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Coronavirus Job Retention Scheme: Details of Furlough Leave

The government has published further details of the Coronavirus Job Retention Scheme (otherwise known as the Furlough Scheme).

Increase in awards for sexual harassment.

In the case of Majid v AA Solicitors 2016, Ms Majid had been employed for around 6 weeks by AA solicitors and was then dismissed, supposedly for redundancy, when she politely rejected advances from her employer, Mr Ali. She brought a claim for unfair dismissal and sexual harassment giving examples of Mr Ali asking her to go out to the cinema, talking about installing a bed in one of the rooms at the office, attempting to hug her, touching her arms, squeezing and rubbing her hands when shaking hands and making her feel uncomfortable by these types of act. The Tribunal awarded her £14,000 for injury to feelings £4,000 for aggravated damages and £2,000 for financial loss. AA Solicitors appealed to the Employment Appeal Tribunal on the basis that the award was excessive. However, the Appeal Tribunal refused to reduce the award stating that awards should be increased for inflation.  The calculation of awards for injury to feelings are dependent on which band of severity the Tribunal assesses the harassment falls into. There are 3 bands. These bands were set in 2002 in a case called Vento v Chief Constable of West Yorkshire in 2002. The lowest band was £500 to £5000, a middle band of £6,000 to £15,000 and a top band for the most serious cases of £18,000 to £30,000. It has now been confirmed that inflation should be applied and so the lowest band, for less serious cases such as a one off incident or an isolated incident, is £812 to £8,116. The middle band which the above case fell into of £8,116 to £24,348 and the highest band where there has been a lengthy campaign of harassment is now £24,348 to £48,696. It would only be in exceptional cases that an award would exceed this.

Termination payments: All payments in lieu of notice are to be taxed from April 2018.

Following consultation which commenced in 2015, the Government has confirmed its intention to tax all payments, including benefits and bonus, that would be due to the employee had they worked their notice. This is regardless of whether the employment contract gives a right to make a payment in lieu of notice or not. A further consultation which closes on 5 October 2016 has been published along with draft legislation which in short states: The tax exemption for termination payments up to £30,000 (so long as it does not include any pay in lieu of notice) will remain in place, however any payment over £30,000 with be subject to both tax and employers NI. This will increase a payment over £30,000 by up to 13.8%. The employee’s exemption for NI payment will remain.Compensation for injury to feelings on termination will not benefit from tax relief unless there is psychiatric injury or other recognized medical condition.Injury to feelings for pre-termination discrimination will remain tax free up to certain limits.The tax exemption on payment of legal fees and on payments to registered pension schemes will remain A further draft of the legislation will be published at the time of publication of the draft Finance Bill 2017 legislation.