Monthly Archives: September 2009

Abolish the perk

Historically, the ‘expense account’ has not been open to all employees.  In some sectors, there has often been   a feeling that the ‘expense account’ opened the door to the opportunity to live a more expensive lifestyle on the employer’s ticket .

To the expense account holder, certain claims are often viewed as ‘perks’.    The very concept of a perk (once known as a perquisite) is one that leads us all to difficulty, since there is more than one meaning.  It can mean:

a)      an incidental payment or privilege, or advantage over and above regular income

b)      a gratuity or tip

c)       something demanded as due (a particular privilege of Royalty for example)

So  the ‘perks’ view of expenses leads us to a place of conflicting viewpoints.

Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy.   Tel: 08452 303050  Fax: 08452 303060  Website : www.irenicon.co.uk.  You can follow Annabel on twitter – http://twitter.com/AnnabelKaye

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Abolish the perk

One of the hottest employment law issues this year has been – expenses.  The MPs kicked off a scandal that reveals a fault line in our attitudes to “expenses” claims.

Are expenses there simply to reimburse individuals for the costs they directly incur in working for their employer?  Certainly the Revenue take the view that any expenses beyond those that are unequivocally for the business are ‘benefits’, and should be taxed accordingly.   By implication, the Revenue recognises that there may be a two tier “expenses” system – one for those items that are  ‘wholly and necessarily incurred in the performance of one’s duties’, and not taxable benefits for the employee, and a second for “expenses” that are in the nature of benefits which are taxable in the employee’s hands.

Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy.   Tel: 08452 303050  Fax: 08452 303060  Website : www.irenicon.co.uk.  You can follow Annabel on twitter – http://twitter.com/AnnabelKaye

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Modern morals and modern times

With adult minimum wage rates going to £5.80 an hour, we ought to be prepared to justify in business and social terms how it is that some people are being paid five, ten, twenty or a hundred times that amount.    We have spent so much time on ‘equal pay’, and this has brought only mixed results.  Perhaps we should now turn our attention to ‘unequal pay’.  We need to be sure we are not simply funding a ‘people-like-us’ wage spiral that has no underlying financial or commercial objective for the organisation, or indeed the nation.

Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy.   Tel: 08452 303050  Fax: 08452 303060  Website : www.irenicon.co.uk.  You can follow Annabel on twitter – http://twitter.com/AnnabelKaye

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Modern morals and modern times

We have all seen (to our own cost) that not every high earner is being incentivised towards doing something that needs to be done.  And some individuals have a view of their own worth that is not widely shared.   In a true market place, those individuals who overvalue their contribution would simply be unemployed (or be forced by circumstance reduce their rates).

When the employer is subsidised or entirely funded by the tax payer, the market place is not ‘pure’ since these additional funds increase the employer’s ability to pay without necessarily increasing the individual’s ability to add value.  The gap between rich and poor wage earners becomes a social and moral issue when high salaries are being funded from taxation of individuals on minimum wage.

Some organisations, arguably including our Parliament, have fudged the issue by publicising a pay scale, but using an indulgent expense or allowance system to increase the value of the post to the post holder.

If high salaries should be funded by the tax-payer, then it is for the employers to make the ‘business’ case and convince an increasingly sceptical public of value.   The worst of all choices is to pay lip service to moderate salaries with hidden enhancements and increments.   This reduces confidence in our institutions and creates a climate where people believe ‘everyone is on the fiddle’.

Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy.   Tel: 08452 303050  Fax: 08452 303060  Website : www.irenicon.co.uk.  You can follow Annabel on twitter – http://twitter.com/AnnabelKaye

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Modern morals and modern times

This year has brought a lot of talk about the structure of bonuses, claiming of expenses, and the inherent worth of the ‘high earners’.

There is not much understanding amongst the majority of ordinary employees of what it takes to start a business and take it to local, national, or international success.   Those individuals who can do so profitably are real wealth creators.  For many the real question is not ‘how much do these people cost?’ but ‘how much more than their cost can these people generate?’    These entrepreneurial or technical specialists are the subject of true competitive international bidding, and can command extremely high fees for their services. 

There is a place for high earners, great incentives and even sensible tax planning, as long as this profits the shareholders/stakeholders.

Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy.   Tel: 08452 303050  Fax: 08452 303060  Website : www.irenicon.co.uk.  You can follow Annabel on twitter – http://twitter.com/AnnabelKaye

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Pickets at the gate

You may not be ‘in dispute’ with your employees, but they may have jobs that involve visiting other sites where there are pickets at the gate.

If you are in a highly unionised environment you will have met this before, and you should follow your normal procedures, but if this is your first time around you should be aware that:

Many union members will refuse to cross picket lines

Even if your staff are not in a Union, they may have legitimate health and safety concerns about crossing some picket lines, and you should investigate carefully the circumstances of any refusal or failure to cross a picket line before considering whether you have a disciplinary issue with the individual concerned.

Whether they are entitled to be paid if they are not crossing picket lines depends in great part on your contract AND on the effect of this refusal.

Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy.   Tel: 08452 303050  Fax: 08452 303060  Website : www.irenicon.co.uk.  You can follow Annabel on twitter – http://twitter.com/AnnabelKaye

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Local transport difficulties

Many workers have been affected by local tube or rail disruptions.  Technically it is their job to get up earlier and find an alternative route into work.  In reality, many employers arrange home working (where appropriate) which reduces stress and improves productivity.

If you don’t have an established car sharing or lift sharing scheme, you should be careful you don’t end up setting up liability for uninsured drivers.  You should not be ordering or directing employees to get into a car with ‘Fred’ if you don’t know that Fred is insured.  If that is a fully insured company car that is different.

Hourly paid workers are not usually paid except for the hours they work, though salaried workers may be on a different basis.  You should check your contracts to see if you do in fact pay people on an hourly basis or some other way.

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