April 2018


Hello, we would like to share with you the latest news within Cluer HR, as well as keeping you up to date with developments in the world of HR and employment law as they occur.

It’s all part of the service. We hope you find it useful. Your comments and suggestions are always welcome.

Farewell Suzanne and a huge warm welcome to Tracey!

Well this month we have said a fond farewell to Suzanne as she moves to pastures new – quite literally! She has taken a decision to up sticks and move to sunny Cornwall! We wish Suzanne all the very best for her new life in Cornwall.

And we have welcomed to the team, in Suzanne’s place, Tracey Cooke. Tracey has more than 20 years’ experience in HR and is MCIPD qualified. Her breadth and depth of HR knowledge is excellent and she has already hit the ground running, which is great!

Happy Birthday Ms Haywood!!

Image credit: Shutterstock

Watch out for employment contracts which are silent on when notice is deemed to be given, or risk giving rather more than you perhaps bargained for…

As was the case for the Newcastle Upon Tyne NHS Trust Foundation who had employment contracts which were silent on when notice is deemed to be given. The question was when does notice of termination therefore take effect? Is it (i) when the letter would have been delivered in the ordinary course of post; (ii) when it was in fact delivered to that address; or (iii) when it comes to the attention of the employee and s/he has read it (or had a reasonable opportunity to do so).

The answer is (iii), ie when it is actually received by the employee and s/he has read it (or had a reasonable opportunity to read it), in their case against ex-employee Ms Haywood.

Does it really matter, we hear you say!…..Well, in this case, it mattered quite a lot!

Ms Haywood was told in April 2011 that she was at risk of redundancy. She then went on holiday on 19th April 2011 and on 20th April, her employer sent notice of termination by recorded delivery and ordinary post. Ms Haywood didn’t however read the letter until her return from holiday on 27th April.

Now, in July of that year Ms Haywood turned 50 and redundancy after her 50th birthday would have entitled her to a considerably more generous pension than redundancy beforehand.

Ms Haywood was contractually entitled to be given 12 weeks’ notice, but her contract was silent about how notice was deemed given, i.e. there was nothing to say that notice would take effect when the letter would have been delivered in the ordinary course of post, or even when it was in fact delivered to that address. As such the Courts ruled that in absence of any such clause, it automatically took effect from “when it comes to the attention of the employee and s/he has read it (or had a reasonable opportunity to do so)”.

In the case of Ms Haywood this had the effect of moving the end of her notice period from 20th July to 27th July, tipping her nicely into her 50th year of age and entitling her to a much more generous pension!


Image credit: Shutterstock

We know we’re starting to sound like real nags now, but Cluer HR Retained Clients, you will know, one part of your annual client review is to review your Employee Handbook to ensure that it is up to date and we share with you not just changes in legislation, but suggestions that we have to strengthen the document further, so that it continues to offer your business maximum protection and flexibility.

Having said that, even if your client review is not due, we have taken the liberty of updating your Employee Handbook from the perspective of GDPR compliance (when we meet with you for your full client review we will then carry out a full review of the document).

And remember GDPR Privacy notices must be issued to existing and new employees from 25th May. The notices must provide them with information on the processing of their personal data. Cluer HR Retained clients – we have template privacy notice were included in your GDPR compliance packs, emailed to you back in February. Please do let us know if you need any further support in producing these notices for your employees.

Pay in lieu of notice is now taxable

Image credit: Shutterstock

Pay in lieu of notice (PILON) is a payment made to an employee when employment is terminated without notice, instead of the employee working through a notice period and receiving pay in the normal way. It is different from ‘garden leave’, in which the employee is still in employment during the notice period and is paid during that period, even though he or she is not present at work.

Under the previous rules (which still apply where the termination date was before 6 April 2018, even if the payment is made after that date), whether or not a payment in lieu of notice was taxable depended on the terms of the employee’s contract.

If the contract of employment contained an express clause allowing the employer to pay the employee in lieu of notice, the payment represents wages and would, therefore, be subject to tax and national insurance contributions.

If the contract of employment didn’t contain an express payment in lieu of notice clause, but the employer’s custom and practice was always to pay in lieu, such a term may have been implied into the contract of employment and any resulting payment in lieu may have been taxable.

However, if there was no payment in lieu of notice contract clause, and there was no risk of there being one implied, the payment could be regarded as compensation for a breach of contract (the failure to give the employee his or her contractual notice) and the first £30,000 will be tax-free.

But, as of the 6th April 2018 the rules have changed, so all PILON made in respect of employment that terminated on or after that date is subject to tax and national insurance, regardless of whether the employment contract provides for PILON or not.

Employers must now calculate what the employee’s basic pay would have been had he or she worked the notice period, using a formula set out in the legislation. Where a termination payment is greater than this amount, the £30,000 exemption can apply to the remainder.

If you need help or advice on the matter of payments in lieu of notice call us on 01386 751740.

Cluer HR Blog

Did you read our blogs this month? We shared an inside story from one of our clients.


We talked about the guidelines being considered by the Equalities and Human Rights Commission to prevent sexual harassment in the work place.

If any of these articles have raised some concerns for your business, please don’t hesitate to get in touch at: [email protected] or call us on 01386 751 740

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