Frequently Asked Questions

My employee has less than one year's service, am I safe to dismiss?

Generally speaking, employees with less than 51 weeks service (1 year minus the statutory 1 week's notice period) are unable to bring a straightforward unfair dismissal claim.  However, there are a number of grounds on which employees do not need to have a minimum amount of service in order to bring a claim and this includes claims where the reason for dismissal is due to some form of discrimination, on health and safety grounds or on the basis that they are trade union members.

It can be a costly mistake to assume that it is safe to dismiss an employee with short service without considering possible claims.  We are happy to advise you on whether or not there is a risk of a claim from an employee in these circumstances.

I have sacked someone - what do I do about their notice period?

Employees are entitled to receive notice for the ending of their employment.  This should be the greater of the statutory minimum notice period or the notice period set out in their contract of employment.

If you have already dismissed somebody, you will need to decide how to handle their notice provisions.  Your contract may include a clause which allows you to make a payment in lieu of notice or to put an employee on garden leave.  If your contract does not contain these provisions then you are technically breaching their employment contract and would not therefore be able to rely on any clauses in that contract which work in your favour, for example clauses about protecting your business' confidential information or restrictions on where they can work after their employment with you ends.

If an employee has been dismissed for gross misconduct then they are not entitled to receive any notice or any pay in lieu of notice.

If my employee is off on maternity leave can she still receive child care vouchers from the company?

During a period of maternity leave an employee is entitled to receive statutory maternity pay (if they are eligible under the SMP rules).  They are not entitled to any other pay.  However, they are entitled to receive their "non-cash benefits".

Many employers operate a child care voucher scheme as this can offer tax savings to both employee and employer.  The scheme often works by employees sacrificing part of their salary in exchange for child care vouchers paid to their child care providers.

HM Revenue & Customs guidance makes clear that child care vouchers should be treated as non-cash benefits rather than pay.  It means that employers must continue to provide them during both ordinary and additional maternity leave periods.

Are employees on long-term sick leave entitled to payment during their notice period?

Employers sometimes face the decision of dismissing an employee on the grounds of their ill health.  This decision often comes after the employee has used up their contractual and statutory sick pay entitlements.

Whether or not you need to pay this employee notice depends on how much notice the employer has to give under the contract of employment.  If you are obliged to give notice which is at least a week more than the statutory minimum notice payment, you do not need to make any payment during the employee's notice period.  However, if the employee's contract provides a notice period which is less than a week more than the statutory minimum notice period, you must pay the employee their normal salary payment for the statutory minimum notice period.

It is not quite clear where this strange rule originated from but it is certainly worth being aware of.

I am planning to pay my employee compensation under a compromise agreement, can that be made tax free?

The general rule is that payments up to £30,000 can be paid tax free to employees as long as the payment is genuine compensation for loss of their employment.  If all or part of the payment is for notice pay, then the payment may be taxable.  Under the PAYE regulations, you are obliged to deduct tax from the balance of any payments over £30,000 at the employee's normal rate.  It is important to clarify this point within the terms of a compromise agreement and we would be happy to provide you with advice on the correct wording for this.