Howard Lewis-Nunn and Jackie Thomas answers some of your legal questions Q We have agreed a severance package with an employee, part of whichincludes a payment in lieu of him serving out his notice. Do we have to deducttax from this payment or can it be made to him gross? A This sum will depend on the employee’s contract. If you areentitled to dismiss him immediately and pay him in lieu of notice, the paymentis classed as an “emolument” and is subject to Income Tax underSchedule E. If his contract makes no such provision, termination in this way istechnically a breach of contract and any payment is treated as compensation forthe breach. This means up to £30,000 can be paid tax-free. The employee is onlyentitled to net salary, although it is common practice for employers to paygross as part of a severance package. Q One of the candidates we rejected following a job interview has askedfor copies of the interview notes and assessments. Do we have to provide them? A Under the Data Protection Act 1998, if a living individual can beidentified from a document then (subject to some exemptions) they have theright of access to it. The Information Commissioner in the proposed code ofpractice on employment and the Data Protection Act has confirmed this shouldinclude interview records, including any handwritten comments. You are not obliged to do anything until a request in writing is received bythe individual. Disclosure can be declined if the documents identify anotherindividual, unless they have consented or it is reasonable to comply. There arelimited grounds for refusing disclosure. Q We are looking at ways of restructuring the remuneration packages forour employees. One proposal under consideration involves making changes tocurrent benefits. Is there any reason why we cannot do this? A It will depend on whether the employees are contractually entitledto receive these benefits. If they are not part of their contractual terms oryou have a contractual right to vary the benefits, you can make changes tothem. However, if the benefits do form part of their contracts, you will need toobtain the employees’ consent to the changes. If they do not consent and you still want to make the changes, you have twooptions. You can terminate their contracts, or offer new ones with the amendedbenefits, in which case the employees would have a potential claim for unfairdismissal if they have one year’s service. Alternatively, you can make the changes unilaterally, in which case theemployees can either accept them, continue to work but refuse to accept thechanges, in which case they may have claims for breach of contract; oralternatively they could resign and claim constructive (unfair) dismissal. Inpractice, both the likelihood of the employees accepting the changes, and thepotential compensation in any unfair dismissal claim, will depend on the exactnature of the changes you wish to make. Howard Lewis-Nunn and Jackie Thomas are members of the employment team atBerwin Leighton Paisner Q & AOn 22 Jan 2002 in Personnel Today Previous Article Next Article Comments are closed. Related posts:No related photos.