The A-Z of employment issues for an Israeli Company in the United Kingdom Daniel Naftalin 16 April 2012

Status of the relationship  Volunteer?  Worker?  Employee?

Taxation  Employees’ income taxed at up to 45% if >£150,000 (c. ILS 890,000)  Social security contributions required from employee (approx 2%) and employer (approx 13.8%)  Beware of IR35

Formation of the contract  Statement of terms  Express terms  Implied terms  Fiduciary duties

Statutory benefits  National Minimum Wage  Minimum notice periods  Statutory Sick Pay  Minimum holiday and rest breaks  Pension entitlements  Family friendly provisions: –Maternity –Paternity –Adoption –Parental leave –Time off for dependants –Right to request flexible working

Common contractual benefits  Car allowance  Season ticket loan  Private health care  Private dental care  Confidential Helpline  PHI cover  Enhanced sick pay  Enhanced maternity pay  Enhanced pension

Categories of protected worker  The protected characteristics under the Equality Act 2010: –Sex –Pregnancy and maternity –Race (includes colour, nationality, ethnicity) –Age (all age groups covered) –Disability –Religion/Belief –Gender reassignment –Sexual orientation  Part time workers  Fixed term workers  Temporary workers

Dismissal  Unfair Dismissal  Notice provisions under contract

Protecting against unfair competition  Restrictive covenants: –Can protect business, providing: –They are designed to protect a legitimate business interest; and –They go no further than is reasonably necessary in doing so. –Unlikely to be enforceable if longer than 12 months (but may only work if 3 or 6 months)  Database regulations  Garden leave provisions in contracts

TUPE  Employees transfer from previous employer  Entitled to same terms as before  Any dismissal for a reason relating to the transfer automatically unfair  Information and consultation obligations apply

Industrial relations  Trade unions: –Not common in private sector (particularly if not industrialised) –Recognition obligations triggered by sufficient interest –Statutory procedure  European works councils  Employee works councils under ICER (if more than 50 employees)  Consultation obligations in large scale redundancy situations (20 or more employees)  Consultation obligations under TUPE

Bribery Act 2010  A criminal offence to: –bribe another person –accept a bribe –bribe a foreign public official (no exceptions for ‘grease payments’) –(for commercial institutions) fail to prevent a bribe  Wide territorial scope  Unlimited fines, prison, ban from public procurement contracts  Adequate procedures defence: make sure you have a policy and train your staff on it

Enforcement The Employment Tribunal  Discrimination  Unfair dismissal  Whistleblowing  Breach of contract up to £25,000 (High court / county court if over)  Unlawful deductions  Breach of Working Time Regulations Currently, no fees Costs generally not awarded unless misconceived or vexatious claims, or unreasonable conduct

Thank you Daniel Naftalin