What are the changes that IR35 will make?

What are the changes that IR35 will make?

We are very honoured to have Emma Spandrzyk of Keelys Solicitors share this guest blog with us. Her piece addresses some of the key insights many of you will have been thinking about when it comes to IR35.

I have recently joined Keelys in the employment department.  I have been working as an employment solicitor for 9 years and, most recently, I have worked in-house for the police.

Some of our clients have been asking us about changes to the law on IR35 next year so we’ve taken some time to explain some of what is happening.

What is the current position?

If someone works on a self-employed basis but, in reality, they are an employee, HMRC can recover the underpaid tax and national insurance from the organisation that they work for.

Sometimes, the individual will set up their own personal service company to provide their services.  If HMRC decides that the arrangement is a sham and that, if the individual was engaged directly by the client, they would be an employee, HMRC can recover the underpaid tax and national insurance under IR35.  Currently, that is recoverable from the individual and/or their company rather than from the end-user.  The exception to that is in the public sector, where the end-user will be liable for the tax and national insurance.

What is changing?

From April 2020 businesses with more than 50 employees or a turnover of more than £10.2m will be affected by the new rules.  They will, therefore, be liable for tax and national insurance if they are found to be engaging people through personal service companies who, in reality, ‘are’ employees.  If your business is smaller than that, you do not need to worry although we would not be surprised if, in future, these rules apply to smaller companies as well.

How to tell if someone falls within IR35?

If you are a larger business who will be covered by the new rules, the first step is to identify the contractors that provide their services through personal service companies.

To assess whether contractors fall within IR35, businesses will need to look at a range of criteria including the following:

  • Control – how much autonomy does the contractor have in terms of how they deliver their work? If the business retains full control over how, when and where tasks are completed, this is indicative of employee status and the contractor is likely to be caught by IR35. If the contractor has full autonomy over the completion of tasks, they are more likely to fall outside the scope of IR35.
  • Personal Service – does the contractor have to undertake the work themselves? The ability to send a substitute helps point towards a contractor being genuinely self-employed and outside the IR35 rules.
  • Mutual Obligation – is there a requirement for both parties to continue to offer and accept work? If the business has an obligation to provide work and there is an expectation that the contractor accepts it, then this will indicate that the contractor is caught by IR35.

As part of the assessment, businesses should also consider factors such as the degree of integration that the contractor has with the business, the level of financial risk they assume and who provides the contractor’s work equipment.

What does this mean for your business?

Businesses will need to show HMRC that they have taken reasonable care in undertaking their contractor assessments. When reviewing assessments, HMRC will look at the size of the business. The bigger the business and the greater the resources available to it, the more effort HMRC will expect in relation to the process.

There is a useful tool on the HMRC website that you can use to assess whether someone is genuinely self-employed or should be treated as an employee: https://www.gov.uk/guidance/check-employment-status-for-tax

Please let me know if you would like further advice on this, which will be covered under your subscription to our Employment Healthcheck Plan.  You may also want to speak to your accountant for advice on whether you are taxing staff appropriately.

 

HR Planning for the Year Ahead

HR Planning for the Year Ahead

Successful businesses rely on having the right number of people with the right skills to bring in the business, do the work and make money. At the same time, employing people also means ticking all those employment law boxes. Combining your legal obligations with where your business is heading is the key to great HR planning. As we reveal in this blog.

Factor in Legal, Tax and Fiscal Changes in Your HR Planning

When planning ahead you need to be clear about the immovable objects – the legal changes you must tackle and include in your planning. Employment law, tax and statutory payment changes tend to be introduced around April at the start of the new tax year. 

Rates – like statutory maternity pay, tax thresholds, national minimum wage and statutory sick pay – are amended and will need to be factored into your budgets and processes. You can find this information on the government’s website which is updated each year.

It’s also worth being in the know about employment law changes in advance so you have plenty of time to prepare. Typically, updates will have a long lead-in time so you have plenty of time to prepare. Keep an eye on HR industry blogs, like this one, for details about new rules your company will need to abide by. Then factor them into your HR plans.

Be Clear on Where the Business is Heading 

With your legal obligations clearly mapped out, it’s time to turn your attention to your business’ goals. They will provide the context for your HR plans. For example:

  • Business growth – could mean new roles, redistributing work between individuals, increasing people’s hours, upping overtime or taking on additional headcount
  • Business slow down – stagnant GDP growth might mean your business needs to tighten its belt. Perhaps you need to reduce headcount or ask your staff to increase productivity. However you decide to do more with less it will impact your HR strategy.
  • Business stasis – if your business is neither growing or shrinking, there’s still a lot you can do. Tightening up on people processes, developing your team to ensure you future-proof your business and finding ways to positively impact the bottom line are all possible with good HR planning.  

Anticipating your future HR needs should also look beyond your immediate situation and be based around economic and technological changes as well as what your customers will need in one, three and five years’ time. 

With your legal and business priorities clear, you can now identify your HR priorities. You might decide to go for some quick wins first or tackle those issues that are causing you the most pain. 

Alternatively, complete tasks that will add to the bottom line: this should create additional revenue that could be fed back into the business. Reinvesting in your people is one option that frequently drives even better business results.

Choose the Right HR Strategies, Systems and Providers

With a solid understanding of your current and future people needs, you can start choosing which areas of HR to dedicate the most time and resources to. If you anticipate significant talent gaps, training, recruitment and performance management strategies should help. Or, if your business is facing a tough time, a restructuring programme could be the key.

Getting this right is critical to the health of your business so if you don’t have sufficient HR support, it’s worth investing in an experienced HR consultant to provide expert advice and practical help. 

Part of your HR planning should include a review of the systems you have in place to support your plans. There’s a wide range of HR technology available that: 

  • Makes it more efficient to administer your human resources
  • Provides options for employees and managers to process standard requests like holidays
  • Keeps track of employee data and gives you insight into your workforce with online reports

So, if spreadsheets aren’t cutting it any more, it could be time to consider going digital with your workforce administration.

Communicate Your HR Planning

Once you’ve firmed up your plans and put timescales, resource and budget to your changes, it’s time to communicate with your team. Start with leaders first to get their feedback and input if you’ve not already done this. Then roll out your plans to staff. Be prepared to answer questions like:

  • What’s in it for me?
  • Is my job at risk?
  • Is the business stable?
  • Where is the business heading?
  • Will you provide training to help me adapt?

If your planned changes are significant you might want to hold face-to-face town hall meetings backed up by written communications including FAQs. Where changes are more incremental, cascading communications through line managers is a good approach.

With your HR plans in place, you might think you’re done for the next twelve months. But my experience tells me you’ll need to keep on top of any changes that the business and your people face. Combining annual planning with this level of flexibility will mean you’re ready to take care of any human resource issues that come your way.

Get your HR plans squared away with pragmatic, adaptable HR support from Crosse HR. Get in touch on 0330 555 1139 or at hello@crossehr.co.uk.

Should You Monitor Employee Emails?

Should You Monitor Employee Emails?

Monitoring employees’ emails or not to monitor? That is the question! Nobody wants to be accused of being Big Brother, but monitoring employees’ emails is perfectly legal if you go about it in the right way.

“Always eyes watching you and the voice enveloping you. Asleep or awake, indoors or out of doors, in the bath or bed – no escape. Nothing was your own except the few cubic centimetres in your skull.”  

― George Orwell, 1984 

Data Protection and Employee Rights 

As a business owner, you need to make sure your employees are carrying out their work effectively. You also have a responsibility to ensure they’re not using work email to do things they shouldn’t. Like sending offensive emails or sharing unprotected data. At the same time, you don’t want to encroach on your employees’ privacy or demonstrate a lack of trust.   

Before we consider whether you should monitor employees emails, let’s take a look at whether you can.  

The Information Commissioner’s Office states that, in general, it is considered intrusive to monitor your employees’ emails.   

That’s because employees have a right to respect for a private and family life under article 8 of the European Convention of Human Rights. This means people can send personal emails from a work computer and email address and expect them not to be monitored or read by employers.   

But what about work email?  

It’s perfectly legal for employers to monitor employees’ emails as long as certain criteria are fulfilled. This includes being: 

  • clear about the reasons for the monitoring 
  • satisfied that the monitoring arrangement is justified by real benefits 
  • clear with employees for the reasons, extent and nature of any monitoring that’s in place 

If you decide to monitor, you’ll need to warn employees that emails sent from a work computer may be observed. A good way to do this is to include suitable wording in your contract of employment. 

Before implementing a monitoring policy, employers must carry out an assessment of the proposed activity to establish 

  • the reasons for monitoring staff and the benefits that this will bring 
  • any negative effects the monitoring may have on staff 
  • whether the monitoring can be achieved through any less intrusive means   
  • whether the monitoring is justified, taking into account all of the above 

Think you might have sufficient reason to monitor? Then the next thing to consider is proportion.  

In-depth or Light-touch? 

Depending on your business and sector there may be highly valid reasons for monitoring staff email. For example, financial services organisations often monitor communications to ensure sensitive data is not being shared, accidentally or otherwise.  

However, all businesses considering email monitoring should act proportionately and fairly to achieve the right balance between organisational needs and employee privacy.

In most cases assessing the date, time and recipient or sender of an email will help you determine whether it relates to work or not. Reading private emails, particularly those that contain confidential information is likely to breach an employees’ privacy.  

Automated email monitoring can analyse huge amounts of email traffic, spot inappropriate content and deliver reports for managers. This distances managers from the emails themselves and raises a red flag indicating that further investigation is required.

Before jumping straight into an in-depth review of an employee’s inbox, it can often be a good idea to hold a meeting. By discussing how the individual has been using email and the kinds of information they’ve sent you can decide on a proportionate response.  

The Potential Impact of Monitoring Employees’ Emails  

Monitoring employees’ emails can create an atmosphere of distrust if implemented and acted on incorrectly.  

In some sectors, like those with significant data protection requirements, employees are likely to be more understanding of the need for monitoring employees’ emails. However, organisations where data is less sensitive may not find employees so tolerant. 

Should any breach in policy be identified, managers’ next steps are key to how your monitoring policy is perceived. Managers using the information inappropriately will bring the policy intro disrepute. However, used effectively – to curtail inappropriate behaviour or prevent action being taken against the business – employees will likely support the policy.  

Coupled with well-handled conversations and a genuine respect for employees’ privacy, email monitoring can be helpful for businesses. However, history has shown most people don’t appreciate their emails being monitored so introducing this policy requires careful handling.

If you do decide to go down this route ensure you’re acting legally, in line with your policy and for the good of your employees as well as the health of your business.  

For help navigating email monitoring and other employment contract issues, contact Crosse HR on 0330 555 1139 or at hello@crossehr.co.uk. 

 

Probation and Notice Periods – What You Need to Know

Probation and Notice Periods – What You Need to Know

Probation period not up yet? Thinking of saying goodbye to a new hire? Then something obviously hasn’t worked out. To ensure their departure goes smoothly, you need to give them the right amount of notice.

But how long should that be when an individual is still in their probation period? And what else do you need to consider? Read on for the answers.

Probation – Not Just For Criminals

Most employers operate a trial period for new employees – also known as a probation period – which can vary from a few days to several weeks or months. The length of probation should be clearly set out in the employee’s contract alongside the employee’s standard notice period.

But what happens if they hand their notice in, or you want them to leave, during their probationary period? Does the standard notice period apply? Or can you legally give less notice and hasten their departure?

It Depends on Length of Service

People with probation periods shorter than one month are not entitled to any notice so you can exit them from your firm immediately.

Of course, notice periods work both ways and employees can notify you of their intent to leave too. Which means you could be left in the lurch if someone leaves within their one-month probation period.

That’s why most organisations stipulate a probation period of three months. This often increases to six months for more senior roles and jobs that are difficult to recruit. By extending the notice period, both employers and employees are protected.

There are two types of notice that employees and employers must give.

Contractual Notice

Contractual notice is the agreed notice period, as set out in the employment contract, that must be given by either side to terminate the arrangement.

You can choose to give more notice than legally required. But of course you cannot give less than the law stipulates.

Typically, contractual notice periods are:

  • Less than one week for staff with under one month’s service
  • One week for people with between one and six months’ service
  • One month for people who have recently passed their probation

These notice periods give both sides a degree of protection and tie in nicely with the following legal minimums.

Statutory Notice

If you don’t include a notice period in your employees’ contracts you have to abide by legally predefined notice periods based on the individual’s length of service:

  • Less than one month’s service > no notice
  • One month to two years’ service > one week’s notice
  • Two years’ service > two week’s notice
  • Three years’ service > three week’s notice

The notice periods increase by one week for every complete year of tenure. So someone with eight years’ service would need to give and be given eight weeks’ notice.

Notice Has Been Served – What Happens Next?

This usually depends on who gave notice and the reasons why.

If an employee gave notice and there’s no problem (like performance issues), you will probably want them to work for the duration. This helps your organisation by keeping work moving and giving you time to recruit.

If you’ve given notice to a member of staff during the probation period, it’s usually because performance or attitude is not up to scratch. Which might mean you don’t want the employee to come in.

In this instance, you will still need to pay them for their notice period and you can do this in one of two ways:

  1. Pay in lieu of notice – you end the employment before the individual serves their notice and pay them as if they had worked their notice period.
  2. Garden leave – the employee serves their notice but doesn’t do any work for your company. This might happen if they are leaving to work for a competitor. Again, they must be paid for the full notice period.

Nobody wants to recruit the wrong person for the role. But occasionally it happens. Protect your business by:

  • checking your contracts of employment
  • paying notice periods as required
  • revisiting your recruitment practices to spot any gaps

If you want help protecting your business from the unexpected, get in touch with Crosse HR.

Unfair dismissal or wrongful dismissal?

Unfair dismissal or wrongful dismissal?

In this blog, we explore the differences between unfair dismissal and wrongful dismissal and explain how you can avoid falling foul of either.

The intricacies of employment law often trip business owners up. And one of the most common hazards is dismissing someone in line with the letter of the law. There are two kinds of dismissal that sound similar but mean very different things and you need to avoid getting either of them wrong.

Isn’t Unfair the Same as Wrongful?

Not quite. In fact, in legal terms, they are entirely different concepts, as we explain.

Wrongful Dismissal

This happens when you breach an individual’s contract in the process of dismissing them. The most common breach is failing to give an employee the correct length of contractual or statutory notice.

When are employees protected?

Employees have this right from day one so you need to be vigilant from the outset of a new employment contract. If you cannot settle the issue via conciliation with HR support, you could be looking at a tribunal or court case.

Claims for £25,000 or less would be settled in an employment tribunal whereas those over £25,000, would require a county or high court action.

How much could it cost?

 Damages are not fixed. The figure will be set in reference to the individual’s pay and benefits for the period of their notice had they received it. This can include items like a company car, bonus, health cover and pension payments.

The more senior the employee, the longer their notice period is likely to be and therefore the more costly their claim. It’s also worth noting that it’s unlikely you will be able to recover your court costs.

On the plus side, employees are required to look for a new job as soon as possible. If they secure one and work during what would have been their notice period, their new pay and benefits will be taken into consideration. This could reduce the amount of any monies owed.

What can you do to avoid it?

 If you want to dismiss an employee, ensure you give them notice in line with their contract or statutory minimums. If you want the individual out of the business immediately, you could pay them in lieu of notice. This means paying them all their usual pay and benefits as if they had still been working up until the end of their notice period.

This is a very common practice and in many cases will be cheaper than paying court, salary and benefit costs. You’ll also save time and effort into the bargain.

What else do you need to know?

What constitutes wrongful dismissal is defined by referring to case law. This means that the most recent judgement on the topic sets a precedent by which wrongful dismissal is assessed.

As such, it can change form time to time so you need to keep abreast of any changes. Or work with someone who does that as their day job.

Unfair Dismissal

 Employees are protected by law from being unfairly dismissed. It’s a statutory right and is based on the employer’s reason for dismissal. For you to defend an employee’s claim you must show that:

  • the reason for dismissal is one of the potentially fair reasons listed in the Employment Rights Act 1996 including:
    • capability
    • conduct
    • redundancy
    • statutory illegality
    • some other substantial reason
  • your conduct was fair and reasonable in the circumstances, taking into consideration the size and resources of your organisation. This means:

Both these tests must be passed: if you dismiss for a fair reason but carry out the dismissal unfairly, you will still be deemed to have acted unfairly. The only good news in this scenario is that the amount of compensation might be reduced.

When are employees protected?

Except in specific circumstances, employees must have a minimum of two years’ continuous service to qualify for the right to bring an unfair dismissal claim. And it can only be pursued in an employment tribunal.

How much could it cost?

 Compensation is made up of a basic award (calculated on the basis of age, length of service and salary) and a compensatory award limited to one year’s gross pay or £80,541, whichever is lowest. This takes into account future loss of earnings and loss of statutory rights.

What can you do to avoid it?

If you have an employee who you want to dismiss, you need to tread carefully. The Acas Discipline and Grievance Guide provides step-by-step advice on dealing with challenging situations including capability and conduct.

If you find you have dismissed someone unfairly and you do not have a case to defend, you could reinstate or re-engage your employee.

What else do you need to know about unfair dismissal?

 Sometimes an employee will pursue tandem claims. While this will mean a more complicated case it doesn’t necessarily mean more compensation as an employee would not be entitled to double recovery for the same loss.

What’s the key takeaway from all this? Bring in an HR specialist early on if you’re thinking of dismissing someone. It might cost you a few hours of their time but it’s likely to be a lot cheaper and quicker than getting it wrong and having to pay compensation and undergo a lengthy legal process.

If you need further advice or information on unfair dismissals or wrongful dismissals, then please contact us.

Should young workers be paid the National Living Wage?

Should young workers be paid the National Living Wage?

18 year olds can drink, smoke and drive legally. Also classed as young workers, they can even die for their country on the battlefield. But when it comes to work, they don’t have the same right to the National Living Wage (NLW) as other adults.

We discuss the background to this issue and debate the pros and cons of bringing young workers’ pay in line with the NLW.

What’s the Deal for The Younger Generation of Workers?

The national minimum wage has been in place since 1999 with the aim of guaranteeing a threshold below which no person should be paid (except apprentices who are paid far less).

Many people felt that this legislation did not go far enough and campaigned for a National Living Wage (NLW). This new level of pay was intended to provide people with sufficient income to ensure a decent quality of life.

From 1st April 2016, the government made the NLW mandatory for workers aged 25 and above. This represented a 50p per hour increase on the National Minimum Wage (NMW) which was £6.70 per hour at the time for workers aged 21 to 24.

This handy table shows the current levels of pay for workers of different ages.

Source: Gov.Uk

This is an interesting state of affairs because equal pay for work of equal value and age discrimination are established in English law.

You cannot pay and man and woman differently for the doing work of the same value. You cannot discriminate against people because of their age.

Yet the government’s NMW and NLW policy clearly does both these things. Employers would be perfectly within their rights to pay a 24 year old the NLW when they’re doing the same job as a 30 year old who could be earning much more.

With the struggles young people face in terms of high rent, the difficulty of saving for a deposit on a house and the impossibility of securing a mortgage in a buoyant housing market, low pay is a pressing question.

The Debate – Should We Pay Younger People the NLW?

Pay Equity

If we said that all men could only be paid the NMW there would be uproar. That’s because we recognise that when two people do work of equal value, they should be paid broadly the same.

However, can it really be said that a young person brings the same level of knowledge and experience as someone much older? Probably not in more complex roles.

Yet in lower skilled jobs that can be picked up quickly and easily there’s certainly an argument against this. Surely a young, less experienced person can deliver the same level of customer satisfaction as someone older in a retail role for example?

It has to be recognised that the NLW is not the pay that an employer must pay: it’s the pay they must not go below. This means that businesses are free to pay all workers more than the NLW to making it possible to achieve pay parity.

In fact, a number of larger firms have said they are unlikely to differentiate pay by age for workers aged 21-24. This is partly on legal grounds and partly because they want to ensure good employment relations. And it’s also because they are uncomfortable with treating people in their early 20s differently from those in their mid-20s.

Cost to Business

Of course one reason not to drop the age for the NLW is the cost to businesses.

An extra £910 per year plus benefits and tax could be enough to push some businesses under. And it might make it less likely that firms would employ youngsters when they could get someone with more experience for the same wage.

Hile business considerations are one side of the coin, quality of life is the other. People in lower paid roles tend to have little if any savings should something go wrong. £910 a year to these people is a significant proportion of their salary.

The cost to Education and Society

It can also be argued that making young people too comfortable in paid work could lead to lower rates of further and higher education.

The NMW and NLW have been put in place to address exploitation at work without encouraging young people to enter the labour market who may otherwise stay in college or go to university.

However, this argument only applies to those aged 18 to 21, whereas there are lower rates of pay for people aged 21 to 24. Whether this is the right way to encourage young people to go to university is questionable.

Increasing minimum pay levels might be difficult but it is certainly possible as the introduction of the NLW shows. Whether pay rates are ever made more equitable remains to be seen but you can be sure that, if they are, businesses will be expected to bear the additional costs.

Gender Pay Gap Reporting: The Story So Far

Gender Pay Gap Reporting: The Story So Far

Time’s up for large employers to submit their gender pay gap report. Our roundup explores what we can we learn from the submissions.

Remind Me What The Gender Pay Gap Is All About

All public and private sector organisations in Britain employing more than 250 people had to send their first gender pay gap report to the government by 31st March and 4th April respectively.

The report needed to identify pay differentials between men and women to show:

  • Any differences in terms of hourly rates of pay – for example, men earn 10% more per hour than women
  • The percentage of each sex at different pay quartile positions – this might show that the lowest paid quartile of the workforce is mainly female and the highest quartile mainly male
  • Any bonus gap – such as men earning 20% more in bonuses than women

Both the mean and median figures need to be reported and organisations must provide a commentary explaining their results and what they intend to do to reduce any gap. Results are published on a government website and must also be publicly accessible on each company’s website.

What Not to Do

True to form, the Big Four exploited a loophole in the guidance and have been publicly named and shame for their action. Instead of including all employees in their figures, they omitted the data of their highest-paid individuals; their partners.

After facing criticism from the Treasury Select Committee, these leading consulting firms were forced to re-report their figures. In three cases the recalculation increased the median hourly gender pay gap.

Consultancy Name Original Gender Pay Gap Revised Gender Pay Gap
PwC 14.2% 18.7%
KPMG 22.1% 27%
Ernst and Young 14.8% 19.5%

The only exception was Deloitte which saw a slight decrease from 15.3% to 15.2%.

The moral of this story? Abide by the letter and spirit of the government’s reporting guidance.

Key Revelations

The UK’s gender pay gap currently stands at 19.1% for all employees or 9.4% for those working full-time. Beneath these headline figures, the submitted reports reveal a range of results:

  • A small number of organisations have a reverse gender pay gap – for example, Cambridgeshire Police pay women 12.9% more than men.
  • At the other end of the spectrum are Phase Eight whose female employees earn 64.8% less on average than males.
  • Other organisations, like the UK Armed Forces, are almost gender neutral paying women 0.9% less than men.

The main reason cited for the gender pay gap is that organisations have more men in senior roles where significantly more money is earned.

Take Easyjet: they pay women on average 51.7% less than men. The reason for this is that just 6% of UK pilots are women earning a mean salary of £92,400. In comparison, 69% of cabin crew are female earning an average salary of £24,800.

With such a gender divide between high and lower paid roles, it’s no surprise that there’s a massive pay disparity.

What can Easyjet do about this? Seeking to employ more women in pilot roles and more men in cabin crew roles would help close the gender pay gap. However, this will require more creative recruitment tactics to be used to attract the right numbers of suitably qualified candidates of each sex to the roles. And all without breaking equality laws.  

What Does The Gender Pay Gap Mean For Employers?

With pay gaps now out in the open, customers, employees and potential future candidates will have access to the data. This will allow both men and women to factor the information into decisions like whether they want to apply to or remain with a company or do business with an organisation.

With the glass ceiling still evident in many organisations, this could be a particular consideration for female applicants when seeking career advancement.

Nicky Morgan, Minister for Women and Equalities, said the information would help women “use their position as employees and consumers to demand more from businesses, ensuring their talents are given the recognition and reward they deserve.”

However, it’s useful to remember that the data works both ways. Organisations that pay males less may find fewer men applying for roles or possibly even asking for higher starting salaries.

What happens next is in the hands of organisations, candidates, employees and customers. The gender pay gap reporting exercise could be an exercise in futility or a catalyst for change. We await next year’s reports with anticipation.

If you’d like the support of an experienced HR consultant to address your gender pay gap, contact Crosse HR on 0330 555 1139 or email at hello@crossehr.co.uk.

Fit For Work? – Uncovering Sick Note Storytelling

Fit For Work? – Uncovering Sick Note Storytelling

137.3 million. That’s the number of working days UK businesses lost to sick note or injury in 2016. The government recognised the challenge that managing long term absenteeism posed to businesses. And, in 2013, they replaced sick notes with fit notes to help employers reduce sickness absence costs and minimise the disruption caused by employees being off sick unnecessarily.

However, several years on, the fit note is plagued by misconceptions. This article clears up the myths so you can make best use of the system for your business.

Myth 1 – Employees Can Get a Fit Note from Day One of Being Ill

Contrary to popular opinion, employees are not able to obtain a fit note until they have been absent from work for seven calendar days. Demonstrating they are ill or injured for this initial period should be covered by a self-certification form.

Myth 2 – Sick Note Can Carry a Cost

Fit notes are issued free of charge on the NHS by a GP.  However, if an employer requests medical evidence that an employee is unfit to work before they have been absent for seven consecutive days, this will incur a cost.  Which is where the confusion can come about.  In this case, it is up to employers to foot the bill.

Myth 3 – Employees Can Only Return to Work Once Completely Fit

In most cases, people don’t need to be completely fit to return to work. Fit notes are issued on the premise that appropriate work is usually good for people’s physical and mental well-being. Which means employers can support recovery by giving people alternative work to do.  This should be appropriate and within the limits that the individual’s health condition imposes.

Myth 4 – Fit Notes Are Specific to the Individual’s Job

Fit notes tell you whether an employee’s doctor considers them to be fit for work in general and is not in reference to the individual’s specific job. This gives you the option to discuss alternative work with your employee that could be outside their usual remit. A temporary change to duties can often support people in returning to work.

Myth 5 – Fit Notes Are Legally Enforceable

The advice contained in a fit note is for the employee and is not binding on the company. It is ultimately down to you as the employer to decide how to act on the advice, taking into account your wider legal obligations.

If the fit note contains work adjustment suggestions you are unable to implement you can explain this to your employee and behave as if the fit note had said the employee is not fit to work. Alternatively, request that your employee returns to the doctor for alternative suggestions.

Consider involving a HR consultant to navigate your legal responsibilities and bring in specialist occupational health expertise if required.

Myth 6 – Only a Fit Note Will Do

It’s up to you what form of evidence you are prepared to accept from your employees regarding their long-term sickness absence.  You can choose to accept other proof, like a hospital letter detailing in-patient dates or a letter from chiropractor, if you choose to.  Judge each piece of evidence on its own merits and, if in doubt, request the employee provides a fit note if you feel their evidence is insufficient.

Myth 7 – Employers Can Revoke Sick Pay if a Sick Note is Not Provided

This myth is half true, half false.  If an employee fails to provide a fit note you cannot withhold statutory sick pay (SSP) even if the fit note is not received on day eight of their absence.   This is because the employee may have been too ill to get to the doctor or they have been unable to secure an appointment.

However, if you offer sick pay over SSP, you are entitled to apply your own rules to this remuneration element.  You can choose to revoke payment from day eight onwards until evidence is provided and then backdate the payment or even fail to pay it at all if evidence is not provided.  Ensure your rules are applied fairly, consistently and non-discriminatorily to keep your feet legally dry.

Myth 8 – Sick Notes Can Roll on Forever

A sick note will have a specified end date.  If the employee believes they are still not well enough to return to work or full duties, they can apply to their doctor to extend the sick note.

To prevent this from continuing indefinitely, if your employee has been off work sick for four weeks, you can make a referral to the government’s Occupational Health Service.  The Fit for Work assessment provides the employee with advice on interventions and steps to help them return to work.  Subject to the employee’s consent, the Return to Work Plan will be shared with you and the employee’s GP.

If you need some pragmatic HR support to help with a sickness absence case, get in touch on 0330 555 1139 or at hello@crossehr.co.uk.