEE

An advantage for the employee is to provide a period of time of continued paid employment, should the employer decide to terminate the employee for whatever reason.

The longer the period agreed in the contract, the longer the employee has to find a new job without being unemployed and therefore unpaid, giving comfort and security to the employee.

PILON Clauses and upcoming changes

Some contracts will be drafted to contain a Payment In lieu of Notice clause. When a PILON clause is present, if an employee has been given notice that their employment is to be terminated, the employer may decide to pay the employee for that notice period without requiring them to work it out.

If there is no PILON clause present in the contract, should an employer not wish the employee to work out their notice period and pay them in lieu, effectively this would be a breach of contract. Currently, the remedy for this is that the payment for the notice period is tax free.

With effect from 6th April 2018 all payments in lieu of notice will be treated as earnings, and therefore subject to tax and class 1 National Insurance Contributions.  This is irrespective of whether there is a PILON clause in the contract of employment.

Contracts can be drafted to state that notice periods can be waived by mutual consent of both parties.

Should you require any assistance drafting Employment Contracts, please do not hesitate to contact a member of the FeRFA Business Shield team on 0345 076 6485 or login to the members area of the website.

 

TRAINING

FeRFA Business Shield is delighted to be able to provide a wide range of Health & Safety and HR training to FeRFA members, whether it be on-site or online courses. Training is an integral part of any good management system, so please click here to see what we can offer and view our upcoming Open Courses training calendar.

Should you require any further advice, or if you would like to discuss some bespoke training, please email our Training Manager, Faye Bevington at faye@skaltd.co.uk

 

 

 

If you’d like to find out more about FeRFA Business Shield or FeRFA Business Shield PLUS, contact Barry Nicol today on 07854 938 693 or email barry@skaltd.co.uk