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Chartered Accountant

Sara Graff Chartered Accountant

Sara Graff Chartered AccountantSara Graff Chartered Accountant

NEW LEGISLATION CAME INTO FORCE ON 1ST OCTOBER 2004 WHICH AFFECTS ALL EMPLOYERS - PLEASE READ THE FOLLOWING CAREFULLY!


The Employment Act 2002 (Dispute Resolution) Regulations came into effect on 1st October 2004 which give new rights and responsibilities to employers and employees with regard to dismissal and disciplinary procedures. This applies to all employers and employees who have been employed for more than a year.

The procedures that should be adopted when an employee is not performing satisfactorily are as follows:

1. Informal warning - an informal discussion to try and rectify the problem. A note should be made of the date on which the issue was discussed and what action was agreed.

2. Formal warning - If the problem persists the employee should be invited to a meeting for a formal discussion. The employee is entitled to be accompanied by a colleague or trade union representative (although this is unlikely to be relevant for most of our clients). After the formal meeting a final written warning should be given that failure to improve or modify behaviour may lead to dismissal and it should refer to the right of appeal.

There is now a minimum 3-step procedure that must be followed before resorting to a tribunal. This process should be resorted to after the above warnings.

1. Put it in writing - You must send the employee a written explanation of the conduct, capability or other circumstances that have led you to think about taking dismissal or disciplinary action against them. This is in addition to the written warning referred to above. Similarly an employee must put any reasons for their grievance in writing.

2. Meet and discuss - you must invite the employee to a meeting to discuss the issue. After the meeting you should inform the employee of your decision and offer them the right to appeal.

3. Appeal - If the employee wishes to appeal, they must inform you. You must then invite the employee to a second meeting to discuss the appeal. Following the appeal meeting you must give your final decision.

In exceptional circumstances, where an employee is dismissed following a case of gross misconduct, the dismissal procedure can be modified to a two-step process as follows:

1. Put it in writing - Send the employee written explanation of the alleged misconduct that led to their dismissal - including evidence for this decision and the employee's right to appeal.

2. Appeal - if the employee wishes to appeal, they must inform you. You must then invite the employee to a meeting to discuss the appeal and following the meeting give your final decision.

As part of the new law it is your duty to fully inform your staff of their new rights and procedures that must be followed and where they can find these new changes. You can direct them to www.dti.gov.uk/resolvingdisputes if you wish which is a very informative website on the subject.

The 3 step process must also be set out in either an initial offer letter, written statement of employment particulars, a contract of employment or in a written statement of change.

If a dispute reaches tribunal and one of the parties has not followed the above procedures in full, they will face penalties. The dismissal will become automatically unfair, and a mandatory minimum of four weeks' pay will be awarded to the employee. Any additional compensation will be increased by a minimum of 10% up to a maximum of 50%. If an employee fails to comply with the new process, any award they receive will be reduced between 10% and 50%.

If you have a contract that we have drafted for you, please will you contact us so that we can issue you with a statement of the new changes.

CHILDCARE VOUCHERS

You may have read in the press over the last few months about the government initiative for employers to assist employees with childcare costs by providing childcare vouchers. Currently childcare vouchers are exempt from National Insurance Contributions for employees so therefore they are of limited help for higher rate employees whose marginal rate of National Insurance is only 1%. However, from April 2005, childcare vouchers to the value of £50 per week will be exempt from both Income Tax and National insurance but will only apply to registered childcare.

Nannies will be able to be registered from April 2005, but unfortunately the criteria for registration will not be released until January 2005. We will inform you as soon as the regulations are published.

ACCOUNTING SERVICES

Please note that Sara Graff is a qualified Chartered Accountant and Chartered Tax Advisor and provides accounting and tax services in addition to the general Taxing Nannies service. She would be happy to assist you in preparing your tax return or assist you with other accounting services and if you wish to avail yourselves of this service or would like some general advice please feel free to ring Sara on +44 (0)208 882 6847.

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