A selection of questions our clients have been asking this month

Q. We have a temporary employee with us who we are due to make permanent. We have had an unfavourable reference returned that mentions disciplinary action was taken at her last company. What should we do?

A. It is increasingly commonplace for employers not to disclose this type of information about former employees. However, as you have received this information then you are in a position to look into it further. The first course of action would be to phone the previous employer to see if you can find out more information about the disciplinary action that was taken and how this relates to the context of the job they will be doing in your organisation. After you have found out what information you can then you must make further enquiries with the employee unless the previous employer has asked you not to. If your job offer is subject to satisfactory references then you are able to revoke the offer. In this particular instance the employee has already been working with you for a short while so you are in a better position to make a judgment about the individual. However, in all cases we would advise that you must have very strong factual evidence to turn down a job offer you had made or for dismissing someone who has already started because of an unfavourable reference. If this happens the employee could go after their previous employer for damages hence why so few organisations disclose such information.

Q. Our employees are given 25 days holiday a year plus public holidays. Our company policy says an employee can carry over 5 days holiday from one year to the next. We have an employee going on maternity leave, can we pay her the 25 days holiday she will accrue as she can’t carry over more than 5 days?

A: An employee going on maternity leave will continue to accrue holiday. Statutory holiday i.e. 20 days for a full time employee cannot be paid and must be taken either before or after the employees maternity leave ends. The additional five days which are contractual can be paid up with the employee’s prior agreement.

Q. We have an employee who is going on maternity leave in July. She is in receipt of a car allowance as she uses her own car on company business; do we have to pay this during the maternity leave. She is also paid a bonus based on achieving certain objectives every six months, should she be paid those during her maternity leave?

A. Car allowances have always been problematic! If she had a company car that would be classed as a benefit and she would therefore have the right to keep it during the whole of the maternity period, even though it was provided for business purposes. However, with car allowances, there is no case law on it but the general guidance is that it is treated as wages or salary and therefore you can withdraw it during maternity leave. However, if you are treating it as salary, then you must include it when calculating her maternity pay i.e. the first 6 weeks are paid at 90% of salary. The Higher SMP rate is calculated by using the gross salary that the employee was paid in the 8 weeks up to and including the 15th week before the expected week of child birth (the date on the MATB1), referred to as the “relevant period”. That will include the car allowance and any other payments made during that period, including bonuses.

With regard to the bonus, this is classed as wages or remuneration and she would not be entitled to that, nor would she have been there to earn it, during the maternity leave. However, she would be entitled to a pro-rated amount for the time she was there before she went on maternity leave.

All other contractual benefits i.e. healthcare, gym membership, company pension contributions etc. continue as normal during maternity leave