April 2017
Trade Union Act 2016
The key provisions of the Trade Union Act 2016 came into force on 1st March 2017. The requirements introduced include:
· At least 50% of those members entitled to vote in a ballot for industrial action do so;
· Additionally, in key public services (including education of children under 17 in publicly funded schools and FE colleges) at least 40% of those entitled to vote support the action – this covers teachers and headteachers/principals but not support staff;
· The minimum notice period for taking industrial action increases to 14 days (unless the parties mutually agree to 7 days);
· A limit to the industrial action mandate of 6 months after the ballot or 9 months if both parties agree,
· Unions must appoint a union official who is ‘familiar’ with the statutory code of practice on picketing to supervise the picket (plus some linked changes to picketing rules).
Restrictions on check-off arrangements in the public sector are still pending. Plans for the removal of restrictions on the use of agency workers to cover during strike action have been abandoned.
Schools’ New Responsibilities for Self-employed and some Agency Workers
From 6 April 2017, schools and academies will need to assess the status of anyone working for them who operates on a self-employed basis through their own company, known as ‘an intermediary’. This includes self-employed individuals supplied through a third-party agency. Specialist advisers, consultants or supply teachers may fall in to this category if they normally submit invoices for payment or are hired by the school through an agency. Office holders such as Clerks to Governing Bodies may also be included. This won’t apply to workers directly employed by an agency where it operates PAYE and NICs on the earnings it pays to the worker.
The intermediaries’ legislation, often referred to as IR35, already exists to ensure that individuals who work through their own company pay employment taxes in a similar way to employees. The new law, means schools will be responsible for assessing the status of these individuals to decide if tax and national insurance is payable under the IR35 rules. Currently the individual and their company is responsible for making this decision.
Where the school decides that the IR35 rule applies, the school, or the agency/third party paying the individual, will be responsible for deducting and paying the tax and National Insurance Contributions (NICs) and for paying the employer NICs of 13.8%.
A new Employment Status online tool has been provided by HMRC to help people decide whether the rules apply and is available here. More information from the HMRC on these changes can befound here.
You will need to identify anyone that is working for your school that may fall in to this category. These workers will not become contracted employees and occupational pensions, statutory payments and certain other employment rights will not apply.
More details are attached in the Simple Guide at the end of this newsletter.
Apprenticeship Levy
As you will be aware, in April 2017, the way the government funds apprenticeships in England is changing. All employers with a pay bill of over £3 million will be required to contribute to a newApprenticeship Levy.The Levy requires employers to make an investment of 0.5 per cent of their annual pay bill into apprenticeships.
Maintained schools
Liability for the Levy depends on the type of maintained school - there are two categories:
· Community and Voluntary Controlled (VC) schools. In these schools the local authority (LA) is the employer and therefore all employees in Community and VC schools are added on to the paybill of the LA, with the levy equivalent to 0.5 per cent of the overall paybill for the LA. In short, the paybill for all Community and VC schools will need to be included in the LA Levy calculation, regardless of whether the school uses the LA for its payroll.
· Voluntary Aided (VA) and foundation schools. In these schools (as in academies) the governing body is the employer, rather than the LA. Therefore, each VA and foundation school’s liability for the levy will be based on its own paybill.
In practice, the LA is likely to administer the payroll for many VA and foundation schools, and the school may not have its own separate HMRC payroll reference number. HMRC has stated that only VA and foundation schools with a paybill of over £3 million need to set up a new HMRC payroll reference number. Those VA and foundation schools with paybills under £3 million, with the same payroll reference number as the LA, do not have to set up a separate payroll reference number.
If your school’s payroll is not provided by your LA, you need to liaise with your payroll provider and LA to ensure the correct payment is made. VA and foundation schools will have to calculate your own liability and make arrangements.
Funding the extra cost of the levy
Community and VC schools will have to make provision for the relevant cost of the levy in their individual budgets, in the same way as other payroll costs like National Insurance. The Department for Education (DfE) does not intend to allow the Schools Budget to be ‘top-sliced’ by the LA for the levy, and the operational guidance for schools revenue funding in 2017-18 does not make any provision for Dedicated Schools Grant (DSG) to be top-sliced in this way. As a result, all community and VC schools (and VA and foundation schools with payrolls over £3m) will need to ensure they have taken account of this additional cost in their budgets for 2017-18.
Non-maintained schools paying the levy: Using the levy to fund apprenticeship training
An employer’s Levy payment will be converted into digital vouchers, to be held in a digital account. Government has stated that these digital vouchers can only be used for training and assessment and cannot be used on other costs associated with apprentices, including the apprentice’s salary, statutory licences to practice, travel, subsistence or costs associated with establishment and management of the apprenticeship programme.
Non-levy paying schools: Support with apprenticeship costs
Non-levy paying employers will share the cost of training and assessing their apprentices with government - this is called ‘co-investment’. From May 2017, you will pay 10% towards the cost of any apprenticeship training and government will pay the rest (90%), up to thefunding band maximum. However, you won’t be able to use the apprenticeship service to pay for apprenticeship training and assessment until at least 2018. Instead, you will need to agree a payment schedule with the provider and pay them directly for the training.
Types of Apprenticeships
There are 2 different types of apprenticeships to choose from:
· apprenticeship standards- each standard covers a specific occupation (including “Early Years Educator”) and sets out the core skills, knowledge and behaviours an apprentice will need; they are developed by employer groups known as‘trailblazers’
· apprenticeship frameworks- work-related vocational and professional qualifications, with workplace and classroom-based training (including “Education Learning Mentor”)
To choose training:
· use the‘Find apprenticeship training’service to select an approved training provider
· if you are using a standard, use theregister of apprenticeship assessment organisationsto select an approved assessment organisation.
You will need to followPublic Contracts Regulation 2015when selecting a training provider.
Fluency Duty
Schools have a legal duty to ensure that employees who have contact with members of the public speak English to a standard which is sufficient to enable the effective performance of their role. Find out more about the Fluency Duty, and our expected code of practice,here.
Migrant Workers:Tier 2 Changes from April 2017
Tier 2 Minimum Salary
The minimum salary threshold for experienced migrant workers under Tier 2 of the points-based immigration system increases to £30,000 from £25,000 in April 2017. It remains the case that secondary maths, physics, chemistry, computer science and Mandarin teachers are exempt from the minimum salary threshold until July 2019.
Shortage Occupational List
For jobs on the shortage occupation list, employers do not have to pass the resident labour market test or meet the £35,000 minimum salary requirement for permanent settlement and are given priority in the allocation of certificates of sponsorship if the quota on Tier 2 (General) is met. Currently secondary maths, physics and chemistry teachers are on the shortage occupation list. However, chemistry teachers will be removed from the list and secondary computer science, Mandarin and combined science teachers added.
Immigration Skills Charge
An Immigration Skills Charge will apply from 6 April 2017 when sponsoring a worker from outside the EU. The skills charge applies to a sponsor of a Tier 2 worker assigned a certificate of sponsorship in the ‘General’ or ‘Intra-company Transfer’ route and who will be applying from:
· outside the UK for a visa
· inside the UK to switch to this visa from another
· inside the UK to extend their existing visa
The skills charge does not apply if you are sponsoring:
· a non-EEA national who was sponsored in Tier 2 before 6 April 2017 and is applying from inside the UK to extend their Tier 2 stay with either the same sponsor or a different sponsor
· a Tier 2 (Intra-company Transfer) Graduate Trainee
· a worker to do a specified PhD level occupation
· a Tier 4 student visa holder in the UK switching to a Tier 2 (General) visa
You do not have to pay the skills charge for the worker’s family members. The skills charge will be £1000 per year for medium or large sponsors and £364 per year for small or charitable sponsors. It will be payable upfront and for the total period of time covered by the certificate of sponsorship.
Overseas Criminal Record Certificate Requirement
From April, the requirement to provide a criminal record certificate is extended to Tier 2 visa applicants coming to work in specific sectors, including education. Applicants subject to this requirement will need to submit a criminal record certificate from each country in which they have resided continuously or cumulatively for 12 months or more in the 10 years before making their application. Their adult dependants will also be subject to this requirement.
Green Book
The NJC National Agreement ‘Green Book' has been thoroughly updated. It includes the full, current details of the National Joint Council (NJC) for local government services. Known as the Single Status Agreement, theGreen Bookcovers the pay and conditions for 1.4 million local authority employees, ranging from architects to cleaners and lawyers to school meals staff.
The updated ‘Green Book’ now includes: · All payscales and allowances from 1997 to 2017 inclusive · The revised maternity scheme (as notified previously in NJC Circular 5/07 dated 16 November 2007) · The increase in the minimum annual leave entitlement from 20 to 21 days (as notified previously in NJC Circular 2/09 dated 10 September 2009) · The updated NJC Job Evaluation scheme guidance. It can be accessed here.
As part of the last NJC pay negotiations (Green Book terms and conditions)it was agreed that two working groups would be set up: one is tasked with reviewing the national pay spine, the secondwill belooking at term time working. The terms of reference for the latter have now been published. The reviewwill look at pay calculation methods, approaches to annual leave, TOIL, family leave, sick pay and school closures as well as how TTO arrangements compare to teachers. It’s not yet clear how the outcome of the review will be implemented, though it looks more likely thatjointly agreed adviceis the aim. The hope is to conclude the review by the end of June 2017.
School Teachers’ Pay
The remit to the School Teachers’ Review Body (STRB) for 2017 is similar to recent years. The pay award will be limited to an average of 1% and so the role of the STRB is simply to determine how this should be applied to the salary and allowance ranges. There are no additional matters for the STRB to consider this year.
The STRB is expected to report back to the Secretary of State by “early April 2017” though as there is usually a delay before the DfE publishes the outcome it is more likely to be May before we hear more about the recommendations and the government’s response to these.
Further help
If you have any HR issues and would like advice,
please contact your HR Business Partner, Tim Barnett
on 01865 208763or 07392 196095or email:
Simple Guides for Busy People:
Employed, or self-employed? That, is the question
The area of employment versus self-employment has always been complicated. In employment terms there is a category called “Worker” and these now receive some employment rights. For an explanation of the different types of Worker in employment law, see this ACAS page. We will focus here on the tax and NI position. As far as HMRC are concerned the only two categories are employee (so you pay their tax and NI) and self-employed (who must pay these themselves).
Generally, Selfemployed workers are used for:
· Work with a definite start and finish or an end product such as a report or survey
· Work that requires specialist knowledge or skills
· Where work could not be undertaken by an employee because of the nature of the work
Why does this matter now?
As from April 2017, changes to the rules around off-payroll workers in the public sector will impose significant additional burdens on schools and Academies which employ staff via intermediaries. The supply of straightforward agency workers from an employment business will not be affected. But any other relationships where the school/Trust does not contract directly with the individual providing the services may be.
Historically the off-payroll working model was typically:
· A body (“the employer”) wanted to engage the services of an individual (“the contractor”)
· The employer would enter into a contract with an intermediary (generally a limited company owned by the individual), under which the intermediary would agree to supply the individual to the employer.