Contractual payments must be made subject to usual deductions for tax and national insurance. Whereas a genuine ex-gratia payments are not made for work that has been undertaken or for a provision of services or under a contract of employment and are essentially compensation for loss of employment or a “gift” by the employer. Consequently they can be paid free of tax up to £30,000 pursuant to section 403 of the Income Tax (Earnings and Pensions) Act 2003.
Under section 44 of the Employment Rights Act 1996 (“Section 44”) employees have the right not to be subjected to any detriment by their employer where, for example, they do not come to work believing that doing so would place them in serious and imminent danger. Prior to the pandemic Section 44 was infrequently used…Read More