Employee rights consultations: ICAEW Tax Faculty comments

A review of who enforces employment rights needs also to look into the law and guidance that is being enforced. This is because employment rights law needs care and management provisions to enable those who enforce it to adopt a pragmatic approach when employers make technical breaches of the law which actually benefit employees. An example is national minimum wage (NMW) where HMRC has no statutory leeway to not enforce the letter of the law and penalise employers for technical breaches that actually benefit employees (eg, deductions for savings clubs and sales to employees of goods and services at a discount).

ICAEW Tax Faculty expressed this view when responding (in ICAEW REP 103/19) to the Good Work Plan: Establishing a New Single Enforcement Body for Employment Rights consultation published by the Department for Business, Energy & Industrial Strategy on 16 July 2019.

ICAEW Tax Faculty has also responded in ICAEW REP 104/19 to the Good Work Plan: Health is Everyone’s Business: proposals to reduce ill health-related job loss consultation published by the Department of Work & Pensions and Department of Health and Social Care on 18 July 2019 and in ICAEW REP 105/19 to the Good Work Plan: Proposals to Support Families consultation published by the Department for Business, Energy & Industrial Strategy on 19 July 2019.

In the response on health we said that we do not support the proposals to, first, align statutory sick pay enforcement with NMW enforcement, unless statutory care and management powers are incorporated into the law, and, secondly, make employers report sickness absences to HMRC, as it would create a burden for no good purpose as many employers keep no records of sickness but instead in the interests of good employee/employer relations simply pay their sick employees at the normal rate.

In the families response we recommended that final policy decisions should be legislated at least eighteen months before go live to ensure that HMRC can issue well before go live (instead of at the last minute) final IT specifications (rather than a brief summary) and guidance based on enacted (rather than proposed) legislation, to allow time for testing and training and for operational difficulties to be put right in good time before the implementation date.