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Chapter S2: JSA & Employed earners

Contents
Earnings of employed earners
S2001:Introduction
S2009:Explanation of terms
S2010:Meaning of employed earner
S2013:Meaning of earnings
S2015:Meaning of derived from
S2016:Meaning of gross earnings
Calculation of net earnings
S2020:Deductions from gross earnings
S2021:Income tax
S2022:NI Contributions
S2023:Occupational or personal pension scheme payments
S2027:Expenses not reimbursed by employer
Treatment of particular kinds of payments from employment
S2037:Introduction
S2040:Accommodation provided by employer
S2041:Actors and entertainers
S2044:Advance of earnings or loans
S2045:Bonus or commission
S2046:Broadcasting and publication fees
S2047:Cash in lieu of concessionary coal
S2048:Directors of limited companies
S2049:Establishing a director's income
S2050:Payments as a director or other employee
S2056:Share dividend
S2057:Debenture interest
S2059:Holiday pay
S2060:Income tax refunds
S2061:Justices of the peace
S2062:Travel allowances
S2063:Subsistence
S2064:Financial loss allowances
S2065:Local authority councillors
S2068:Basic allowance
S2069:Special responsibilities allowance
S2070:Childcare and dependent carers' allowance
S2071:Expenses
S2076:Payments not claimed
S2077:Payments in kind
S2079:Payments in lieu of remuneration
S2080:Payments of expenses
S2083:Retainers
S2084:Service ser groups
S2085:Special occupations
S2087:Auxiliary coastguards
S2088:Part-time members of a fire brigade
S2089:Part-time crewing or launching of a lifeboat
S2090:Territorial army or volunteer reservists
S2093:Tips
S2094:Vouchers and child care cheques
Earnings disregards
S2097:Introduction
S2115:Special occupations
S2117:Territorial army or volunteer reservists
S2123:Earnings from one or more occupations
S2129:Other cases
S2130:Earnings paid for employment which has been interrupted
S2132:Earnings payable outside United Kingdom
S2133:Earnings paid in a foreign currency
Employment and training schemes
S2150:General

Work based learning - Skill Build and Training for Work (Wales & Scotland)S2155
S2157:Employment rehabilitation programmes
S2159:Work based Training for Young People and Modern Apprenticeships
Notional earnings
S2180:General
S2186:Remunerative work
S2187:Meaning of voluntary organization
S2188:Meaning of person
S2189:Performance of a service
S2191:Details of the service performed
S2195:When earnings are not to be treated as paid
S2196:Meaning of volunteer
S2198:Time exchange schemes
S2199:Is it reasonable
S2200:Carers
S2202:Fine payment work - England and Wales
S2204:Supervised Attendance Orders - Scotland
S2210:Calculation of gross notional earnings
S2211:Meaning of in the area
S2212:Comparable employment
S2215:Payments in kind
S2216:Are earnings to be treated as paid
S2217:Reasonable rates of pay
S2219:Can the person afford to pay
S2225:Amount to be taken into account
S2227:Deduction for notional income tax
S2229:Deduction for notional NI contribution
S2233:Onus of proof
S2234:Earnings due but not paid
Employment protection legislation
S2300:Introduction
S2302:Types of payments
S2303:Treatment of payments
S2305:When payments are due to be paid
Statutory guarantee payments
S2314:General
S2317:Employees who do not qualify
S2319:Calculation
S2320:Employees not entitled
S2321:Payments not made by employer
S2323:Complaints to a tribunal
S2326:Effect of statutory guarantee payments
Collective agreements
S2335:Introduction
S2338:Terms of an agreement
S2343:Changes to agreements
S2347:Whether agreement effective
S2351:Suspension of agreement
S2359:Exemption orders
S2361:Application of exemption orders
S2364:Payment of wages guaranteed
S2368:Calculation
S2369:Effect of guaranteed wages payments
S2371:Work guaranteed
S2381:Short time working instead of redundancy
S2384:Approved short time
S2385:Night workers
S2386:Effect of holidays
S2389:Effect of guaranteed work
Suspension from work on medical or maternity grounds
S2395:General
S2397:Employees not entitled to be paid
S2399:Calculation of pay
S2400:Complaints to a tribunal
Compensation for unfair dismissal
S2405:Introduction
S2409:Interim relief
S2410:Amount of awards
S2414:Period of awards
S2417:Effect of awards
S2419:Employer insolvent
Protective awards
S2422:Introduction
S2425:Terms of an award
S2427:Payments not made by employer
S2428:Protective award not applied for
S2429:Effect of payments
Time of work provisions
S2440:General
S2451:Complaints to a tribunal
Payments on termination of employment
S2500:Introduction
S2503:Types of payments
S2504:Payments for period before employment ended
S2505:Holiday pay
S2506:Statutory redundancy payments
S2509:Payments in kind
S2510:Employment never existed
S2515:Payments not received
S2518:Delay in payment
S2519:Employer withholds payment
S2521:Uncashed cheques
S2522:British Telecom Newstart Scheme
S2523:Whether employment has terminated
S2525:Recognised, customary or other holidays
S2528:Meaning of terminated
S2534:Contract terminated immediately before period of absence from work
S2535:Employment suspended
S2537:Employment resumed
S2540:Teachers
S2545:Sessional or temporary teachers
S2549:Supply teachers

Whether a supply teacher's employment has terminated during a school closure
S2555:
S2560:Maternity leave and absence
S2566:Suspension on maternity grounds
S2568:Claims within 29 weeks of child-birth
S2571:Adoption leave
Paternity leave
S2575:Ordinary paternity leave
S2576:Additional paternity leave
S2577:Agreement not to work notice
Payments on termination
S2630:Meaning of compensation payment
S2632:Effect of compensation payments
S2634:Remunerative work
S2636:Part-time work
S2639:Payment by someone other than the employer
S2640:Remuneration for period before employment ended
S2642:Remunerative work
S2644:Part-time work
S2651:Emoluments
Holiday pay
S2652:Employment terminated
S2654:Remunerative work
S2656:Part-time work
S2657:Mariners
S2660:Employment interrupted
S2661:Remunerative work
S2662:Part-time work
S2664:Statutory redundancy payments
S2667:Payments in kind
S2672:Bonus payments
S2675:Calculation of period compensation payment taken into account
S2678:When period ends -summary
S2683:Maximum period
The expiry date
S2685:Meaning of the expiry date
S2686:Meaning of period of notice

Entitlement to notice
S2687:Contractual and statutory entitlement differs
S2688:Statutory right to minimum period
S2693:Contractual entitlement
S2699:Employment terminated by employee
S2700:Employment terminated by mutual agreement
S2701:Employee dismissed for conduct
S2704:Notice customary in the employment
S2706:Civil servants
S2710:Payment made for a period longer than notice period
S2713:Payment made for a period shorter than notice period
S2714:Fixed term contracts
S2718:Date on which notice given
S2719:Receipt of notice
S2722:Notice
S2725:Calculation of date notice runs out
S2727:Notice to operate from a future date
S2729:Notice shortened or extended
S2732:Waiver of notice
S2733:Calculation of date notice would have run out
S2740:Payment for consultation period in employment protection law
S2743:Calculation of period
S2744:Date consultation period would have ended
S2750:The standard date - other cases
S2751:Meaning of the standard date
S2752:Employee works out notice due from employer
S2755:No notice due
S2760:Calculation of period - the set formula
S2761:Amount of compensation
S2763:Maximum weekly amount
S2765:Number of weeks
S2766:Last day of the period
S2767:Standard date
S2768:Calculation of period for JSA - flowchart
The calculation and treatment of earnings
S2769:Introduction
S2770:Disregard of fractions
Period over which earnings are taken into account
S2771:Calculating the period
S2774:Date on which earnings are due to be paid
S2777:Earnings when employment ends
S2778:Notice given and worked
S2780:Employment terminated by employer without notice
S2781:Employment terminated by employee without notice
S2782:Date on which earnings are treated as paid
S2783:Earnings due before the first benefit week of the claim
S2784:Earnings due in or after the first benefit week of the claim
S2787:Treatment of arrears of earnings
S2788:Arrears paid on due date
S2789:Arrears paid after the due date
S2790:Meaning of benefit week
Period for which payment is made
S2791:Identifiable period
S2792:Employer's pay arrangements
S2793:Supply teachers
S2794:Territorial army or volunteer reservists
S2796:No identifiable period
S2798:Different kinds of earnings received for overlapping periods
Calculation of weekly amount
S2799:Period of a week or less
S2800:Period of a month
S2801:Period of three months
S2802:Period of a year
S2803:Period of more than a week
Calculation of amount where only part of a payment overlaps benefit weekS (28)04 Modifying the amount taken into account
Two payments from same source and of same kind in same benefit week S2806
Two payments taken into account for same week because of impracticability rule
S2807:
S2808:First of two payments due before date of claim
S2811:Averaging of amounts

Territorial or reserve forces ................................................................ Appendix 1
Maximum weekly amount ................................................................... Appendix 2
Statutory guarantee payments ........................................................... Appendix 3

Chapter S2: JSA & Employed earners

Earnings of employed earners

S2001 Introduction

This Chapter deals with the calculation and treatment of payments made to
employed earners. These will usually be earnings paid by an employer, but may be
other types of payment.

S2002

How payments made to employees affect an award for JSA will depend on
1. whether the work is continuing
2. whether the work has ended.

S2003

Earnings include notional earnings (1).
1 JSA Regs 13, reg 50 & regs 53 - 63

[S2004-S2008]

S2009 Explanation of terms

In this guidance the following terms are defined.

S2010 Meaning of employed earner

The term employed earner means (1) a person who is gainfully employed in GB
1. under a contract of service or
2. in an office (including an elective office) with general earnings (2).
1 JS Act 95, s 35(1), JSA Regs 13, reg 2(1) & SS CB Act 92, s 2(1)(a);

2 Income Tax (Earnings and Pensions) Act 2003, s 7(3)

S2011

Employed earners who are gainfully employed under a contract of service include
employees who work for a wage or salary.

S2012

The phrase "in an office" includes directors of limited companies, clergy, LA
councillors, MPs and sub-postmasters and mistresses. General earnings include
any wage, salary, fee, gratuity, profit or incidental benefit (1).
1 Income Tax (Earnings and Pensions) Act 2003, s 7(3) & s 62

S2013 Meaning of earnings S2037 S2303

Earnings means any pay or profit derived from employment and includes (1)
1. bonus or commission (see S2045)
2. PILOR (see S2079)
3. PILON and certain compensation payments made by the employer because
the employment has ended (see S2500 et seq)
4. holiday pay (see S2059), but not where it is payable more than four weeks
after the employment ended, or was interrupted
5. retainers (see S2083)
6. payment made by the employer for expenses which are not wholly,
exclusively and necessarily incurred in the performance of the duties of the
employment, including any payment made by the employer for
6.1 the employee's travelling expenses between home and work (but see S2065 et seq for councillors) or
6.2 any expenses that the employee may have for the care of a family
member while the employee is at work (see S2080)
7. Employment Protection awards (2) (see S2300 et seq)
8. awards of compensation made under TU legislation (3) (see S2314 and S2335).
9. any payment made by a non-cash voucher that has been taken into account
as earnings for the purposes of working out the amount of social security
contributions to deduct (4) (see S2094).
This list is not exhaustive. See S2037 - S2096 for more examples of what are and
what are not earnings.
1 JSA Regs 13, reg 58(1); 2 ER Act 96, s 55(4), 68 & 69, 70(1)-(3), 77 & 79, 92(6), 112(3) & (4),

113, 121(a), 128, 132; 3 TULR (C) Act 92, s 156, 157, 189 & 192; 4 JSA Regs 13, reg 58(1)(i)

S2014 S2015 S2086 S2630

Earnings do not include
1. payments in kind (1) (see S2077)
2. periodic payments made because employment has ended through
redundancy (2)
3. payments made for periods when an employee is on maternity leave,
paternity leave, adoption leave, or is away from work due to illness (3) (see S2130)
4. payments by an employer for expenses wholly, exclusively and necessarily
incurred in the performance of the employment (4) (see S2027)
5. payments of occupational pension (5)
6. redundancy payments (6) (see S2506)
7. any lump sum payments received under the Iron and Steel Re-adaption
Benefits Scheme (7)
8. any payment of expenses paid to the claimant as a result of participating as a
service user (8) (see S2084)
9. a bounty paid at intervals of at least one year and derived from service in a
special occupation (9) (see S2086)
1 JSA Regs 13, reg 58(2)(a); 2 reg 58(2)(b); 3 reg 58(2)(c); 4 reg 58(2)(d); 5 reg 58(2)(e);
6 ER Act 96, s 135; JSA Regs 13, reg 58(2)(f); 7 reg 58(2)(g); 8 reg 58(2)(h); 9 reg 58(2)(i)

S2015 Meaning of derived from

The words "derived from" mean having their origins in (1). Payments made for past or
present employment should be treated as earnings, unless they are excluded under
S2014. Work out the period for which earnings are to be taken into account before
deciding the claim (see S2769 et seq).
1 R(SB) 21/86

S2016 Meaning of gross earnings

Gross earnings means the amount of earnings
1. after the deduction of expenses wholly, exclusively and necessarily incurred
in the performance of the employment (1) (see S2027) but
2. before any authorized deductions are made by the employer. These may include
2.1 income tax
2.2 pensions contributions
2.3 NI contributions
2.4 TU subscriptions
2.5 payments under a court order
2.6
recovery of any debt.
Note: Where an overpayment of wages is being recovered by means of deductions
from the earnings to be taken into account, the DM should not include the amount
being recovered to repay the overpayment as part of the gross amount of those
earnings (2).
1 R(FC) 1/90 & R(IS) 16/93; 2 R(TC) 2/03

[S2017-S2019]

Calculation of net earnings

S2020 Deductions from gross earnings S2075

Net earnings are gross earnings less (1)
1. income tax and
2. Class 1 NI contributions and
3. half of any sum paid by the employee, towards an occupational or personal
pension scheme.
1 JSA Regs 13, reg 59(3)

S2021 Income tax

Deduct from gross earnings any income tax deducted by the employer.

S2022 NI contributions

Reduce gross earnings by any Class 1 contribution deducted by the employer.

S2023 Occupational or personal pension scheme payments S2075

Deduct from the employee's gross earnings for a normal pay period one half of any
amount which
1. a person pays into an occupational pension scheme for that period or
2. is deducted by the employer from a payment of earnings as a contribution to
an occupational pension scheme for that period or
3. a person contributes towards a personal pension scheme for that period.

Example

Patricia earns 50 a week and is paid weekly. She pays 26 a month into a
personal pension scheme. Her normal pay period is a week. Her pension
contribution is changed into a weekly figure (26 x 12 52 = 6 pw) and half of this
weekly figure (6 2 = 3) is deducted from her gross weekly earnings (50 - 3 =
47).

S2024

Occupational pension schemes (1) are arrangements by which an employer provides
benefits for employees based on service. The benefits may be provided by the
employer or through a pension provider. Benefits are
1. normally in the form of a pension, all or part of which may be taken as a lump sum
2. payable on death or retirement.

1 JS Act 95, s 35(1); PS Act 93, s 1; SS Act 86, s 84(1)

S2025

Personal pension schemes (1) are arrangements between employees, or S/E earners,
and pension providers such as insurance companies. They provide benefits
independently of any employer (although an employer may still make contributions
to such a scheme). Benefits are payable as annuities which may provide lump sum
and pension payments payable on death or retirement.

1 JS Act 95, s 35(1); PS Act 93, s 1; SS Act 86, s 84(1)

S2026

Where a person pays contributions into both an occupational and a personal
pension scheme, the deduction from gross earnings should be one half of the total
payments made for the pay period (1).
1 R(FC) 1/90

S2027 Expenses not reimbursed by employer S2014 S2016 S2028 S2030 S2072

An expense that is not repaid to an employee by the employer should be deducted
from earnings if it is incurred in the performance of the duties of the employment
and is wholly, exclusively and necessarily incurred (1).

1 R(IS) 16/93

S2028

Examples of expenses for which deductions may be made under S2027 are
1. equipment, tools and stationery
2. overalls and specialist clothing
3. telephone calls made entirely for work purposes
4. travelling costs between different work places and any accommodation costs
involved.

S2029 S2075

The expense must be incurred in direct connection with the employer's trade or
business (1). If there is some element of private use, for example telephone bills, that
part of the bill for business use should be allowed. Any decision by HMRC on the
apportionment of expenses may be taken into account as evidence. If there is no
doubt, that decision can normally be followed (2).

1 Davies v. Gwaun Cae Gurwen Colliery (1924) 2K8 651; Borley v. Ockended (1925) 2K8 325; 2 R(IS) 16/93

S2030 S2075

An expense that is in the employee's own interest or benefit, or which merely
enables the employee to go to work would not satisfy the test in S2027. Child
minding expenses (1), and the cost of travel to a single place of work, are examples of
expenses that would not satisfy the test.

1 R(FC) 1/90

S2031

See S2062 and S2071 if the claimant is a Justice of the Peace or a councillor. See S2080 for more guidance on the general question of expenses.

[S2032-S2036]

Treatment of particular kinds of payments from employment

S2037 Introduction S2013

The law (1) gives some examples of what earnings can include (see S2013). But,
there are other payments that count as earnings. Guidance on other types of
earnings paid during a period of employment is in S2040 - S2096.
1 JSA Regs 13, reg 58(1)

[S2038-S2039]

S2040 Accommodation provided by employer S2037

The value of free accommodation provided by an employer, for example to a
housekeeper or caretaker, should be ignored. Where no other payment is made to
the employee, or any payment being made seems too low, the DM should consider
whether to treat the claimant as having earnings or greater earnings (see S2180 et
seq).

S2041 Actors and entertainers

DMs must consider claims from actors and other entertainers in the same way as
any other claimants. Each case must be decided on its own merits. The DM should
decide whether a claimant's earnings are from employment as a S/E earner or
employment as an employed earner.

S2042

In general, because of the nature of an actor's or entertainer's employment, the DM
may find that their earnings are from employment as a S/E earner. However, it is
possible for an entertainer whose general pattern of employment is that of a S/E
earner, to have periods of employment as an employed earner at the same time as
his overall self-employment.

S2043

The fact that an actor or entertainer has periods of employment during which class 1
National Insurance contributions are payable is not conclusive when deciding
whether that employment is as an employed earner. It is for the DM deciding the
claim to JSA to decide whether earnings are from employment as an employed
earner or from self-employment. Where an entertainer whose general pattern of
employment is that of a S/E earner contends that certain engagements were as an
employed earner and that class 1 contributions were paid it will be for the DM to
decide whether the claimant was employed under a contract of service or otherwise.

Example

Laura is an actress. She makes a claim for JSA because she has left her partner
who was in F/T employment. Her acting engagements are sporadic, and she is not
currently working. She continues to look for work and remains on her agent's books.
She has been booked for some future engagements, but nothing substantial, and
has not worked for several weeks. She says that she could find more substantial
acting work at any time, that being the nature of work. In the year prior to the current
claim, the claimant has had a number of engagements in advertising and the theatre
as well as three separate, short term, engagements with the BBC to appear in three
separate dramatic productions. Her most substantial earnings were derived from
these engagements with the BBC. She states that she was actually employed by the
BBC under a contract of service and says that the fact that she paid class 1
contributions supports this contention. As such she argues that her earnings from
the BBC should not be included when working out her earnings from self-
employment. The DM
1. decides that the claimant is gainfully employed as a S/E earner (see ADM
Chapter S3)
2. considers the terms under which the claimant was engaged by the BBC and
decides that as she was engaged to perform a specific role on particular
occasions for a fixed fee, she was employed under a contract for services and
as such the earnings fell to be taken into account with her other earnings from
self-employment
3. decides that the sporadic nature of the employment is the normal pattern of
the business and calculates her average weekly earnings over the preceding
year.

S2044 Advance of earnings or loans

Earnings should be taken into account from the date they are treated as paid (1). This
is based on when they are due to be paid. If they are paid before the due date,
ignore any amount paid until the due date arrives. Then take the amount properly
due into account as normal from that date. Any other loan made by the employer
should not be treated as earnings.
1 JSA Regs 13, reg 54(2) & 56

Example

Cameron earns 50 a week which is due to be paid every 4th Friday. He was last
paid 200 on 8 November. On 18 November, he gets an advance of 100 from his
employer. The 100 is treated as capital. The full 200 due to be paid on 6
December is then taken into account (6 December to 2 January = 4 weeks x 50).

S2045 Bonus or commission S2013

Payments of bonus or commission should be treated as earnings (1).
1 JSA Regs 13, reg 58(1)(a)

S2046 Broadcasting and publication fees

Fees and royalties should be treated as earnings, no matter how often or
infrequently they are paid. They can be for employment or self employment (see
ADM Chapter S3) and include payments for
1. taking part in radio or television plays, commercials and documentaries
2. repeat showings of plays, commercials and documentaries
3. interviews with press reporters
4. published items.

S2047 Cash in lieu of concessionary coal

Employees of UK Coal who live in property where solid fuel cannot be used, may
receive a cash payment instead of an agreed amount of coal (concessionary coal).
Payments made instead of it should be treated as earnings (1).
1 R(SB) 2/86

S2048 Directors of limited companies

A limited company, of whatever size, is separate from its employees and
shareholders (1). This means that the profits of the company do not belong to the
directors. A director of a limited company is an office holder in the company, and is
an employed earner.
1 R(SB) 57/83

S2049 Establishing a director's income

The income of a director can include
1. payments for services as a director or any other employment with the company
2. share dividend
3. debenture interest.

S2050 Payments as a director or other employee

Directors have no legal right to receive payment for their services as a director, but
can still be voted payment. Or they may be entitled to payments under the
company's Articles of Association. Any payments voted to a director or to which they
are so entitled should be taken into account as earnings.

S2051

A director may also be employed by the company for another reason, for example
as a sales manager. Such a person has a contract of employment with the company
and is entitled to a salary. Any salary should be taken into account as earnings.

S2052

If a director in a small company does no other work in it, the services provided will
be limited and the amount of payment expected will be small. If the director also
does other work in the company, then more payment will be expected.

S2053

Many small companies operate with only two directors, for example the claimant
and partner. Such companies normally obtain contracts and pay employees a salary
for work done. Any earnings paid to the claimant will usually be for work done as an
employee of the company.

S2054

Directors may leave earnings that they are entitled to in a company bank account. If
the director is free to draw on the account at any time, the money is actual income.
It should be taken into account as actual earnings. If it is not paid to the director, or
the director cannot draw it out of the account, it is a debt due. This should be taken
into account as income due but not paid (1).

1 JSA Regs 13, reg 63(1)

S2055

If a director of a small company is not voted any payment, the DM should consider
whether the director should be treated as having earnings (see S2180 et seq). In
doing so, the DM should consider whether the company can afford to pay the
director.

S2056 Share dividend

Share dividend is income from capital and does not fall to be treated as earnings.

S2057 Debenture interest

Directors may have debentures in a company. Debentures are a type of loan capital.
Debenture holders are entitled to a fixed rate of interest. The interest is payable
whether the company makes a profit or not. The interest payments are not
payments of earnings.

S2058

S2059 Holiday pay S2013

Any holiday pay that is payable within four weeks of the date employment ended, or
was interrupted, should be treated as earnings (1). If it is payable more than four
weeks after the employment has ended, or been interrupted, it is not earnings.
Guidance on the effects of holiday pay paid on termination of employment is given
at S2652.
1 JSA Regs 13, reg 58(1)(c)

S2060 Income tax refunds S2503

Earnings of employed earners are taxed under the PAYE scheme by direct
deduction from wages or salary. Any refunds of income tax do not fall to be treated
as earnings.

S2061 Justices of the Peace

Those who are employed as magistrates are referred to as District Judges
(Magistrates' Court) and were previously known as stipendiary magistrates. In
connection with their duties lay Justices of the Peace, sometimes known as
volunteer magistrates, may receive
1. travel allowances (1)
2. subsistence (2)
3. financial loss allowances (3).
1 Courts Act 2003, s 15(1)(a); 2 s 15(1)(b); 3 s 15(1)(c)

S2062 Travel allowances S2031

Travel allowances incurred wholly, exclusively and necessarily in the performance of
the lay Justice of the Peace's duties do not count as earnings (1).
1 JSA Regs 13, reg 58(2)(d)

S2063 Subsistence

Payments of subsistence do not count as earnings (1).
1 JSA Regs 13, reg 58(2)(d)

S2064 Financial loss allowances

Financial loss allowances are paid to compensate lay Justices of the Peace for
specific losses and other expenses that they incur. Allowances are paid for
1. loss of earnings
2. loss of SS benefits
3. other expenses that are incurred wholly, exclusively and necessarily in the
performance of the Justices of the Peace's duties.
Payments for
1. fall to be treated as earnings (1). Payments for 2. and 3. do not count
as earnings.
1 JSA Regs 13, reg 58(1)

S2065 Local authority councillors S2013

Councillors are
1. in England and Wales, a member of
1.1
a London borough council or
1.2
a county council or
1.3
a district council or
1.4
a parish or community council or
1.5
the Common Council of the City of London or
1.6
the Council of the Isles of Scilly
2. in Scotland, a member of a council for a local government area (1).

1 Local Government etc (Scotland) Act 1994, s 2

S2066

LA councillors are elected office holders and are employed earners (1). The official
duties and responsibilities of a councillor will vary from LA to LA. Each LA must
draw up a scheme (2) for payment of allowances to councillors. This will give
information on the official duties of its councillors and the allowances paid for those
duties. The official duties may include attendance at
1. a meeting of the authority and
2. a sub-committee of the authority and
3. a meeting for any other body to which the authority makes appointments and
4. other meetings authorized by the authority.
1 R(IS) 6/92; 2 Local Authorities (Members' Allowances) (England) Regulations 2003,

reg 4 & Local Authorities (Allowances for Members) (Wales) Regulations 2007, reg 5

S2067

The allowances paid for official duties may include
1. basic allowance
2. special responsibilities allowance
3. childcare and dependent carers' allowance
4. travel and subsistence allowances.
Expenses incurred in the performance of the councillor's duties may be deducted
from the allowances that are paid (see S2071 et seq).

S2068 Basic allowance

The basic allowance is paid at a flat rate and can be paid in a lump sum or by
instalments. The basic allowance is earnings and is payable to all councillors
1. for the time they devote to their work and
2. to cover costs for which no other payment is made, for example, the use of a
councillor's home and telephone. The amount actually used for expenses will
vary in each case.

S2069 Special responsibilities allowance

Councillors with significant extra responsibilities, for example the leader of a council,
can receive an additional allowance. The amount, and how it is paid, is decided by
the LA, but it will usually be paid quarterly. It should be treated as earnings.

S2070 Childcare and dependent carers' allowance

LAs may pay a childcare and dependent carers' allowance to those councillors who
incur expenditure for the care of their children or dependent relatives whilst
undertaking various duties as a councillor. It should be treated as earnings (1).
1 JSA Regs 13, reg 58(1)(e)

S2071 Expenses S2031 S2067 S2072 S2075

The DM should disregard any reimbursement to the councillor by the LA, for
expenses that were wholly, exclusively and necessarily incurred in the performance
of the councillor's duties (1), for example travel and subsistence allowances (2). If the LA
cannot say how much of any payment is for expenses, ask the councillor for details.
Evidence from the councillor should normally be accepted. If the councillor has an
income tax assessment, take this into account.

1 JSA Regs 13, reg 58(2)(d); 2 R(IS) 6/92

S2072 S2074

After expenses in S2071 have been disregarded, the DM should deduct any
expenses that are wholly, exclusively and necessarily incurred in the performance of
the councillor's duties that are not reimbursed to them by the LA (see S2027). The
councillor must justify the amount of each expense, and the amount of expense
incurred should be no more than necessary to satisfy the minimum acceptable
standard from someone in the councillor's position.

Example

Sharon attends three school summer fairs, in her capacity as a LA councillor. At
each one she donates a small gift for a raffle. She provides evidence of her
allowance for the month of July, and claims the amount she spent on the gifts as an
expense. The DM decides that such an expense is no more than the necessary
minimum from a person in the claimant's position, and decides that the expense
was wholly, exclusively and necessarily incurred in the performance of her duties as
a councillor.

S2073

The DM should
1. add together all of the allowances that are paid and
2. deduct any expenses that are wholly, exclusively and necessarily incurred in
the performance of the councillor's official duties (1).

1 JSA Regs 13, reg 58(2)(d); R(IS) 16/93

S2074

For the purposes of S2072, if the expenses are wholly, necessarily and exclusively
incurred in the performance of constituency work, those expenses should only be
deducted from the basic allowance. This is because this allowance is paid to every
councillor and not for any specific duties.

S2075

Examples of the treatment of certain expenses are as follows
1. Postage and stationery expenses that arise from the role of being a councillor
rather than official duties should only be deducted from the basic allowance.
2. Secretarial expenses should only be deducted from the basic allowance.
3. Dependants' care costs cannot be deducted as an expense. This is because
they are expenses incurred in order to enable councillors to perform their
duties rather than necessary for the performance of them.
4. Clothing and footwear expenses wholly, exclusively and necessarily incurred
in the performance of a councillor's duties should be deducted from the basic
allowance. The amount of expense incurred in any week cannot always be
calculated only by reference to the price paid in any week. A longer term view
may be necessary to establish the actual expenditure incurred. This may
involve determining or estimating how much of the use was, is or will be
council use rather than private or other use. DMs may need to apply averages
and estimates over a period to calculate a weekly deduction.
5. Travelling expenses should be disregarded from the basic allowance unless
they are covered by the travel allowance which is already disregarded (see S2071). This is different to the normal treatment of travelling expenses (see S2030). When councillors travel from home to the council office or any other
work place, for example surgeries, and governor's meetings it is not just
travelling to work it is part of the work itself.
6. Subscriptions to trade unions or other political or professional bodies such as
the Association of Labour Councillors should be deducted from the basic
allowance.
7. Additional costs incurred because of the use of the home as an office, for
example heating and lighting should be deducted as an expense from the
basic allowance (see S2029). The DM should establish what proportion of the
total household bill can be regarded as arising from the councillor's work.
Unless the DM is considering a past period, the cost of expenses such as
heating and lighting may not be known until some time in the future. In
these circumstances an estimated figure should be agreed with the claimant
taking account of any relevant evidence.
8. Pension contributions are not an expense. But, one half of any sum paid by
the councillor towards an occupational or personal pension can be deducted
from the gross earnings (see S2020 and S2023).

S2076 Payments not claimed

Councillors are entitled to allowances whether they are claimed or not (1). If a
councillor has not been paid an allowance and payment could be expected, the DM
should consider taking notional earnings into account (2).
1 R(S) 6/86; 2 JSA Regs 13, reg 63(1)

S2077 Payments in kind S2014

A payment in kind, for example free accommodation, should not be treated as
earnings (1). Where wages are paid at a reduced rate because of the payment in kind,
consider notional earnings (see S2180 et seq).

1 JSA Regs 13, reg 58(2)(a)

S2078 S2630

Payments in kind do not include any payment by non-cash voucher if it has been
taken into account as earnings of an employed earner (see S2094).

S2079 Payments in lieu of remuneration S2013

Payments made in lieu of remuneration are paid in place of a person's normal
wages or salary. Payments made to Justices of the Peace and LA councillors for
loss of earnings are examples of such payments. Employment Tribunal
compensation awards for a past employment and awards made under sex and race
discrimination law can also be PILORs. Payments made in lieu of remuneration are
earnings (1).
1 JSA Regs 13, reg 58(1); R(SB) 21/86

S2080 Payments of expenses S2013 S2031

Payments made by an employer for expenses which are not wholly, exclusively and
necessarily incurred in the performance of the duties of the employment are
earnings (1). These can include
1. payments for travelling expenses between home and work
2. expenses for the care of a member of the claimant's family
3. school fees for a claimant's child
4. child care costs.

1 JSA Regs 13, reg 58(1)(e)

S2081

Payments made by an employer for expenses which are wholly, exclusively and
necessarily incurred in the performance of the duties of the employment are not
earnings (1). These can include
1. payments made for travelling expenses and overnight accommodation so that
the employee can attend a meeting
2. a mileage allowance to run a car for business purposes.

1 JSA Regs 13, reg 58(2)(d); R(FIS) 4/85

S2082

An employer may pay for an expense from which the employee gets some private
benefit. If so, divide the payment into private and business use. The part of the
payment for private use is earnings (1). The rest, which is for business use, is wholly,
exclusively and necessarily incurred, and is not earnings.
1 R(IS) 16/93

Example

Winston uses his own private telephone for work purposes. His employer pays the
standing and rental charges for the telephone and 50% of the calls. This is because
Winston also uses the phone for personal calls, and 50% of the calls made are
personal. The DM decides that 50% of the amount paid by the employer for the
standing and rental charges is an expense wholly, exclusively and necessarily
incurred. The remaining 50% is for Winston's personal use and so is earnings. The
amount paid by the employer for calls is wholly, exclusively and necessarily incurred
and is not earnings.

S2083 Retainers S2013

Retainers (1) are payments made for a period when no actual work is done, for
example to employees of school meals services during the school holidays. These
should be treated as earnings and should not be disregarded. Retainer payments
include (2)
1. statutory guarantee
payments
and
2. payments made where a claimant has been suspended on medical or
maternity grounds.
1 JSA Regs 13, reg 58(1)(d); 2 JSA Regs 13, Sch , para 1

S2084 Service user groups S2014

Payments other than expenses received for participating as a service user should
be treated as earnings for and be attributed in the usual way with the appropriate
weekly disregards (1). A service user is (2)
1. a person who is being consulted by or on behalf of
1.1 a body which has a statutory duty to provide services in the field of
1.1.a
health or
1.1.b
social care or
1.1.c
social housing or
1.2 a body which conducts research or undertakes monitoring for the
purpose of planning or improving the services in 1.1
in their capacity as a user, potential user, carer of a user or a person affected by
those services or
2. the carer of a person consulted under 1..
Note: DMs will also need to consider whether the remunerative work rule applies
(see ADM Chapter R2).
1 JSA Regs 13, reg 58(1); 2 reg 3(6)

Example

Jenny is in receipt of JSA. She is involved in a tenants association which discusses
LA housing issues. In return for attending the meetings, Jenny receives 20 from
the LA. The DM decides that the payment is a payment of earnings and falls to be
taken into account when calculating Jenny's entitlement to JSA. The payment is
subject to the normal weekly earnings disregards.

S2085 Single status payments

A payment which is made to a person to redress past pay inequalities is a payment
of earnings (1) and may have to be taken into account if that person is still working for
that employer. These payments are sometimes called "single status payments" but
may be called something else.
1 JSA Regs 13, reg 58(1); Minter v. Kingston Upon Hull City Council [2011] Civ 1155

Example

Anna is in receipt of JSA of 40 per week because she works part-time for the local
council and her earnings are taken into account. She has been offered a payment
by her employer to redress historical pay inequalities between female and male
employees. Anna's employer offers her a payment of 7,200. This is paid to Anna
with her salary and the DM treats it as a payment of earnings.

S2086 Special occupations S2014 S2098 S2115

Some occupations are known as special occupations. These are service as
1. a P/T fire-fighter in a fire brigade maintained under relevant legislation (1)
2. a P/T fire-fighter employed by a fire and rescue authority
3. a P/T fire-fighter employed by the Scottish Fire and Rescue Service
4. an auxiliary coastguard in respect of coastal rescue services
5. a person engaged in P/T work manning or launching a lifeboat
6. a member of the territorial or reserve forces (2) (see Appendix 1 to this
Chapter).
1 Fire and Rescue Services Act 2004;
2 SS (Contributions) Regs 2001, Sch 6, Part 1
People in special occupations may receive a bounty payment for their services. S2014 provides guidance on the treatment of the bounty.

S2087 Auxiliary coastguards

Payments received for watch keeping duties should be treated as earnings.
Payments for expenses of coastal rescue activities should also be treated as
earnings, unless they were wholly, exclusively and necessarily incurred in the
performance of the coastguard's duties.

S2088 Part-time members of a fire brigade

Payments for drills, services or retaining fees, should be treated as earnings.
Payments for expenses should also be treated as earnings if they were not wholly,
exclusively and necessarily incurred in the performance of the duties.

S2089 Part-time crewing or launching of a lifeboat

Treat payments for drills, services or retaining fees, as earnings. Payments for
expenses should also be treated as earnings, unless they are wholly, exclusively
and necessarily incurred in the performance of the duties.

S2090 Territorial army or volunteer reservists

Members of the Territorial Army or Royal Navy/Royal Air Force volunteer forces
may receive a training expenses allowance, paid at a flat rate. The allowance is for
meals and other incidental expenses while on duty. It is not for expenses wholly,
exclusively and necessarily incurred in the performance of the duties and should be
treated as earnings.

S2091

Payments for travelling expenses between the volunteer's home and place of duty,
for example the drill hall, are also not wholly, exclusively and necessarily incurred.
Such payments should be treated as earnings (1).

1 JSA Regs 13, reg 58(1)(e)(i)

S2092

Treat other payments, for example drill night pay, as earnings, unless they are for
an item wholly, exclusively and necessarily incurred in the performance of the
duties.

S2093 Tips S2509

Tips are expected in some jobs, for example hairdressers, waiters and bar staff.
They may be made because of the services rendered by the employee in the course
of the employment. The average weekly amount of any such tips received should be
included in the calculation of earnings. Do not include tips made as gifts on grounds
that are personal to the recipient and unconnected with the employment.

S2094 Vouchers and child care cheques S2013 S2078 S2096

An employee may receive vouchers instead of, or as well as, earnings. These can include
1. luncheon vouchers
2. child care vouchers
3. child care cheques.

S2095

Earnings of an employed earner include the amount for any payment made by a
non-cash voucher that has been taken into account as earnings for the purposes of
working out the amount of NI contributions to deduct (1).
Note:
The amount taken into account as earnings for SS purposes may be equal, or
be more or less than, the face value of the voucher.

1 JSA Regs 13, reg 58(1)(i)

S2096 S2013 S2037

Payments in kind are not normally taken into account as earnings of an employed
earner. Payments in kind do not include any non-cash voucher if it has been taken
into account as earnings of an employed earner (1). (see S2094).
1 JSA Regs 13, reg 58(3)
Earnings disregards

S2097 Introduction S2151

Net earnings should be taken into account less any disregard. The amount of
disregard will depend on whether the earnings are from work in a special
occupation.

S2098

Disregard 5 from the claimant's earnings unless the claimant is in a special
occupation (see S2086) or is a share fisherman (see ADM Chapter S3)1. In such
cases disregard the claimant's earnings up to a maximum of 202.
1 JSA Regs 13, Sch , paras 5 & 6; reg 73; 2 Sch 6, para 7 & reg 73

[S2099-S2114]

S2115 Special occupations S2129

A disregard of 20 can normally be allowed on earnings from special occupations (1)
(see S2086). This is one of the disregards that can apply when considering the
amount of JSA payable. See S2117 for the exception to this rule.
1 JSA Regs 13, Sch, para 6

S2116

S2117 Territorial Army or volunteer reservists S2115

Members of the territorial or reserve forces (see Appendix 1 to this Chapter) may
attend an annual training camp (known as "annual continuous training") which can
last for up to 15 days. Payment in respect of the time at camp is taken into account
as earnings but there is a specific disregard (1).

1 JSA Regs, Sch, para 12(2)

S2118

Any earnings in respect of attendance at annual continuous training, in aggregate
with any other earnings that the claimant may have, are disregarded to the extent of
1. the claimant's personal rate of JSA less
2. ten pence (1).
1 JSA Regs 13, Sch, para 12(1) & (3)

Example

On 29.9.13 Jane receives a payment of 532 from the Territorial Army in respect of
the time spent away training at camp. She was at camp for 15 days from 2.9.13 to
16.9.13. Her personal rate for JSA is 71.
The DM decides that the payment in respect of time spent at camp
1. is taken into account, subject to the appropriate disregards
2. is to be treated as paid on 26.9.13 because that is the first day of the benefit
week in which it is received
3. is attributed for a period of 14 days because it is payment specifically in
respect of duties performed at a camp lasting in excess of 14 days. It is
therefore taken into account from 26.9.13 to 9.10.13
4. that the weekly amount of the payment is determined to be 248.26
5. for the weeks ending 2.10.13 and 9.10.13 only 70.90 of the earnings are
taken into account. This is because this is the amount of Jane's personal rate
less 10 pence.
Jane's JSA resumes at its normal rate of 71 from 10.10.13.

[S2119-S2122]

S2123 Earnings from one or more occupations S2129

A claimant may have earnings from a special occupation of less than 20, and also
have another job. Up to 5 can be disregarded from the other job. The total amount
disregarded can be no more than 201.
1 JSA Regs 13, Sch, para 7

Example

Peter earns 5 a week as an auxiliary coastguard and 20 a week as a waiter. His
earnings as a coastguard are fully disregarded and 5 is disregarded from his
earnings as a waiter.

[S2124-S2128]

S2129 Other cases

If none of the conditions in S2115 - S2123 is satisfied a personal disregard of 5 a
week should be allowed (1).
1 JSA Regs 13, Sch, para 5

S2130 Earnings paid for employment which has been interrupted S2014 S2630

Disregard earnings from employment that has been interrupted (1), for example by a
period of sickness.

1 JSA Regs 13, Sch, para 1(1)(b)

S2131

This disregard does not include
1. retainers (including guarantee payments)
2. earnings where the claimant has been suspended from employment.

S2132 Earnings payable outside United Kingdom

Earnings may be payable in a country outside the UK. If they cannot be transferred
to the UK, disregard them for as long as their transfer is prevented (1).
1 JSA Regs 13, Sch, para 9

S2133 Earnings paid in a foreign currency

Where earnings are paid in a foreign currency, disregard any amount charged for
changing them into sterling, for example banking charges and commission
payments (1).
1 JSA Regs 13, Sch, para 10

[S2134-S2149]

Employment and training schemes

S2150 General

Employment and training schemes are funded out of public funds by the Young
People's Learning Agency for England, the Chief Executive of Skills Funding or by
or on behalf of the Secretary of State for Business, Innovation and Skills, Scottish
Enterprise, the Highlands and Islands Enterprise, Skills Development Scotland or
Welsh Ministers. Where a person is on such a scheme, establish whether they are
1. employees
1.1 in remunerative work or
1.2 in P/T work or
2. trainees.

S2151

Employees get a wage from their employer. Treat the wage as earnings. If the work
is remunerative there will be no entitlement to benefit. If the work is P/T, take the net
earnings into account, less any disregard (see S2097 et seq).

[S2152-S2154]

S2155 Work based learning - Skill Build and Training for Work
(Wales & Scotland)

Work Based Learning (TfW in Scotland and WBL - SB in Wales) is a voluntary
scheme for the long term unemployed in Scotland and Wales. It is provided by
Scottish Enterprise, the Highlands and Islands Enterprise and Skills Development
Scotland or the Welsh Ministers (1). Schemes may be known locally by a name other
than Work Based Learning. Local Jobcentre Plus offices can confirm whether a
particular scheme is Work Based Learning.

1 TfW (Miscellaneous Provisions) Order 1995

S2156

There are two groups who are treated differently depending on whether a training
allowance is payable
1. those receiving or eligible to receive a training allowance, who are treated as trainees
2. those receiving or entitled to receive remuneration from the employer
providing the training facilities who are treated as employees.

S2157 Employment rehabilitation programmes

Employment rehabilitation programmes are for adults who, because of illness, injury
or disability, may need help to improve their employment prospects. Courses can
last up to six months and are also known as Work Choice.

S2158

People taking part in employment rehabilitation programmes are trainees. Treat any
payments in the same way as a training allowance. Payments can include
1. an allowance for attending the course
2. travelling expenses
3. an allowance for midday meals.

S2159 Work based Training for Young People and Modern Apprenticeships

WBTfYP (Skillseeker's in Scotland) and Modern Apprenticeships provide training for
young people who
1. have reached the minimum school leaving age
2. are not attending school or college F/T as a pupil or student
3. are not in higher education
4. are not in custody as prisoners or on remand
5. are not overseas nationals subject to
5.1 employment restrictions or
5.2 a time limit on their stay in GB (other than a refugee or asylum seeker)
and
6. are not benefiting from any other Government scheme (for example WBLA).

S2160

Young people on WBTfYP (Skillseeker's in Scotland) and Modern Apprenticeships
can be employees or trainees with wages or training allowances. Employee status is
more common on Modern Apprenticeships. Courses may vary in length and typically
may be around two years on WBTfYP or three on Modern Apprenticeships.

[S2161-S2179]

Notional earnings

S2180 General S2040 S2055 S2077 S2188

Notional earnings are earnings that a person does not actually have, but is treated
as having. The DM should treat the claimant or any other member of the family as
having notional earnings where (1)
1. they perform a service for another person and
2. that person
2.1 makes no payment of earnings or
2.2 pays less than the rate paid for a comparable employment in the area.
The rate for comparable employment in the area is a question of fact and must be
based on evidence. It should not be assumed to be the national minimum wage. If
the notional income rules are satisfied the DM must take into account at least the
national minimum wage rate relevant to the claimant, unless one of the situations in

S2183 S2182

applies.

1 JSA Regs 13, reg 63(4)

S2181

The national minimum wage provides that in most cases workers will be paid at
least a standard hourly rate, dependant on their age and whether they are receiving
accredited training.

S2182

Not all the money paid to a worker counts for the purposes of the national minimum
wage. Also the hours for which national minimum wage should be paid depends on
the type of work the worker is doing.
Note: If DMs are unable to decide whether the national minimum wage applies or to
calculate the national minimum wage for a particular claimant further guidance
should be sought from DMA Leeds. S2183 The DM should not take notional earnings into account (1) where the claimant
1. satisfies the DM that the means of the person for whom the service is
performed, are not enough to pay, or to pay more for the service or
2. is engaged by a charitable or voluntary organization or is a volunteer and the
DM is satisfied that it is reasonable for the services to be provided free of
charge.

1 JSA Regs 13, reg 63(4), reg 63(5)(a)

S2184 S2185

The DM should not take notional earnings into account where the claimant is
participating in a work placement which is approved by the Secretary of State (or a
person providing services to the Secretary of State) before the placement
commences 1 and for which the claimant receives no payment.

1 JSA Regs 13, reg 63(5)(b)

S2185

In S2184 "work placement" means (1) work which
1. is practical work experience and
2. is not performed in expectation of payment.
1 JSA Regs 13, reg 63(10)

S2186 Remunerative work

Where a service is being performed for some payment or in the expectation of
payment, consider whether the remunerative work exclusion applies (see ADM
Chapter R2).Meaning of voluntary organization

S2187

Voluntary organization means (1) a body that is not a
1. public authority or
2. LA
whose activities are not carried out for profit.
1 JSA Regs 13, reg 2(2)

S2188 Meaning of person

The meaning of "person" as used in S2180 1. and 2. includes (1)
1. a limited company
2. a corporate body
3. an individual.
1 R(SB) 13/86

S2189 Performance of a service

A service performed for another person benefits that person. That benefit may be in
not having to employ someone else to do the work. It might also be in getting extra
work done at little, or no, cost.

S2190

A service may be performed even where there is a close family relationship (1), for
example mother and son. In such cases there may be no formal arrangement. The
person for whom the service is performed is referred to as the employer in S2233.
1 R(SB) 3/92

S2191 Details of the service performed

There may be a low rate of payment, or no payment at all being made for the
service. If so, compare it with other employment by finding out
1. who is benefiting from the service
2. why it is being provided
3. when it is being provided (for example, during the day, night, or both)
4. where it is provided
5. who suggested that it be provided
6. what duties are involved
7. how many hours each day, or week, are spent on those duties.

[S2192-S2194]

S2195 When earnings are not to be treated as paid

Do not treat the claimant as having earnings where
1. the claimant
1.1 works for a charitable or voluntary organization, for example Attend
(formerly the League of Hospital Friends) or
1.2 is a volunteer and
2. it is reasonable for the service to be provided free of charge.

S2196 Meaning of volunteer

Volunteers (1) in this context are people who often have no connection to any
charitable or voluntary organization. They perform, of their own free will, a service
for another person. They do so without any legal obligation and expect no payment.

1 R(IS) 12/92

S2197

A person may hope or expect to be paid for their services at a later date. If payment
is to be made for work currently being done, the person is not a volunteer. If
payment is to be for work done at a future date, the person may still be a volunteer.

Example

Sinead starts unpaid work for the Church of England Childrens Society in January.
On 1st March she becomes a paid employee for the society as a permanent F/T
fundraiser. The voluntary work she did in January and February was not done in
expectation of payment. During that time she was a volunteer.

S2198 Time exchange schemes

Participation in a time-exchange scheme is not voluntary work, but as the nature of
the scheme is not to make any payment in cash, it is treated in the same way as
voluntary work as far as the effect on JSA is concerned. The hours worked by the
claimant are "banked" with the scheme and can be exchanged for the same amount
of time from another member who will provide their skills to the claimant.

S2199 Is it reasonable

There is no definition of reasonable. The question should be considered based on
the circumstances of each case (1). No exhaustive list can be given of relevant factors
but they may include matters such as
1. whether the person providing the services is getting anything in return (for
example, training which may assist the person in obtaining employment could
be seen as reasonable)
2. the length of time for which the services have been offered (the shorter the
period, the more reasonable it may be)
3. claimants are expected to do their best to avoid dependency on benefits.
They should seek paid work wherever possible.
Note:
Whether it is reasonable for the employer to pay is not relevant here. The
important point is whether it is reasonable for the claimant to provide the services
free of charge.
1 R(IS) 12/92

S2200 Carers

The claimant may be caring for a sick or disabled relative. In such a situation it is
often reasonable for the services to be provided free of charge. In considering this
the DM should take account of all the relevant circumstances. In particular the DM
should take into account matters such as
1. the general background of the way in which the claimant came to be caring
for the relative
2. what options would be available if they stopped providing the care
3. the nature and frequency of the care provided
4. the expectations of the family members concerned
5. their housing arrangements
6. whether the person gave up work to look after the relative.

S2201

The DM may consider that it is not reasonable for the services to be provided free
of charge. The question of notional earnings may then need to be considered. The
DM should take into account matters such as
1. the means of the person cared for
2. whether they have talked about their financial relationship, and if so, what the
results were
3. what would happen if the claimant made a charge for the care.
Note:
Whether it is reasonable for the employer to pay is not relevant here. The
important point is whether it is reasonable for the service to be provided free of
charge.

Example 1

Timothy is a single man aged 45. He lives with and looks after his elderly disabled
father. His father's only income is RP and AA. Timothy is an only child and he gave
up work to look after his father. Timothy is a volunteer in looking after his father. It is
reasonable for him to provide his services free of charge.

Example 2

Julie is 22. She lives with and looks after her disabled cousin. Her cousin gets a
large weekly income from a trust fund. Julie did not give up a job to look after her
cousin. The family did not expect that she should be responsible for looking after her
cousin. It is not reasonable for Julie to provide her services free of charge.

S2202 Fine payment work - England and Wales

Fine payment work has been introduced for people who are genuinely unable to pay
their fine. Claimants are allowed to do unpaid work in the voluntary sector as an
alternative. When the work is done the fine is regarded as paid. A fines officer works
out the number of hours the offender is required to work to discharge the fine. The
offender is allowed to reduce the number of hours he is required to work by paying
part of the fine.

S2203

Offenders who are genuinely unable to pay their fine will be able to work off their
fine at a fixed rate (1). In these circumstances notional income should not be applied
as offenders are not depriving themselves of income. They do not have the
opportunity to be paid for the work they are doing, it is done to comply with a court
order. Offenders cannot be said to be performing a service when they are complying
with a court order.
1 The Discharge of Fines by Unpaid Work (Prescribed Hourly Sum) Regulations 2004, reg 2

S2204 Supervised Attendance Orders - Scotland

These
orders (1) are similar to fine payment work in England and Wales. They provide
a community-based alternative to imprisonment for failure to pay a fine, substituting
the unpaid portion of a fine for a period of constructive activity which is organised by
the social work department.

1 Criminal Procedure (Scotland) Act 1995, s 235 - 237 & Sch 7

S2205

The period of these orders can vary between 10 and 100 hours. The activity
undertaken often includes elements of social education, financial management and
unpaid work. The granting of these orders discharges the fine (1).
1 Criminal Procedure (Scotland) Act 1995, s 235(6)

[S2206-S2209]

S2210 Calculation of gross notional earnings

The maximum amount of notional earnings that can be taken into account is the
lower of
1. the market rate for comparable employment in the area and
2. the means of the person to pay for the service.
But, the DM should take into account at least the national minimum wage rate
relevant to the claimant.

S2211 Meaning of in the area

In the area means the normal travel to work area. When considering this point, take
account of where the claimant lives and works.

S2212 Comparable employment

It is not identical or equivalent employment that has to be identified, but comparable
employment. Work of a different type can be comparable if the skills and experience
needed are similar to those being used.

S2213

Work of the same type will usually be comparable. But it may not always be paid at
the same rate. Rates of pay can be affected by the employee's
1. skills
2. age
3. seniority
4. experience.

S2214

Do not assume that the highest rate paid is the normal rate for the job. If the
amounts paid vary, compare the available evidence with the pay and requirements
of the claimant's job.

S2215 Payments in kind

Payments in kind are not earnings (1). Payments in kind should not be taken into
account when looking at whether a person is paid, or paid less, than the rate for
comparable employment (2).
1 JSA Regs 13, reg 58(2)(a); 2 R(IS) 2/98

Example

Blossom works as a shop assistant for ten hours per week. She receives payment
of 7 in cash and goods to the value of 35 each week. The goods to the value of
35 are payment in kind and are disregarded. The DM considers what the market
rate for the job is and calculates notional earnings at 42 per week. He decides it is
reasonable to deduct the 7 cash payment from the notional earnings and takes 35
per week into account.

S2216 Are earnings to be treated as paid

Consider whether it is reasonable to treat earnings as paid by taking into account
1. whether the employer
1.1
pays less than the going rate for similar employment in the area or
1.2
makes no payment and
2. a reasonable rate of pay for the job they are doing.

S2217 Reasonable rates of pay

The rate paid for comparable employment in the area is a question of fact. It should
not be assumed to be the national minimum wage. If earnings are not immediately
ascertainable, the DM treats the claimant as possessing earnings that are
reasonable in the circumstances (1). The DM must treat the claimant as possessing at
least the national minimum wage rate that is relevant to them.

1 JSA Regs 13, reg 63(3)

S2218

The parts of the job which would normally attract earnings, or more earnings, should
be identified. Ignore hours spent under training or supervision, unless the cost is
outweighed by the work performed.

S2219 Can the person afford to pay

The claimant may say that the employer is unable to pay. If this is the case, the
claimant must submit evidence, so that the DM can consider the question. This
could be
1. in the case of a S/E trader, the accounts, bank statements and details of
trading turnover or
2. in the case of an individual, details of that person's resources and outgoings.

S2220

Where the service is for a person, take account of that person's actual means. This
is not the amount by which their income would exceed a notional benefit level (1). It is
the amount of money that they actually have available to them.

1 R(SB) 3/92

S2221

The DM should consider what is reasonable in each case. Where the employer is
getting income related benefits they will not normally have the means to pay. But
this general rule may not always apply. For example, where the "employer" gets
benefits or other payments to pay for their personal care.

[S2222-S2224]

S2225 Amount to be taken into account

After determining the gross amount of notional earnings, deduct any actual earnings
paid. Actual earnings should be calculated in the normal way.

S2226

From the resulting figure, make notional deductions for
1. income tax and
2. Class 1 NI contributions.

S2227 Deduction for notional income tax

Income tax is made up of
1. a personal allowance - given to everyone
2. a married couple's allowance - which can be claimed by a member of a
married couple
3. an additional personal allowance - given in special cases for a child or young
person.

S2228

Calculate the notional income tax to be deducted (1).
1 JSA Regs 13, reg 63(8)

S2229 Deduction for notional NI contribution

The deduction depends on the claimant's circumstances. Employed earners
between 16 and pension age have to pay NI contributions. This is subject to the
amount of their earnings. Contributions are payable at a standard rate between a
lower and upper earnings limit (1) (see ADM Chapter S2 Appendix 2).

1 JSA Regs 13, reg 63(8)(b)

S2230

Some married women can pay NI contributions at a reduced rate. These are women who
1. had chosen to pay the reduced rate before 12.5.77 and
2. were married before 6.4.77 and
3. have continued to renew their certificate of election.

S2231

The right to pay reduced rate contributions ends if the woman
1. gets divorced or her marriage is annulled or
2. becomes a widow, and has not become entitled to WB or
3. loses her right to WB for a reason other than remarrying or
4. has had no earnings on which Class 1 contributions are payable and has not
been S/E in any two consecutive tax years since 5.4.78.

S2232

Standard rate deductions should be made unless there is a current certificate of
election.

S2233 Onus of proof S2190

In general, the burden of proof rests on the DM (1). But that is not always the case.
The onus of proving that the employer does not have the means to pay falls on the
claimant. The DM then considers what reasonable amount of notional earnings
should be taken into account.
1 R(SB) 13/86

S2234 Earnings due but not paid

Any earnings which are due to be paid to the claimant but have not been paid have
to be treated as possessed by the claimant (1). Where a claimant is treated as
possessing earnings due but not paid then the earnings should be calculated as
actual earnings (2).

1 JSA Regs 13, reg 63(1); 2 reg 63(6)

[S2235]

S2234does not apply to any earnings due to paid where the claimant has lost their
employment through redundancy (1).
1 JSA Regs 13, reg 63(2)

[S2236-S2299]

Employment protection legislation

S2300 Introduction S2013 S2503 S2630

When working out periods of continuous employment (in order to work out
legislative rights that are dependant on the total length of employment with a
particular employer) no distinction is made between part-time and full time service (1).
Periods in either type of work count when working out periods of continuous
employment.

1 ER Act 96, s 211, 212(1) & 212(3)

S2301

The effect of payments or awards made under employment protection legislation on
claims for JSA depends on
1. what type of payment is involved
2. when the payment was due to be made
3. whether the payment has actually been made
4. which benefit has been claimed.

S2302 Types of payments

There are many different types of payments and awards including
1. statutory guarantee payments (see S2314)
2. guarantee payments under a collective agreement or wages order (see S2335)
3. remuneration while suspended from work on medical or maternity grounds
(see S2395)
4. awards made by an Employment Tribunal or Employment Appeal Tribunal for
unfair dismissal (see S2405)
5. interim relief pending determination of a claim for unfair dismissal (see S2409)
6. remuneration under a protective award (see S2422)
7. statutory redundancy payments (see S2506)
8. payments for certain time off work (see S2440).

S2303 Treatment of payments

Most payments under employment protection legislation should be treated as
earnings (1) (see S2013 et seq). Take them into account in the normal way.

1 JSA Regs 13, reg 58(1)

S2304

Statutory redundancy payments (1) are the exception to this general rule. They should
be ignored.
1 JSA Regs 13, reg 58(2)(f)

S2305 When payments are due to be paid

A payment is due to be paid when it is due and owing. But, notional income rules
allow for earnings which are due on termination of employment because of
redundancy, but which have not been paid (1), to be ignored. A payment is no longer
due if the right to enforce payment of it is lost.

1 JSA Regs 13, reg 63(2)

S2306

Employers sometimes appeal against Employment Tribunal decisions awarding
payments. Until the appeal is decided, entitlement to any award will be in doubt. Any
payment will not be due to be paid until the employer's appeal is dismissed.

S2307

Employers and employees sometimes agree a settlement after an Employment
Tribunal has made an award. Any settlement varies the award made. The award
itself is due and owing until the agreement has been carried out. It is then replaced
by the agreement and is no longer due to be paid.

S2308

A complaint may be settled before the Employment Tribunal gives a decision. Any
payments made are payments on termination of employment.

[S2309-S2313]

Statutory guarantee payments

S2314 General S2013 S2302

Some employees working short time or who are laid off can get statutory guarantee
payments. These are payable when an employer is unable to provide work (1). Bad
weather or a drop in business are examples of when this might happen. Statutory
guarantee payments cannot be paid for any day after employment has terminated.

1 ER Act 96, s 28

S2315

Payments are made for days on which the employee would normally be required to
work. Those days are fixed in the contract of employment. A fresh contract can be
drawn up by agreement between the employer and employee.

S2316

A contract may provide for work only on certain days of the week. The employee
normally has to work on those days but not on other days. Statutory guarantee
payments are only payable for the days the employee is contracted to work.

S2317 Employees who do not qualify S2322

Statutory guarantee payments are not payable to employees who
1. usually work outside GB under their contracts of employment (1)
2. have not been continuously employed by their employer for at least one
month (2)
3. have no normal working hours fixed by a contract of employment (3), for
example some insurance agents and sales representatives
4. are engaged in share fishing and paid only by a share of the profits or
earnings of a fishing boat (4)
5. are members of the police service and armed forces (5).
Note:
Most employees on off-shore oil and gas rigs in British sectors of the
Continental Shelf are entitled to payments.

1 ER Act 96, s 141(2); 2 s 29(1); 3 s 28(1); 4 s 199(2); 5 s 200(1) & 192(2)

S2318

Statutory guarantee payments are also not payable if the Secretary of State has
made an exemption order (1) (see S2359).
Note: The exemption order is made by the Secretary of State responsible for
employment legislation.
1 ER Act 96, s 35

S2319 Calculation

Statutory guarantee payments (1) can be paid for the number of days that an individual
is normally contracted to work in a week (up to a maximum of five days per week (2))
in any period of three months (3). Thus if an employee is contracted to work three days
per week he can only claim for three days in any three month period, or if he works
for six days per week he can only claim for five days in any three month period.
Limits on their amount and extent may be varied by order of the Secretary of State (4).
Whether those limits are revised or superseded each year depends on whether the
retail prices index for September is higher (or lower) than the index for the previous
September (5). See Appendix 3 to this Chapter for details of the amounts payable.
1 ER Act 96; s 30; 2 s 31(3)-(5); 3 s 31(2); 4 s 31(7) & Employment Relations Act 1999 s 34; 5 s 34

S2320 Employees not entitled

An employee is not entitled to a guarantee payment if
1. there is no work because employees of the same or an associated employer (1)
are involved in
1.1 a strike or
1.2 a lock out or
1.3 other industrial action or
2. an employer's offer of suitable alternative work has been unreasonably
refused by the employee (2) or
3. reasonable requirements imposed by the employer to ensure that the
employee's services are available have not been met (3).
1 ER Act 96, s 29(3); 2 s 29(4); 3 s 29(5)

S2321 Payments not made by employer

Guarantee payments may not have been paid for the first five workless days in a
three month period. The employee and employer should be asked to state the
reason. If they say that it is because a condition is not satisfied, the DM should
normally accept that statement.

S2322

The reason given may seem unlikely. For example, the condition quoted may not be
one that would stop payment being due (see S2317) or there may be no good
reason given. The DM should make a determination based on the available
evidence.

S2323 Complaints to a tribunal

Employees may complain to an Employment Tribunal that they have not received all
the payments that they should have (1). If this is confirmed the employer will be
ordered to pay any amount owing (2). Settlements can also be reached by conciliation
or arbitration.

1 ER Act 96, s 34(1); 2 s 34(2)

S2324

Where such a complaint is outstanding the DM cannot determine whether an
employee is due to be paid statutory guarantee payments. That question can only
be decided by
1. Employment Tribunals
2. an Employment Appeal Tribunal
3. the Court of Appeal
4. the Court of Session (in Scotland).

S2325

It may be a long time before a decision is made on an employee's complaint. Do not
wait until the tribunal's decision is known before deciding the claim. The DM can
allow the claim then revise the award once a decision is made.

S2326 Effect of statutory guarantee payments

The period over which a payment is taken into account depends on the date it is due
to be paid (1). That date is not always clear. It may not be the date they are actually
paid.

1 JSA Regs 13, reg 56

S2327

A decision can only be made when all the evidence is available. The DM should find out
1. when any payments are due to be paid and
2. how many days are to be paid and
3. when the payments will actually be paid.

S2328

In cases of doubt the DM should contact the employer. The employer may be
making a guarantee payment, or may say that one is due. That evidence should
normally be accepted. The claimant's own evidence can also be accepted. Any
decision by a tribunal must always be accepted.

S2329

Statutory guarantee payments are payable only for the first five days of lay off in a
three month period. They cannot be paid for any other days. Payments for other
days will usually be because of a collective agreement or wages order (see S2335
et seq).

S2330

Statutory guarantee payments should be taken into account as earnings (1)
1 JSA Regs 13, reg 58(1)(g)

[S2331-S2334]

Collective agreements

S2335 Introduction S2013 S2302 S2329

Some employers have agreements with their employees for when there is a
shortage of work. These collective agreements guarantee employees
1. a minimum payment of wages or
2. a minimum amount of work or
3. both.

S2336

There may be enough work available so that employees can work, or earn, as much
as is guaranteed. The agreement may not then be applied. But employees will still
have the benefit of it. Their position will be the same as if it had been applied (1) .

1 R(U) 23/55

S2337

National agreements are sometimes made for an industry (1). They do not always
cover all the workers in that industry. Some employers may not be associated with
the agreement. Others may have their own local agreements which are different.
1 TULR (C) Act 92, s 178(1)

S2338 Terms of an agreement

Employees may have to place their services at the employer's disposal. They may
have to be available and willing to work for the employer. This can be for some or all
of the working days in the week.

S2339

What an employee must do will often be set out in the agreement. The employer's
guarantee will also be in the agreement. Consider both when looking at an
agreement.

S2340

An agreement may not always say what the employee must do. If wages are
guaranteed, the employee's services are assumed to be at the employer's disposal
on every working day (1). If work is guaranteed, the employee's services are assumed
to be at the employer's disposal for the guaranteed period.

1 R(U) 21/56 (T)

S2341

An agreement may be subject to a separate arrangement between the parties
involved. Take this into account when deciding the effects of the agreement (1) .

1 R(U) 21/56 (T)

S2342

Agreements are not affected by changes in the hours or days to be worked. This is
so even if part of the time worked is outside the normal hours or days (1) .
1 R(U) 1/75

S2343 Changes to agreements S2357

Changes to agreements cannot be made until they are known to the employer and
employees. They will then usually be jointly agreed and adopted. Make sure that up
to date evidence of any agreement is obtained.

S2344

Employers may follow an agreement that they are not a party to. In such cases
there may be a delay in learning of any changes made. There may also be a delay
in carrying out those changes (1) .

1 R(U) 40/56

S2345

Changes to an agreement cannot affect the JSA claimant responsibility tests for a
past period. They can also have no effect on the remunerative work exclusion for a
past period. This is so even if it is agreed that the change should take effect for a
past period.

S2346

Employers may make backdated payments, because of a change to an agreement.
The DM will need to find out when those payments were due to be paid. Employers
will usually be able to give this information.

S2347 Whether agreement effective

An agreement may be legally enforceable. If it is not followed, court action can be
taken. This is the case where
1. the agreement includes a written statement that the parties intend it to be a
legally enforceable contract (1) or
2. the terms of the agreement are part of an individual's terms of employment.
They then gain legal effect by being part of the contract between employer
and employee incorporated either expressly or by inference.

1 TULR (C) Act 92, sec 179

S2348

Agreements remain effective even if employers do not exercise their rights under
them. For example, employers may waive their rights to an employee's services.
The DM should take this into account when considering the employee's availability.

S2349

An employer may not fulfil the terms of a guarantee. Even so, the employee remains
under the obligation imposed by the agreement. Such a situation does not usually
last long. It may be ended by
1. the employer being persuaded to fulfil the guarantee or
2. the agreement being properly suspended or
3. the employment being terminated.

S2350

Once employment ends a guarantee agreement can no longer apply. If an
employee is later re-employed an agreement may start to apply again. The
agreement may take account of an employee's previous period of employment.

S2351 Suspension of agreement

If an agreement is properly suspended it stops being effective. Some agreements
provide for automatic suspension, for example where production is affected by an
industrial dispute. The suspension period will usually be the same as the stoppage
of work.

S2352

Production may be affected by other forms of protest. For example, a political
protest. Whether this leads to an automatic suspension will depend on the wording
of the agreement. If it refers simply to an industrial dispute there will be no automatic
suspension.

S2353

Agreements may be suspended by employers and trade unions acting together.
Written statements will then be made confirming the suspension and giving the date
from which the suspension applies. This must be a current or future date.
Agreements cannot be suspended for a past period.

S2354

A suspension can be applied part-way through a working week. It will remove
employees obligations for days on or after the date it applies. It will not remove them
for any day before.

S2355

The suspension of any agreement may apply to
1. an individual employee or
2. a group of employees or
3. the employees of one employer in a federation of employers.

S2356

Employees may say that an agreement no longer applies to them. The DM should
ask for details of the suspension. Employers will usually be able to supply these.

S2357

An employer may act alone and suspend a guarantee without the agreement of
employees. Employees may then accept the change in their terms of employment
by continuing to work under the new terms. See S2343 if the employees do not
accept the change.

S2358

Some agreements set out the circumstances in which they can be revived after
being suspended. The date from which this will be effective will depend on the terms
of the agreement.

S2359 Exemption orders S2318

Where there is a collective agreement in force, the DM can make an exemption
order (1). This order stops employees from being entitled to statutory guarantee
payments (S2314 et seq). Appendix 5 lists employers who are subject to such
orders.

1 ER Act 96, s 35

S2360

An exemption order may be made where the agreement allows employees to
1. have access to independent arbitration and adjudication or
2. appeal to an industrial tribunal.

S2361 Application of exemption orders

An order only applies where an employer is a party to the agreement. This can be
as a single employer or as a member of an organization. The exemption order gives
details of all parties to the agreement.

S2362

An order cannot apply where employers follow the agreement but are not party to it.
In such a case employees will not be affected by an exemption order. They will be
able to get statutory guarantee payments.

S2363

Employees are not entitled to payments where a collective agreement is suspended.
If an exemption order has been made they will also not be entitled to statutory
guarantee payments. This is because the exemption order continues to apply until it
is revoked.

S2364 Payment of wages guaranteed

Employees may be entitled to guaranteed payments of wages. These are not
statutory guarantee payments and are not usually paid at the same time.

S2365

A guaranteed payment of wages is only payable if the employee is covered by an
agreement. An employee is covered if
1. the agreement is in force and
2. the employer is a party to it and
3. the employee is within its terms and
4. the employment has not been terminated.
Note:
Employees are within the terms of an agreement where they are the type of
employee defined and have served any qualifying period required.

S2366

In national agreements the guarantee week is usually the pay week quoted in the
agreement. Employers who use a different pay week have a locally agreed variation
to those agreements. The week used will be the employee's normal pay week.

S2367

If a payment is guaranteed for a working week the payment covers the whole of that
week. This is so regardless of how the amount is decided. The phrase "during
working hours" used in this context means every working day.

S2368 Calculation

The amount to be paid under an agreement is usually
1. a part of a normal week's wage or
2. equivalent to payment for a set number of hours at the basic rate.

S2369 Effect of guaranteed wages payments

Before determining the effect of guaranteed wages payments the DM should find out
1. whether a current collective agreement applies to the employee
2. whether a payment of wages is payable under the terms of any such agreement
3. when any payment is due to be paid
4. the amount that is due to be paid
5. whether an exemption order has been made.

S2370

Any guaranteed payment of wages due to be paid should be treated as earnings (1)
Take it into account in the normal way.
1 JSA Regs 13, reg 58(1)

S2371 Work guaranteed

Some employees are guaranteed employment for a limited number of days or hours
each week. Take any such employment into account when considering the question
of the claimant's availability.

S2372

If employers cannot provide guaranteed work, payments may have to be made
instead. Details of guarantees should be in the agreement.

S2373

An agreement which guarantees employment for a full working week should be
clear. An agreement for an unlimited period should also be clear. Other agreements
may not be so easily understood. For example, the agreement may use vague
terms which are not defined.

S2374

Employees usually have to be available and willing to work for their employer for a
guaranteed period. They have to place their services at the disposal of the employer
for that period. The phrase "during working hours" in this context means that
guaranteed period.

S2375

The guaranteed period may be shown in terms of days, shifts or hours. Employment
may be guaranteed for
1. a limited number of days or
2. a limited number of hours or
3. a limited number of weeks.

[S2376]

S2377

If employment is guaranteed
1. for set days or shifts, the employee should work those days or shifts
2. for a number of hours, the employer can say when the employee should work.
This may be on some or all of the working days in the week.

S2378

Employers usually let employees know when they are not needed for work. This
does not remove the obligation imposed by the agreement. It also does not alter the
terms of any agreement (1).

1 R(U) 2/58

S2379

Employees may work for the full number of days in some weeks but not in others.
Any unworked days may be identified by comparing the weeks worked.

Example

Louis is guaranteed two days work a week. He must be available and willing to work
for his employer on those days. In alternate weeks he works two days, Monday and
Tuesday. In the other weeks he only works one day, Tuesday. In the one day
weeks, Monday is the other day on which he has an obligation to his employer (1).

1 R(U) 22/56 (T)

S2380

It may not be possible to identify a day on which the employee should have worked.
Take the day as being the last "unworked working day" in the guarantee week. That
is a day on which the employee would work in a standard working week.

S2381 Short time working instead of redundancy

Approved short time is sometimes worked as an alternative to redundancy. Some
agreements allow the guarantee to be reduced when this happens. The reduction
depends on the terms of the agreement but is usually
1. a percentage reduction, based on the reduction of the normal working week
by the short time or
2. the amount of time lost.
Ask to see a copy of the agreement if there is any doubt.

S2382

A decision to work short time instead of redundancy cannot affect a past period. It
will usually be made before the beginning of the pay week. Those affected will be
told before the beginning of that week.

S2383

A decision can also be made part way through a pay week. Even so it can only have
effect from a current or future date. If work is lost because of an emergency it
cannot be decided later that it was short time. During such an emergency the
normal guarantee will apply. Approved short time

S2384

Short time working usually means the loss of one or more complete days of work. In
a standard five day week, each day lost is one fifth of that week. A five day
guarantee would then be reduced by one fifth for each day lost.

Example 1

Katy has a standard five day working week, Monday to Friday. The guarantee is for
five days. Because of approved short time working, she only works Wednesday to
Friday. Her standard working week has reduced by two fifths (40%). The guarantee
is also reduced by 40%, to three days.

Example 2

Wally has a five day working week. The guarantee only covers four of those days.
Short time working of four days is introduced. His guarantee reduces by the amount
of time lost. It is reduced by one day to three days.

S2385 Night workers

Night workers usually work for a standard number of shifts. Where that number is
reduced because of short time working, any guarantee will reduce by an equal
amount.

S2386 Effect of holidays

Holidays during short time working are treated in the same way as holidays during
normal working. They remain holidays even when they fall on days when the
employee may not be working.

S2387

Guarantee agreements may have details of what should happen in weeks when
there are holidays. The guarantee period may simply be reduced by the number of
days of holiday. Or it may be reduced by the same percentage as the normal
working week is reduced.

Example

Mario has a five day working week, Monday to Friday, but is now on short time. The
guarantee is for four days a week. If he is on holiday in a pay week, the guarantee
will reduce by the same percentage as his working week.
He works Monday to Wednesday, does not work Thursday, and is on holiday on
Friday. His normal working week is reduced by the holiday from five days to four.
The period of the guarantee is also reduced by one fifth (20%) from four days to 3
days.

S2388

A holiday may fall on a day in the reduced guarantee period. If so, it has the effect of
further reducing that period by a day. If it falls on a day that would not be covered by
the guarantee it has no further effect.

S2389 Effect of guaranteed work

Whenever work is guaranteed, consider whether the remunerative work exclusion
applies and also, whether the work availability requirement is satisfied.

[S2390-S2394]

Suspension from work on medical or maternity grounds

S2395 General S2302

Employees may be suspended from work under certain health and safety law. This
can be on medical or maternity grounds (1). Employees may be entitled to be paid
while they are suspended (2). Take payments into account in the normal way (3).
1 ER Act 96, s 64 & s 66; 2 s 64 & s 68; 3 JSA Regs 13, reg 58(1)(g)

S2396

S2397 Employees not entitled to be paid

Employees lose the right to be paid if they unreasonably refuse the employer's offer
of suitable alternative work. This applies whatever the reason for the suspension (1).

1 ER Act 96, s 65(4)(a), s 68(2), s 66

S2398

Employees who are suspended on medical grounds also lose the right to be paid if (1)
1. they are incapable of work due to sickness or
2. they do not meet their employer's reasonable requirements ensuring that their
services are available.
1 ER Act 96, s 65(3) & (4)(b)

S2399 Calculation of pay

Employees suspended on
1. maternity grounds can be paid for as long as they are suspended (1)
2. medical grounds have a limit to the payment period. This is a maximum of 26
weeks (2).
The amount payable in either case is a normal week's pay for each week of the
suspension (3).
1ER Act 96, s 68(1), s 66; 2 s 64(1); 3 s 69(1), s 66

S2400 Complaints to a tribunal

Employees may complain to a tribunal that they have not received their full
entitlement (1). If this is confirmed the employer will be ordered to pay any amount
owing. That amount is not due to be paid until the question has been decided by the
tribunal.
1 ER Act 96, s 64, 68 & 70

[S2401-S2404]

Compensation for unfair dismissal

S2405 Introduction S2302

Employees have the right to complain (1) to an Employment Tribunal if they think that
their dismissal was unfair. If this is confirmed the tribunal can
1. make an order for reinstatement or re-engagement (2) or
2. award compensation
2.1 when no such order is made (3) or
2.2 if such an order is made but its terms are not fully met by the
employer (4).

1 ER Act 96, s 111; 2 s 113, s 114, 115 & 116(1-4); 3 s 112(4); 4 s 117, 118 & 111

S2406

Under an order for reinstatement, employees should be treated as if they had not
been dismissed. All rights and privileges must be returned to them. This includes
payment of any arrears they would have had but for the dismissal.

S2407

Under an order for re-engagement employees should be re-employed in a similar
job to that which they lost. The terms will be set out in the order. These can include
the payment of any arrears that they would otherwise have had.

S2408

It may be a long time before the tribunal make their decision. Do not wait until then
before deciding the claim. The DM can revise the award once the decision is made.

S2409 Interim relief S2302

Some employees can apply to the tribunal for interim relief while waiting for a
decision. This can only happen where the reason for the dismissal is connected with
1. TU membership or activities (1) or
2. the status or activities of employee representatives (redundancy and business
transfers)2 or
3. health and safety at work matters (3).
1 TULR (C) Act 92, s 161-166; 2 ER Act 96 s 128-132; 3 s 128-132

S2410 Amount of awards

An award of compensation can be made up of
1. a basic award, based on age and length of service (1) (equal to the statutory
redundancy payment to which the employee would have been entitled had
they been dismissed for redundancy) and
2. an amount to compensate for any loss suffered because of the dismissal (2)

1 ER Act 96, s 118(1)(a) & 119; TULR (C) Act 92, s 156; 2 ER Act 96, s 118(1)(b) & 123

S2411

The amount awarded may be reduced to take account of
1. wages that might have been earned if the employee had properly looked for
other work after being dismissed (1) or
2. the employees conduct or
3. work which the employee may be expected to get at a lower wage than was
earned in the former job or
4. any redundancy payment that the employee was paid or
5. any payment awarded under Sex Discrimination or Race Relations law (2).
Note:
This list is not exhaustive.

1 R(U) 6/85; 2 ER Act 96, s 126

S2412

Under certain recoupment law (1), the award can also be adjusted to take account of
the amount of benefit received over the relevant period. This amount is then
recovered from the former employer by the DM (see ADM D1301 et seq). But this
only applies to formal awards and where the employee has claimed or had been
granted JSA.

1 The Employment Protection (Recoupment of JSA and IS) Regs 1996

S2413

Recoupment law does not always apply, for example where the award is made
under Sex Discrimination or Race Relations law. Even so, the tribunal will normally
reduce the award by the amount of benefit paid for the period of the award. In such
cases it is unlikely that action will be taken to recover the amount of any benefit
overpaid.

S2414 Period of awards

The period of the award may be cut, for example where expected weekly wages are
more than was paid in the former job. An Employment Tribunal will usually give
details in its decision when this happens. The period covered by the award should
also be given.

S2415

If the period is not clearly stated, or there is any doubt, make a decision based on
the available evidence. It may be possible to work out what was intended from the
text of the decision. Only do this where there is clear evidence of the tribunal's
intention.

Example

Ishaq earns 200 a week as a machinist. On 7.10.13, he is sacked by his employer
and complains to a tribunal. On 3.2.14 the tribunal decide that he was unfairly
dismissed and award him 2000 compensation. The award is from 7.10.13 and has
not been cut for any reason. There are no details given of what period the award
covers. The DM decides that it was clearly intended to be for 10 weeks (10 x 200 =
2000) from 7.10.13.

S2416

Always make sure that the amount and period of an award are known. The most
reliable source of such information is the Employment Tribunal. Employees should
also be able to give these details.

S2417 Effect of awards S2418

Awards of compensation should be treated as earnings (1). Take them into account
over the period for which they were awarded. There are two exceptions to this rule.
These are where
1. the payment is due to be paid more than 52 weeks after the date the
employment ended or
2. the award is compensation for loss suffered by the employee because of the
dismissal (2) and
2.1 it remains unpaid and
2.2 the former employer is insolvent at the time the DM is making a
decision (see S2419).

1 JSA Regs 13, reg 58(1)(f); 2 ER Act 96, s 118(1)

S2418

Awards as in S2417 1. and 2. should be disregarded (1).
1 JSA Regs 13, Sch , para 3

S2419 Employer insolvent S2417

In England and Wales, employers are insolvent (1) if they
1. have been officially declared bankrupt or
2. have made a composition (a legal compromise agreement) or arrangement
with their creditors or
3. have died and their estate is to be administered under a bankruptcy order or
4. are companies and
4.1 a winding up order is made or
4.2 an administration order is made or
4.3 a resolution for voluntary winding up is passed or
4.4 debenture holders with a floating charge on the company have
4.4.a
appointed a receiver or manager or
4.4.b
taken possession of charged company property or
4.5 a voluntary arrangement is approved.

1 ER Act 96, s 183(2)(a)

S2420

In Scotland employers are insolvent (1) if
1. a sequestration award is made on their estate or
2. a trust deed is executed for their creditors or
3. there is a composition contract or
4. they have died and a judicial factor is to divide their insolvent estate among
their creditors or
5. they are companies and
5.1 a winding up order is made or
5.2 an administration order is made or
5.3 a resolution for voluntary winding up is passed or
5.4 a voluntary arrangement is approved or
5.5 a receiver is appointed.
1 s 183(2)(b)

S2421

Protective awards

S2422 Introduction S2302 S2741

Employers must consult their employees' representatives in good time about certain
redundancy proposals (1). Those representatives may be
1. elected by the employees or
2. representatives of a recognized TU.

1 TULR (C) Act 92, s 188

S2423 S2740

Employers who mean to dismiss at least 20 employees within 90 days or less must
start to consult at least
1. 90 days before the first dismissal, if they mean to dismiss 100 or more
employees or
2. 30 days before the first dismissal, if they mean to dismiss 20 - 99 employees.

S2424

Employee representatives can complain to a tribunal if an employer does not
correctly follow the rules. The Employment Tribunal can then make a protective
award if the complaint is confirmed.

S2425 Terms of an award

Under a protective award employers must make payments to any employees who
have been made redundant. They must also pay any who have not been dismissed
but whose representatives should have been consulted. The payments must be
made for a protected period, which begins with the earlier of
1. the date on which the first of the dismissals takes effect or
2. the date of the award.

S2426

The period will last for as long as the tribunal decide is reasonable in the
circumstances. It cannot last for more than
1. 90 days, if 100 or more employees are to be made redundant within 90 days
or
2. 30 days, if 20 - 99 employees are to be made redundant within 90 days.

S2427 Payments not made by employer

Employers may not pay all that they should do under a protective award. Employees
can then complain to an Employment Tribunal (1). If the complaint is confirmed the
employer will be ordered to pay any amount owing.
1 TULR (C) Act 92, s 192

S2428 Protective award not applied for

There may be cases where
1. the employer has not followed the rules and
2. the employee representative has not complained to an Employment Tribunal
and
3. the employer has paid the redundant employees in lieu of consultation.
A payment in lieu of consultation is a payment in lieu of remuneration and falls
within the definition of earnings (1).
1 JSA Regs 13, reg 58(1)

S2429 Effect of payments

Payments made under a protective award are earnings (1). They should be taken into
account in the normal way.
1 JSA Regs 13, reg 58(1)(h)

[S2430-S2439]

Time off work provisions

S2440 General S2302 S2523

Under employment protection law, employees may be allowed time off during
normal working hours
1. for duties as a TU or elected employee representative (1)
2. for TU activities (2)
3. for public duties (3)
4. to look for work or make arrangements for training (4)
5. for antenatal care (5)
6. for occupational pension scheme trustees (6)
7. to make arrangements for dependants (7)
8. to undertake study or training if they are a young person (8).

1 ER Act 96, s 61; 2 TULR(C) Act 92, s 170; 3 ER Act 96, s 50; 4 s 52; 5 s 55; 6 s 58; 7 s 57A; 8 s 63A

S2441

Employees may be entitled to be paid while they are taking this time off. Any
payments due are earnings (1). Take them into account in the normal way.
1 JSA Regs 13, reg 58(1)

[S2442-S2450]

S2451 Complaints to a tribunal

Employees may complain to a tribunal that they have not been allowed to take time
off (1). If this is confirmed the tribunal may make an award of compensation. The
amount will be what the tribunal considers fair in the circumstances, taking into
account any loss suffered.

1 TULR (C) Act 92, s 168(4) & 170(4); ER Act 96, s 51(1), 54(1), 57, 57B(1), 60(1)(a), 63(1)(a), 63C(1)(a)

S2452

Employees may also complain that they have not received their full entitlement to
payment (1). If this is confirmed the employer will be ordered to pay the amount that
the tribunal finds is due.

1 TULR (C) Act 92, s 169(5) & 172; ER Act 96, s 54(1)(b), 57(1)(b), 60(1)(b), 63(1)(b), 63C(1)(b)

S2453 S2630

A DM cannot decide whether an employee is due to be paid. That question can only
be decided by the tribunal. Any amount awarded by the tribunal is not due to be paid
until the question has been decided. It should not be taken into account until then.
S2454 - S2499
Payments on termination of employment

S2500 Introduction S2013

Employees may be entitled to certain payments on termination of employment, that
is, when their employment ends. Payments for the termination of the employment
are made because the employment has ended (1). They are not paid for any other
reason. They would not be paid but for the employment ending.

1 R(U) 4/92

S2501

The effects of these payments depends on
1. what type of payment is involved
2. when the payment is due to be made
3. which benefit has been claimed
4. whether there is an unworked or waived period of notice
5. whether the work that has ended was remunerative or P/T
6. when the work ended.

S2502

S2503 Types of payments

There are many different types of payments that might be made. These include
1. payments due for any period before the employment ended (see S2504)
2. holiday pay (see S2505)
3. PILON
4. refunds of occupational pension contributions
5. pension lump sums
6. payments, remuneration or awards made under employment protection and
trade union law (see S2300 et seq)
7. payments in kind (see S2509)
8. income tax refunds (see S2060)
9. compensation payments (see S2600 and S2630)
10. statutory redundancy payments (see S2506).

S2504 Payments for period before employment ended S2503

When employment ends payments may be due for the employed period, for
services already rendered. They are owed under the contract of employment and
are due because of the employment itself, not because of the termination. Such
payments include
1. final earnings
2. wages held in hand
3. commission.

S2505 Holiday pay S2503

Most employees are entitled to be paid while they are on holiday. When their
employment ends they may not have taken all the paid holiday they could have had.
They will then receive a payment of holiday pay instead.

S2506 Statutory redundancy payments S2014 S2302 S2503

Employees who have been continuously employed for two years may be entitled to
statutory redundancy payments if they are
1. dismissed by reason of redundancy (1) or
2. laid off or kept on short time for more than a set number of weeks (2).

1 ER Act 96, s 135(1)(a); 2 s 135(1)(b) & 148(1)

S2507

Not all employees are entitled to statutory redundancy payments, for example
members of the armed forces and civil servants. Redundancy type payments may
be paid to these employees, for example ex gratia payments and "golden
handshakes". Such payments are not statutory payments.

S2508

Statutory redundancy pay is based on (1)
1. the length of continuous employment
2. the age of the employee
3. the amount of a week's pay (see Appendix 2 to this Chapter for the maximum
amount that can be used).
1 ER Act 96, s 162

S2509 Payments in kind S2503 S2667

A payment in kind is payment by something other than money. This can be in many
forms including
1. goods, for example food or clothes
2. vouchers, for example childcare or gift vouchers, but not if the amount of any
voucher has been taken into account as earnings of an employed earner (see S2093)
3. free accommodation.

S2510 Employment never existed

For employment to have ended, it must first have existed. A payment on termination
of employment can be made only where a job has ended. Any payments made for
other reasons are not payments on termination of employment.

Example 1

Kirsty is offered a job in a shop. The offer is then cancelled before she can start
work. The shop owner pays Kirsty 30 to make up for cancelling the offer. The 30
is paid because of the cancellation. It is not paid because the job ended. It is not a
payment of earnings.

Example 2

Wladislaw is due to start work in a shop on 21 October. On 14 October the shop
owner gives him a 30 advance of wages. On 17 October Wladislaw decides that he
no longer wants the job and does not start work. The 30 advance is not paid
because the job ended. It is a type of loan. It was meant to last for one week and is
a payment of income.

[S2511-S2514]

S2515 Payments not received

Notional income rules allow for earnings which are due on termination of
employment as a result of redundancy, but which have not been paid, to be
ignored (1).

1 JSA Regs 13, reg 63(2)

S2516

Any benefit which would not have been paid if the claimant had received the
earnings due to him at the right time will be recovered when those earnings are
paid.

S2517

In the case of insolvent employers, benefits paid will be deducted from the amount
awarded by the Insolvency Service. In these circumstances, cumulative totals do not
accumulate on JSA for the period covered by an Insolvency Service payment. In
cases where JSA has been paid prior to the Insolvency Service award, cumulative
totals will need to be adjusted to reduce them as appropriate.
Note:
In all other cases benefit paid will be recovered under existing procedures.

S2518 Delay in payment

A payment is due when it is legally due and owing. Any delay in its actual payment
does not affect that due date. Employer withholds payment

S2519

Employers may not pay the full amount that is due. They may for example make a
reduction to pay for cash shortages that the employee is responsible for. Take the
full amount due into account if
1. it is a term of the contract that this action can be taken and there is no dispute
about the shortage or
2. the employee agrees to the employer's action or
3. the money was originally paid to the employee, before being paid to the
employer.

S2520

If there is any doubt or dispute about the reduction, ask for full details. The DM
should then take all available evidence into account when deciding the amount due.

Example 1

Jack is due to be paid 500 compensation when his employment ends. He is
responsible under his contract of employment for any cash shortages. He agrees
with his employer that there is a shortage of 100. The employer deducts this
amount from the payment due to him and Jack is paid 400. The full amount of
500 is taken into account.

Example 2

Vera is due to be paid 600 compensation when her employment ends. Her
employer deducts 100 for a cash shortage that he says is her responsibility. Vera
is not responsible for shortages under her contract. She did not agree that the
deduction could be made and is disputing the alleged liability. Only the 500 actually
paid is taken into account.

S2521 Uncashed cheques

A cheque does not form part of a person's actual resources until it has been cleared
through the banking system. The question of notional resources may need to be
considered where a claimant receives a cheque which
1. the claimant is refusing to cash or
2. has been returned by the claimant to the employer.

S2522 British Telecom Newstart Scheme

This is a programme where employees agree to terminate their employment in
return for a payment. It is not a redundancy programme. As it is a voluntary scheme
those who opt for it do not receive PILON but they do receive a payment based on
the length of service and salary. This payment falls into the definition of
compensation payment (1) (see S2630).
1 JSA Regs 13, reg 58(1)(b) & (4)

S2523 Whether employment has terminated

Employees may be temporarily away from work because
1. of a recognized, customary, or other holiday or
2. time off has been allowed under employment protection law (see S2440).

S2524

Employees who are away from work temporarily may continue to be employed.
Their employment is not terminated.

S2525 Recognised, customary or other holidays

Employment will not have terminated if a claimant is absent because of a holiday, or
an absence authorised by the employer.

S2526

When considering if an absence from work is because of a holiday, DMs should (1)
1. have regard to the reality of the situation and
2. consider the claimant's contractual entitlement to holidays and
3. only treat as a holiday the weeks of the holiday for which the claimant is
actually paid.

1 R(JSA) 5/03

S2527

An employee will generally be entitled to four weeks annual leave under the relevant
legislation (1). DMs should assume that the claimant is entitled to four weeks paid
annual leave unless there is evidence of entitlement to more than four weeks.
1 The Working Time Regulations 1998

S2528 Meaning of terminated

Terminated is not defined in the legislation. It should be given its ordinary meaning (1).
Termination of employment should also be given its ordinary meaning.

1 R(U) 7/68(T); R(U) 8/68(T)

S2529

When a contract of employment is terminated, the employment under it is also
terminated. This happens as soon as rights and obligations under the contract end (1).
Whether there is any intention of resuming the employment is not relevant.

1 R(U) 7/68 (T)

S2530

A decision may be made to terminate a contract from a future date. It is the date of
termination and not the date of the decision that is relevant.

S2531

There is a distinction between the contract itself and any employment under it (1). A
contract may continue during a period when the person employed under it does no
work. It may also continue when the person employed is not expected to work, for example
1. when there is a temporary lay-off or
2. during a period of holiday (even if wages are not paid for the holiday).

1 R(U) 8/68 (T)

S2532 S2533

Whether a contract has terminated is a question of fact to be decided on the
available evidence. Employers may say that an employment has been terminated.
That does not necessarily mean that it has terminated. Employment cannot be
terminated without employees being given notice of that fact (1). Notice cannot be
given retrospectively.
1 Brown v. Southall & Knight (1980) ICR 617

Example

Russell is on 2 weeks paid holiday from work. On Friday his employer sends him a
letter stating that his employment will end on Saturday. Russell is entitled to one
week's notice. He is abroad and does not get the letter until Monday. The
employment does not end until Monday, when Russell gets the letter and has a
reasonable opportunity to read it.

S2533

It should usually be accepted that a contract has terminated
1. when due notice of termination has been given, received and has expired or
2. if a payment in lieu of notice has been made (except for in the example at
S2532) or
3. at the end of an engagement which was for a fixed period.

S2534 Contract terminated immediately before period of absence from work

DMs should decide that an employee is still in employment where the contract of employment
1. is still current or
2. ends at the beginning of what would be a period of absence even if the
contract continued and it is expected that the employee will return to that
employment after the absence because
2.1 there is an express agreement (written or verbal) or
2.2 it is reasonable to assume that a long standing practice of re-
employment will continue.

S2535 Employment suspended

Employees may be temporarily laid off when there is no work. In such cases the
contract of employment may not be terminated. Employment may be simply
suspended.

S2536

During a period of suspension the situation may change. It may become clear that
the contract has terminated. The employment should then be regarded as
terminated from the date the contract ends.

S2537 Employment resumed

People may still be employed, under a continuing or running contract, where
1. they were expected to resume their employment on a later fixed date and
2. they return to that employment as arranged and
3. there is no evidence of any fresh arrangement for their re-appointment.

S2538

The number of times this may have happened should be taken into account (1). For
example, a person may have resumed their employment many times without the
need for re-appointment. This would suggest that they are employed under a
running contract.
1 R(U) 8/68 (T); R(U) 7/68

Example 1

Nigel is a violinist working P/T as a music teacher. He was originally employed for a
fixed period of one term in 2000. He continued teaching at the school for many
years without having to be re-appointed.
At the end of the summer term in 2013, he received no formal notification of
discharge or re-employment. Early in the summer holidays the understanding
between him and his employer was that he would resume next term. There was no
evidence of any fresh arrangement for re-appointment.
It was decided that he was employed under a running contract. During the 2000
summer holiday his employment was merely suspended, not terminated (1).
1 R(U) 8/68 (T)

Example 2

Angus is a printer's warehouseman employed on a basis known in the trade as
"casual". His union allocates him to one of a number of employers for night shift
work, one night at a time.
After a night's work he receives his pay for that night and his P45 is handed back to
him. He does not know whether he will work for the same employer, or at all, on the
next night. It is decided that at the end of each night's work the employment is
terminated (1).

1 R(U) 7/68(T)

S2539

People may be employed under a series of fixed term contracts. Under employment
protection law (1) these people may be regarded as being in continuous employment.
For example, when redundancy and unfair dismissal is being considered. Such a
decision is only for the purposes of the employment protection legislation. It is not
relevant for JSA purposes. It should not influence the DM in determining whether
employment has terminated.
1 ER Act 96

S2540 Teachers

Teachers and lecturers may not be permanent members of school or college staff.
In all such cases ask to see the contract of employment and examine
1. the provisions about the period of appointment and
2. any requirement for notice to terminate the employment.

S2541

The period of the appointment may not have been given. If notice is needed to
terminate the employment, find out whether notice was given. If it was, find out how
and when it was given. If there is no satisfactory evidence that proper notice was
given, the contract may not have been terminated.

S2542

The terms of the employment may not be in the contract itself. They may be set out
in some other document. For example, an LEA's "Conditions of Employment and
Tenure of Teacher". Ask for a copy of the relevant document.

S2543

The claimant or employer may say that no written contract of employment was
issued. Ask for a copy of the letter of appointment and any other letters about the
terms of the appointment.

S2544

Most teachers who are not permanent members of staff fall into one of two groups.
This is usually the case for those working in LEA schools. The groups are
1. sessional or temporary teachers, employed for a fixed period, normally of an
academic term or year
2. supply, casual, or occasional teachers, employed to cover for the absences of
others.

S2545 Sessional or temporary teachers

Contracts and letters of appointment are usually clear when the employment is for a
fixed period. The fixed period will be quoted and will usually be for academic terms
or years.

S2546

A fresh contract or letter of appointment may be issued at the start of any later
period. In such a case there is a series of agreements (1). Employment is terminated
at the end of each period.

1 R(U) 8/68

S2547

Teachers may continue employment after the end of the first fixed period. Their
periods of employment may be separated only by school holidays. If there is no
evidence of re-appointment it may be that their employment is continuous. Their
separate periods of employment could be a continuation of the first appointment
period.

S2548

Consider the terms of the original appointment carefully. Find out exactly how and
when it was agreed that the employment would resume. Make sure that all the facts
are obtained before making a decision.

S2549 Supply teachers

Supply teachers have their names on an LEA list of teachers who
1. are willing to take employment at short notice and
2. may be offered employment as and when vacancies arise due to absences
(usually through sickness).

S2550

Employment may be offered on a day to day basis, for example when it is not known
how long an absentee will be off work. It may also be offered for an indefinite or set
period, for example, to cover maternity leave.

S2551

When supply teachers are added to the list, they may be sent a letter advising them
of that fact. They may also be advised of what might happen, for example, that
employment may be offered as and when vacancies arise. Any such written
notification is not a contract of employment.

S2552

The letter places no obligation on the LEA to offer employment. The teacher is not
obliged to accept any vacancies offered (1). When there is a vacancy the teacher is
contacted, by telephone or in writing, and offered employment.

1 R(U) 2/87

S2553

A written contract may not always be issued. For example, where the period of
employment offered is short. Such employment terminates as soon as the duties for
the period covered by the offer are finished (1).

1 R(U) 2/87

S2554

The period of employment offered may include a school holiday. For example, it
may be for an open or a closed period that stretches over a holiday. To decide
whether employment continues during the holiday, the DM should find out
1. what provision was made for terminating the appointment and
2. whether there was a definite agreement about what would happen after the
holiday. For example, was it agreed that employment would continue at the
start of the next term (or half term) or because it is reasonable to assume that
a longstanding practice of re-employment will continue (1).
1 R(JSA) 5/03

S2555 Whether a supply teacher's employment has terminated during a school closure

It is likely that a supply teacher's employment will have terminated where (1)
1. the period of employment ends immediately before a school holiday and
2. there is no definite agreement about whether the claimant will be returning to
the employment at the start of the following term and
3. the claimant has no established cycle of work which includes school holidays.
1 R(JSA) 5/03

[S2556-S2559]

S2560 Maternity leave and absence

Under employment law (1), all pregnant employees have the right to at least 26 weeks
ordinary maternity leave, regardless of their length of service. Additional maternity
leave may also be taken (2).

1 ER Act 96, s 71; 2 s 73; Maternity & Parental Leave etc 1999, SI 1999 No. 3312

S2561

In both type of cases, employees should generally return to
1. their original employer (or successor)
2. the same job
3. on terms and conditions no less favourable than those which applied before
the absence.

S2562

Employees entitled to 26 weeks ordinary maternity leave must return to work at the
end of that period. Additional maternity leave will start immediately after ordinary
maternity leave and continue for up to a further 26 weeks.

S2563

Employees continue to be employed during the 26 week ordinary maternity leave
period. It counts towards the employee's period of continuous employment for
seniority

pension rights

other personal length of service payments, for example pay increments.

S2564

The employment contract will continue in a very restricted form during a period of
additional maternity leave, but may also be ended during this period by agreement,
resignation or dismissal. Statutory continuity of service will count any periods of
additional maternity leave; but contractual length of service does not have to.

S2565

S2566 Suspension on maternity grounds

Some employees may be suspended from work on maternity grounds. This can
happen if there is a health and safety risk to new or expectant mothers that cannot
be removed. Such employees are normally entitled to be paid while they are
suspended.

S2567

Employees continue to be employed during the maternity suspension period. It
counts towards the period of continuous employment for
seniority

pension rights

other personal length of service payments, for example pay increments.

S2568 Claim within 29 weeks of child-birth

A woman may make a claim within 29 weeks of having given birth. That claim may
include a period which would have been a holiday but for the maternity leave. Find
out whether she has any contractual right to return to work in addition to her
statutory right.

S2569

The contract may not have continued during the 29 week period. For example, the
woman may have to be re-appointed or re-employed rather than simply resume her
duties.

S2570

Employment should then normally be regarded as terminated on the last day for
which wages or salary was paid. This is so even though the employer has a
statutory duty to re-employ the woman if she exercises her right to return.

S2571 Adoption leave

Adoption
leave (1) means a period of absence from work on ordinary or additional
adoption leave under relevant legislation (2).

1 PA Regs, reg 2(1) & 3; JSA Regs 13, reg 2(2); 2 Employment Rights Act 1996, s 75A & 75B

S2572

Employees who adopt a child under the age of 18 have the right to 26 weeks
ordinary adoption leave (1). A further 26 weeks of additional adoption leave will also be
available (2).

1 PA Regs, reg 18(1); 2 reg 20(2)

S2573

Employees continue to be entitled to their normal terms and conditions of
employment during the 26 weeks of ordinary adoption leave and during the 26
weeks additional adoption leave (1).

1 PA Regs, reg 19

S2574

Following a period of adoption leave, employees have the right to return to the same
job (1).
1 PA Regs, reg 26
Paternity leave

S2575 Ordinary paternity leave

Ordinary paternity
leave (1) means a period of absence from work on leave following
the birth or adoption of a child under relevant legislation (2). It is available to employed
parents who
1. have or expect to have parental responsibility for a new child and
2. are the biological father of the child or are the mother's husband or partner
and
3. have completed at least 26 weeks continuous service with their employer up
to and including the 15th week before the baby is due and
4. have told their employer of their intention to take leave by the end of the 15th
week before the expected week of the child's birth.
1 JSA Regs 13, reg 2(2); 2 ER Act 1996, s 80A & 80B

S2576 Additional paternity leave

Additional paternity leave means (1) a period of absence from work on leave following
the birth or adoption of a child under relevant legislation (2). The period of absence
cannot exceed 26 weeks.
1 JSA Regs 13, reg 1(3); 2 ER Act 1996, s 80AA & 80BB

S2577 Agreement not to work notice

Many employees are entitled to notice before their employment is ended. Their
employment does not terminate until that notice period ends where they
1. are given the full period of notice that they are entitled to and
2. do not have to work that notice and
3. get their normal salary for the notice period.
This is sometimes called gardening leave.

[S2578-S2629]

Payments on termination

S2630 Meaning of compensation payment S2503 S2522 S2632 S2665 S2768

Compensation payment means (1) any payment made for the termination of
employment other than
1. payments for any period before the employment ended (see S2640 et seq)
2. "emoluments" (whether in money or in kind) accrued before the employment
ended (see S2651)
3. holiday pay (see S2652 et seq)
4. certain payments, remuneration or awards under employment law and trade
union law, including awards of compensation (see S2300 - S2453)
5. statutory redundancy payments (and payments made in lieu of statutory
redundancy payments) (see S2664 - S2666)
6. payments in kind (see S2667)
7. refunds of contributions to which the claimant is entitled under an
occupational pension scheme
8. payments of occupational pensions (see ADM Chapter S1)
9. periodic sums paid because of redundancy (see S2014)
10. payments for a period when the claimant is on maternity or sick leave (see S2130)
11. payments for expenses wholly, exclusively and necessarily incurred in the
performance of the employment (see S2078)
12. any lump sum payments received under the Iron and Steel Re-adaption
Benefits Scheme.

1 JSA Regs 13, reg 58(4)

S2631

The DM must show that a payment of compensation has been received. How the
payment is described is not binding. A payment of PILON is a compensation
payment for the purposes of JSA.

S2632 Effect of compensation payments

The DM should determine
1. if a compensation payment has been received (see S2630) and
2. the period covered by the compensation payment (see S2675 et seq) and
3. if the claim is affected by the compensation payment (see S2633 et seq).

S2633 S2632

How compensation payments affect a claim depends on whether the work that has
ended was remunerative or P/T.

S2634 Remunerative work S2672

A payment of compensation may be received on termination of remunerative work
(see ADM Chapter S1). These payments should be disregarded (1).

1 JSA Regs 13, Sch, para 1

[S2635]

S2636 Part-time work

The work that ended may be P/T, which is not remunerative. If it ended on or after
the first day of entitlement treat, any compensation payment (1) as earnings from the
date on which it is due to be paid. Take it into account for the period covered by the
payment (2) (see 26675 et seq). If it ended before the first day of entitlement any
compensation payment should be disregarded (3).
1JSA Regs 13, reg 58(4); 2 reg 54(8); 3 Sch, para 2

[S2637-S2638]

S2639 Payment by someone other than employer

Compensation is normally paid by the employer, but may be paid by someone else.
It is compensation regardless of who pays, for example
1. LAs may make payments where people have to give up employment handling
food and drink under public health laws
2. one company taking over another may discharge that other company's
obligations to pay compensation
3. the government may make payments in lieu of notice to employees of an
insolvent employer under employment protection law (1).
1 ER Act 96, s 182, 184(1), (2) & (4), 185, 186 & 187; TULR (C) Act 92, Sch 2

S2640 Remuneration for period before employment ended S2630

Pay may have accrued in the period before the employment ended, for example
final earnings or wages held in hand. Such pay is due because of the employment
itself not because of its termination. It is not a compensation payment.

S2641

Severance payments may be made when employment ends. Such payments may
be worked out on past years of service in the employment. But they are not made
for a period before the employment ended. They will not be exempt from the
definition of a compensation payment (1).
1 R(U) 5/92

S2642 Remunerative work

When remunerative work ends earnings due to be paid for the period of that
employment should normally be disregarded (1). This includes any payments held in
hand by the employer, when the employment ends. It does not include any
1. awards made under employment protection or trade union law (including "out
of court" settlements)
2. retainers including
2.1. statutory guarantee payments
2.2. payments made where a person has been suspended on medical or
maternity grounds.
1 JSA Regs 13, Sch, para 1

S2643

S2644 Part-time work

The employment that ends may have been P/T, that is not remunerative (see ADM
Chapter R2). How this affects the claim will depend on when the employment
ended.

S2645

If employment ends before the first day of entitlement disregard any earnings
except (1) any
1. payment by way of a retainer including
1.1. statutory guarantee payments
1.2. payments made where a person has been suspended on medical or
maternity grounds.
2. awards made under employment protection or trade union law (including "out
of court" settlements)

1 JSA Regs 13, Sch, para 2

S2646

If employment ends on or after the first day of entitlement, take any earnings from it
into account in the normal way.

S2647

The employment will not have ended where
1. the contract of employment is still current or
2. the contract of employment comes to an end before the beginning of a period
of absence and it is expected that the claimant will resume employment after
the period of absence because
2.1 there is some express arrangement that employment will resume or
2.2 it is reasonable to assume that a long standing practice of
re-employment will continue.

[S2648-S2650]

S2651 Emoluments S2630

Emoluments are forms of profit or gain from employment, including perks or
advantages of the employment. They may be in money or in kind. They accrue while
the claimant is employed but may not be paid until the employment ends. Examples are
1. payments made for items that the employer had previously agreed to pay, for
example subscriptions to a private health scheme, or payment of a child's
school fees
2. payments of employees' expenses incurred during the employment, for
example a car mileage allowance, travelling expenses, or the cost of
overnight accommodation
3. rights under a share option agreement (1)
4. pension lump sums, where entitlement accrued during working life and not
simply because of the employment ending. Employees are automatically
entitled to such lump sum payments from their pension schemes.
5. lump sum payments of commuted pension where entitlement to the pension
accrued before the employment ended. These may be paid under schemes
that allow employees to cash in part of their weekly pension entitlement. The
amount cashed in is then taken as a lump sum.
Note:
This does not include any part of the sum paid because of enhancement due
to the employment ending. If the evidence shows that this may be the case, ask the
employer for full details of any enhancement.
Note: In 4.,this does not include any part of the lump sum paid because of
enhancement due to the employment ending, for example in an early retirement or
redundancy package. If the evidence shows that this may be the case, ask the
employer for full details of any enhancement.
1 R(U) 5/92
Holiday pay

S2652 Employment terminated S2059 S2630 S2728

A person may receive a payment of holiday pay on the termination of employment. If
the holiday pay is payable before the first day of entitlement it should be
disregarded (1).
1 JSA Regs 13, Sch, para 1

S2653

S2654 Remunerative work

Where the employment was remunerative the holiday pay should be disregarded (1).
1 JSA Regs 13, Sch, para 1(1)

S2655

S2656 Part-time work

The employment that ended may have been P/T and therefore not remunerative. If
it ended on or after the first day of entitlement the holiday pay should be treated as
earnings and taken into account in the normal way. This means that the amount of
JSA payable may be reduced for the appropriate period. Any holiday pay payable
more than four weeks after the P/T work ended should not be treated as earnings. If
it ended before the first day of entitlement the holiday pay should be disregarded (1).
1 JSA Regs 13, Sch, para 2

S2657 Mariners

Special rules apply to mariners (1) employed on vessels not used wholly or mainly for
the disposal of sludge.

1 SS (Mariners Benefits) Regs 1975, reg 2

S2658

Such mariners are not regarded as available for employment (see ADM Chapter R4)
on any day in the period of leave where
1. they are entitled to leave with pay when a voyage ends, and
2. their employment is terminated before the end of that period of leave.

S2659

Where the employment has terminated holiday pay should be disregarded (1).
1 JSA Regs 13, Sch , para 1

S2660 Employment interrupted

If employment is interrupted on or after the first day of entitlement all holiday pay is
taken into account in the normal way with any payable more than four weeks after
the interruption (1) not treated as earnings.
1 JSA Regs 13, reg 58(1)(c)

S2661 Remunerative work

Where employment was remunerative and is suspended any holiday pay is taken
into account in the normal way.

S2662 Part-time work

Where part-time employment is suspended any holiday pay received on or after the
first day of entitlement is taken into account in the normal way but any payable more
than four weeks after (1) is not treated as earnings.

1 JSA Regs 13, reg 58(1)(c)

[S2663]

S2664 Statutory redundancy payments S2630

Employees may receive statutory redundancy payments on termination of
employment. Such payments are capital and do not affect JSA.

S2665

An employer may pay employees more redundancy pay than they are entitled to
under the law. Any excess is not exempt from the definition of a compensation
payment (see S2630). This means that where P/T employment ceases on or after
the first day of entitlement the DM should calculate the period over which the
compensation payment should be taken into account.

S2666 S2630

Some employees may not receive statutory redundancy payments that they are
entitled to. Redundancy type payments for example severance, ex-gratia or golden
handshakes may be paid instead. In these circumstances only an amount of such a
payment up to the level of the employee's actual entitlement to a statutory
redundancy payment is capital. Where P/T employment ceases on or after the first
day of entitlement the DM should calculate the period over which the compensation
payment is to be taken into account (see S2675 et seq).

S2667 Payments in kind S2630

Payments in kind (see S2509) are not compensation payments (1). They are not
earnings and should not be taken into account.
1 JSA Regs 13, reg 58(2)

[S2668-S2671]

S2672 Bonus payments

A person may receive a bonus payment on the termination of employment. The DM
should consider the facts of each case to determine if the bonus payment is a
compensation payment. Facts to be considered include
1. why has the bonus payment been made and
2. does the employer normally run a bonus scheme to reward employees for
length of service, quality of work etc. If so, how much is normally paid?

Example

Perry was in remunerative work for the period from January to June. His employer
promised him a loyalty bonus if he worked for the company for over four months.
The loyalty bonus of 150 was paid when Perry left in June. Perry claims JSA.
The DM decides that the loyalty bonus is
1. not a compensation payment because the bonus payment was a reward for
working for the employer for over four months and
2. earnings which are disregarded because remunerative work has ended (see S2634).

[S2673-S2674]

S2675 Calculation of period compensation payment taken into account S2632 S2666 S2713 S2768

The period over which a compensation payment is taken into account is a
continuous period. It is not affected by the days on which a person would normally
have worked (see flowchart at S2768).

S2676

The period starts on the date on which the payment is treated as paid (1) (see S2769
et seq). When it ends will depend on what the employer says about the payment.
The payment may be wholly or partly
1. in lieu of notice or
2. because of the early termination of a contract of employment for a term
certain (a "fixed term contract") or
3.
for a combination of the reasons listed in 1. and 2. or
4. for another reason.

1 JSA Regs 13, reg 54(8), reg 56; 2 TULR (C) Act 92, s 188-192

S2677

The period will end (1) on the
1. expiry date, which is based on
1.1 the period of notice or
1.2 the date when any fixed term contract was due to run out (see S2714)
or
2. date on which any consultation period would have ended (see S2744) or
3. standard date, which is worked out using a set formula (see S2750).
1 JSA Regs 13, reg 54(8)

S2678 When period ends - summary S2682

Where an employer says that the compensation payment is
1. in lieu of notice or because of the early termination of a fixed term contract
and
2. not also in lieu of consultation
the period ends on the expiry date (1).

1 JSA Regs 13, reg 54(10)

S2679 S2743 S2750

Where an employer says that the compensation payment is in lieu of notice or
because of early termination of a fixed term contract, the period ends on the later of (1)
1. the expiry date or
2. the standard date.
1 JSA Regs 13, reg 54(8)(b)

S2680

S2681 S2682 S2750

In any other case, for example, where an employer says that the compensation
payment is not of any nature (1), the period ends on the standard date (2).

1 R(U) 1/94; 2 JSA Regs 13, reg 54(8)(c)

S2682

The guidance at S2678 - S2681 is summarized in a flowchart at S2768.

S2683 Maximum period

The period over which a compensation payment can be taken into account is limited
to 52 weeks from the date on which the payment is treated as paid (1). This is so even
where payments are made for longer periods.
1 JSA Regs 13, reg 54(9)

Example

Employment ends on 20th October. Compensation of 62 weeks is due to be paid on
that day. The payment would normally be taken into account up to 26 December of
the following year. It is a compensation payment so it can only be taken into account
for the period 20th October to 17th October of the following year, 52 weeks after.

S2684

The expiry date

S2685 Meaning of the expiry date S2743 S2751 S2767 S2768

The expiry date means (1)
1. the date on which any period of notice
1.1 was due to run out under statute, contract or custom (see S2687 and
S2704) or
1.2 would have run out had it not been waived or
2. where the period of notice is longer, than the period given in 1.1., the date on
which that longer period runs out (see S2725) or
3. the date on which any fixed term contract was due to end (see S2714).
1 JSA Regs 13, reg 54(10)

S2686 Meaning of period of notice S2710 S2712 S2750

Period of notice means (1) the period of notice of termination of employment
1. that a person is entitled to by
1.1 statute or
1.2 contract (whichever is the longer) or
2. if they are not entitled to such notice, the period of notice which is customary
in the employment.
1 JSA Regs 13, reg 54(10)(a)
Entitlement to notice

S2687 Contractual and statutory entitlement differs S2685 S2716

The period of notice to which the claimant is entitled is the longer of
1. the period to which the claimant is entitled by contract (see S2693) and
2. any statutory minimum (see S2688).

S2688 Statutory right to minimum period S2687

Employment protection law gives most employees the right to a minimum period of
notice (1). The exceptions are
1. crew members on ships registered in the UK, employed under crew
agreements approved by the Secretary of State (2)
2. crown servants and members of the armed forces (3)
3. employees who have broken their contract of employment (see S2701).
Note:
Most employees on offshore oil and gas platforms in British sectors of the
Continental Shelf are entitled to notice.

1 ER Act 96, s 86; 2 s 199; 3 s 191 & 192

S2689

Employees must have been continuously (1) employed for one month or more before
being entitled to minimum notice (2) under statute. The amount of notice they should
get depends on how long they have been employed. They should be given at least
1. one week's notice, if they have been continuously employed for less than two years
2. one week's notice for each year of employment, if they have been
continuously employed for between two and twelve years
3. twelve weeks notice if they have been continuously employed for twelve
years or more.

1 ER Act 96, part XIV; 2 s 86

S2690

Employees who have been continuously employed for four weeks or more should
give their employers at least one week's notice (1). This does not increase with longer
service.

1 ER Act 96, s 86

S2691

Fixed term employees on a determinate fixed term contract have the end date of
their contract notified to them at the start of their contract, and those on project work
have the same right to legislative notice as other employees.

S2692

S2693 Contractual entitlement S2687

The period of notice due under a contract is usually stated in the contract. But that
period may be extended by agreement between the employer and employee, for
example by a redundancy agreement. The period of notice agreed then becomes
the period due under the contract.

S2694

If there is evidence that this may have happened for example, if the employer pays
more PILON than was due under the written contract ask to see a copy of the
agreement. If there is no written agreement, ask to see any other evidence of the
change.

S2695

Contractual entitlement is affected if the agreement gives the employee a legal right
to a longer period. In such a case, the employee is contractually entitled to the
longer period. If the agreement simply provides for more compensation than would
otherwise be due, contractual entitlement is not affected.

S2696

The period of notice due may not be stated in writing. If so, ask the employer and
employee whether it was agreed verbally. If it was and they agree on the period
due, that period will be the period due by contract.

S2697

There may be no written or verbal contract. Under common law a reasonable period
of notice is an implied term of a contract of employment (1). The DM should consider
what is reasonable taking account of all the circumstances and the custom in the
type of employment.

1 R(U)37/53; R(U)4/56(T); R(U)10/58; R(U)10/64; R(U)5/74

S2698

The DM should note that
1. employees may be paid PILON at the same rate as their earnings. The period
might then be considered to be the period implied under their contracts
2. the higher an employee's rate of pay and status, the longer the period of
notice should be
3. an employee's length of service and status can be compared with other
employees, whose contractual entitlement is known.

S2699 Employment terminated by employee

An employee is not entitled to notice from the employer if it was the employee's
initiative to end the employment.

S2700 Employment terminated by mutual agreement

Employees are entitled to notice if they agree to an employer's suggestion or give in
to their pressure (see S2732 where rights to notice are waived). Employers may still
make payments in such circumstances. The DM should ask for evidence of the
circumstances that led up to the termination. A determination can then be made as
to whether the initiative came from the employer or the employee.

S2701 Employee dismissed for misconduct S2688 S2755

Employers may pay compensation even if they have dismissed employees without
notice, for example for breach of contract, or misconduct. This is known as summary
dismissal. Contracts of employment often state the offences that will attract
summary dismissal.

S2702

Employees who have broken their contracts are not usually entitled to notice. But an
employer may not be sure that summary dismissal was justified, and may pay
compensation. If the employer
1. says that PILON has been paid as per statute or contract, accept the
employer's statement and treat the claimant as being entitled to notice
2. does not say that the payments were in lieu of notice, accept the claimant has
no right to notice but not where there is clear evidence to the contrary.

S2703

Where it is accepted that no notice is due, there can be no expiry date. The
standard date should then be used (see S2750).

S2704 Notice customary in the employment S2685

Not all employees are entitled to statutory notice. Some employees have contractual
entitlement. Some have neither statutory nor contractual rights to notice, for
example civil servants.

S2705

In such cases, the expiry date is based on the period of notice normally given in the
employment. This is known as the notice customary in the employment. The expiry
date is the date on which the customary notice is or would be due to run out (1).
1 JSA Regs 13, reg 54(10)

S2706 Civil servants

Civil servants have no statutory or contractual rights to notice. The DM will need to
find out what is customary. Evidence can be found in publications detailing the
terms and conditions of service for civil servants, such as the
1. Civil Service Management Code
2. Pay and Conditions of Service Code
3. relevant Departmental codes.

S2707

Departments frequently run voluntary early retirement or severance schemes.
Publications that advertise such schemes may also provide evidence of customary
notice.

S2708

Customary notice may vary according to how the employment ends. Where there is
compulsory redundancy, it is customary for departments to give
1. 6 months notice to all except casual staff (subject to 2. and 3.)
2. 9 months to those aged over 60 with between 10 and 25 years service
3. 12 months to those aged over 60 with less than 10 years service.
Note:
The periods in 2. and 3. cannot be extended past the 65th birthday.

S2709

Where redundancy is voluntary, it is customary for most Departments to negotiate
notice with the employee. Such notice is either explicitly or implicitly agreed.

Example 1

Employee and employer agree that the employee will work for another three months
before the employment ends. Both parties have agreed that the notice period is
three months. The customary notice is also three months.

Example 2

Employee and employer agree that the employee will leave on a particular date.
That date is one month from the date on which the agreement is made. There is an
implicit agreement to one month's notice and the customary notice is therefore one
month.

S2710 Payment made for a period longer than notice period

The expiry date is the date the longer period would have been due to run out if the
employer says a compensation payment has been paid for a period longer than the
period of notice (see S2686). This does not apply if the
1. claimant had a fixed term contract (see S2714) or
2. DM considers it unreasonable (see S2711)1.
1 JSA Regs 13, reg 54(10)

Example

Max claims JSA after being made redundant. He is entitled to twelve weeks notice.
Max works six weeks of his period of notice after being given notice by his
employer. His employer says that the payment which was made to Max when he
finished work included twelve weeks PILON.
The DM does not have to consider a longer period because the employer says she
has paid Max twelve weeks PILON which is no more than the period of notice he
was entitled to.
Note The DM would have to consider whether it is unreasonable to extend the
expiry date to the date the longer period would have run out if the employer had said
she paid more than twelve weeks PILON.

S2711 S2710

To determine if it is unreasonable to extend the expiry date to the date when the
longer period would have run out, the DM should take into account
1. the amount of the compensation payment and
2. the level of pay normally received by the claimant in the employment (1) and
3. any other relevant fact (2).

1 JSA Regs 13, reg 54(11); 2 R(SB) 6/88

S2712

The expiry date is the date when the
1. longer period is due to run out if the DM does not consider it unreasonable (1) or
2. period of notice (see S2686) runs out (see S2725) if the DM does consider it
unreasonable (2).
1 JSA Regs 13, reg 54(10)

Example 1

Brian earns 150 a week. He is entitled to four weeks notice. He gets 900 PILON
when his employment ends which the employer says is for six weeks.
The DM decides the expiry date is the date when the six weeks PILON runs out
because it is not unreasonable as the payment made by the employer is equal to
the pay Brian would normally earn over six weeks.

Example 2

Amrit earns 200 a week. She is entitled to four weeks notice. She gets 800
PILON when her employment ends which the employer says is for 26 weeks.
The DM decides the expiry date is the date when the period of notice runs out
because it is unreasonable to extend the expiry date as the payment made by the
employer is equal to the pay Amrit would normally earn over four weeks.

S2713 Payment made for a period shorter than notice period

The DM should calculate the period over which a compensation payment should be
taken into account as normal (see S2675 et seq) where
1. an employer pays or
2. an employee accepts, for whatever reason
a compensation payment for a period shorter than the notice period (1).
1 R(U) 1/94

Example

Joan was in remunerative work until 28.2.14. She claims JSA. On termination of her
employment, her employer pays two weeks PILON because this is all the employer
could afford to pay. Joan's contract states that she is entitled to four weeks notice.
The DM calculates the period over which the compensation payment (PILON)
should be taken into account and determines that the expiry date applies. The
compensation payment is taken into account for the period that the notice was due
to run out under Joan's contract, that is four weeks.

S2714 Fixed term contracts S2677 S2685 S2710 S2750

Some employees have contracts of service that state the period of the employment,
for example a number of years. These are called contracts for a term certain or fixed
term contracts.

S2715

Not all such contracts provide simply for employment for a stated period. Some
provide that employment can
1. end during the stated period, providing notice is received or
2. continue after the end of the stated period until notice is received.

S2716

Where an employee was employed under a fixed term contract, ask to see a copy of
it. Where the employee was entitled to notice, the guidance in S2687 et seq should
be applied.

S2717

A fixed term contract may end before completion of the employment period
provided. Payment may then be made as compensation for the early termination of
the contract. The amount paid is not relevant. The expiry date is the date on which
the contract was due to expire (1).
1 JSA Regs 13, reg 54(10)

S2718 Date on which notice given

When considering the period of notice, the DM must first establish the date notice
was given.

S2719 Receipt of notice

Notice is given only when it is
1. received by
1.1
the employee (1) or
1.2
the employer or
1.3
someone acting on their behalf or
2. mutually agreed between the parties involved.

1 Brown v. Southall & Knight (1980) ICR 617 at 626-9

S2720

To be effective notice must be received by the employee or someone acting
officially on their behalf. A notification of proposed redundancies sent to the DM (1) is
not notice to terminate the employment.

1 TULR (C) Act 92, s 193

S2721

Notice is given when both the employee and employer know that the employee will
leave on a specific date.

Example 1

Cleo is on holiday abroad. On Friday 15th November her employer posts her notice
that her employment will end on Friday 22nd November. She returns home and
reads the letter on Friday 29th November. Notice is given on 29th November.

Example 2

On Friday 3rd May, Eric's employer posts him notice that his employment will end
on Friday 10th May. Eric is on holiday, but rings home on Tuesday 7th May. His
mother reads the notice to him over the phone. He returns home and reads the
notice himself on Friday 17 May. Notice has been given on Tuesday 7th May.

S2722 Notice

Notice can be given orally or in writing. It must be definite and clear. Notice cannot
be valid if it states that one party can withdraw without the agreement of the other. It
is valid if it shows that notice could be withdrawn by mutual consent.

Example

An employer sends a letter giving the date on which an employee must leave under
a voluntary redundancy scheme. It advises that the employee can withdraw if the
financial estimates given are wrong. It says that the notice can be withdrawn by
mutual agreement. The letter does not count as valid notice unless and until the
employee indicates their acceptance.

S2723

A provisional date of termination in a general statement is not effective notice.
Whether any notification or announcement is notice to terminate employment is a
question of fact. It may simply be a general warning of closure or an intention to
reduce staffing (1).
1 R(U) 6/73; R(U) 4/80

Example 1

On Tuesday 14th May Diana is warned by letter that there will be redundancies. She
is told that her name is on the list of employees to be made redundant. The
employer proposes to give formal notice on Friday 17th May.
On Monday 20th May she receives notice that her employment will end on Friday
24th May. Notice is received on Monday 20th May. The letter of 14th May is only a
warning letter and is not effective notice.

Example 2

In January, employees receive notice that their factory will be closing on a gradual
basis. This is probably going to start in March and end in November. This general
notice of the intended closure is not effective notice.

S2724

S2725 Calculation of date notice runs out S2685 S2712

The date on which a period of notice runs out must be decided. Do not count the
day on which the notice is received. For example, an employee entitled to one
week's notice, receives notice on Monday. That notice runs out on the following
Monday. This applies even if
1. notice is received before the employee has done any work on that day or
2. it is stated that the week's notice runs out before the date calculated.
Note:
This does not apply where notice is to operate from a future date.

S2726

Where a month's notice is due, the date that notice runs out will vary. It will depend
on whether notice was received on the last day of the month or not (1).
1 R(U) 5/73; R(U) 9/73

Example 1

Enya is dismissed without notice on 14th June. She is entitled to one month's
notice. Her notice period runs out on 14th July.

Example 2

Frank is dismissed without notice on 29th February. He is entitled to one month's
notice. His notice period runs out on 31st March.

S2727 Notice to operate from a future date

Notice can operate from a future date (1). It may be given before the employment
terminates but not have effect until after then.

1 Adams v GKN Sankey Ltd [1980] IRLR 416

S2728

The employer must state that the notice is to run from a future date. This may be
implicitly or explicitly. It does not apply where the employer simply attributes the
PILON to a future period. When working out when such a period of notice runs out,
include the date it is said to operate from.

Example 1

A letter of notice is prepared on Friday 17th May, but is dated Monday 20th May. It
is handed to the employee personally on 17th May. The letter says that employment
will end on Friday 17th May. The employee is entitled to one week's notice.
The employer is implicitly saying that notice will run from a future date, Monday 20th
May. Notice was received by the employee on 17th May. A period of one week from
and including Monday 20th May ends on Sunday 26th May, that is when the notice
runs out.

Example 2

A letter of notice is prepared on Friday 17th May and is dated 17th May. It is handed
to the employee personally on that same date. It tells her that employment will end
on 17th May and that her notice is to run from Monday 27th May. She is entitled to
one week's notice.
The employer is explicitly saying that notice will run from a future date, Monday 27th
May. The employee received notice on 17th May. A period of one week from and
including Monday 27th May ends on Sunday 2nd June, when the notice runs out.

Example 3

A letter of notice is prepared on Friday 17th May and is dated 17th May. It is handed
to the employee personally on that same date. It tells her that employment will end
on 17th May. She is entitled to one week's notice.
The letter also says that the employer is to pay her 150 PILON for the period
Monday 27th May to Saturday 1st June. This is because she has got holiday pay for
week beginning 20th May.
In this case the employer is not saying that notice will run from a future date. The
employee received notice on Friday 17th May. It runs out on Friday 24th May.
Note:
See S2652 for the treatment of holiday pay.

S2729 Notice shortened or extended

Employment may not always end on the date given in the notice. Before that date
arrives, further notice may be received that it will end on a different date. The
employer and employee might also agree that the notice period should be shortened
or lengthened.

S2730

When this happens notice does not have to be given again. Do not recalculate the
notice from any later date (1). Full notice does have to be given again if
1. notice is cancelled rather than shortened or
2. employer and employee enter into a new contract of employment, rather than
lengthening the notice period.

1 Mowlem Northern Ltd v Watson [1990] IRLR 500

S2731

Where there is a new contract the notice due is the period to which the employee is
entitled under it. It may also be the period which is customary in the employment.

S2732 Waiver of notice S2700

Rights to notice may be given up (waived)1. There may be evidence that this has
happened. For example, employees may sign agreements waiving their rights to
notice. Employees waive their rights when they
1. leave their employment voluntarily or
2. agree with their employers to leave without serving out notice or getting
PILON.
1 ER Act 96, s 86(3)

S2733 Calculation of date notice would have run out

Where notice has been waived, the expiry date is the date that the notice would
have run out. Employees leaving voluntarily, or mutually agreeing to leave, would be
entitled to the amount of notice that the employer must give. The amount that has to
be given by the employee is not relevant. There may be clear evidence of the date
that the notice would have run out.

Example

On Monday 6th May, Angus is given notice that he is to be made redundant. The
letter says that his employment will end on Friday 30th August. He is entitled to
twelve weeks notice. He is also told that if he wants to leave on Friday 31st May he
can do so by agreeing to it in writing. He agrees to leave on Friday 31st May.
In this case the notice would have run out on Friday 30th August. That is the date on
which his employment would have ended if he had not waived his right to notice.

S2734

In most cases there will be no evidence of the date when notice would have run out.
Work it out from the date the employer and employee both knew exactly when the
employee would leave. Do not include that date in the calculation.

Example 1

On Friday 6th September Freda tells her employer that she will be leaving on Friday
13th September. She has to give her employer one week's notice. The employer
would have had to give her six week's notice. Freda is paid compensation.
Freda waives her right to notice by leaving voluntarily. The DM calculates the date
that notice would have run out.
There is no evidence of the date notice would have run out so it is worked out from
the 6th September. That is the date when both Freda and her employer knew when
the employment would end. Six weeks from the 6th September, excluding that day,
ends on Friday 18th October. That is when the notice period would have run out.

Example 2

An employer advertises a voluntary redundancy scheme. Employees are told that if
they are accepted under the scheme they must leave their employment on Friday
28th June.
Kevin, who is entitled to twelve weeks notice, applies on a form dated Monday 6th
May. He hands the form to his employer on that date. On Monday 20th May, his
employer gives him a letter dated that day, telling him that he has been accepted on
the scheme.
It details the payments that Kevin will be entitled to. It also confirms that the date of
leaving will be Friday 28th June, subject to Kevin's written agreement to the terms
offered. On Tuesday 21st May Kevin signs his agreement and posts it the same
day. His employer gets it on Thursday 23rd May.
Kevin has waived his rights to notice by leaving with mutual agreement. The date
notice would have run out is worked out from Thursday 23rd May. That is the date
when both Kevin and his employer know that the employment will definitely end on
Friday 28th June. 12 weeks from Thursday 23rd May, excluding 23rd May, ends on
Thursday 15th August, when the notice period would have run out.

[S2735-S2739]

Payment for consultation period in employment protection law

S2740

There are rules that must be followed before employees can be made redundant (1).
One of these is that employers have to consult employees' representatives as soon
as possible. Those representatives may be
1. elected by the employees or
2. representatives of a recognized trade union. S2423 gives further details.

1 TULR (C) Act 92, s 188-192; TURER Act 93, s 34

S2741

Employees representatives can complain to an Employment Tribunal if an employer
does not follow the rules. The Employment Tribunal can then make a protective
award (see S2422). If the employer fails to pay, the employee can complain to an
Employment Tribunal.

S2742

An employer may dismiss employees as redundant without consulting the
employees representatives. The employer may then pay compensation. This is
often in return for the representatives not complaining to an Employment Tribunal.

S2743 Calculation of period

Some or all of a payment of compensation may be said to be in lieu of consultation.
The period over which it is taken into account will end on the later of (1)
1. the date on which the consultation period would have ended (see S2744)
2. the expiry date, where the payment is also PILON or because of early
termination of a fixed term contract (see S2685 et seq)
3. the standard date (see S2750).
Note:
See S2679 and flowchart at S2768.
1 JSA Regs 13, reg 54(8)

S2744 Date consultation period would have ended S2677 S2743 S2768

The date the consultation period would have ended depends on
1. the number of employees that the employer dismissed, or intended to
dismiss, as redundant and
2. the period within which they were to be made redundant.

S2745

The consultation period ends on
1. the 90th day after consultations began, if 100 or more employees are to be
dismissed within 90 days or
2. the 30th day after consultations began, if 20 or more employees are to be
dismissed within 90 days.

S2746

The 30 and 90 days start on the day that consultations began. If consultations did
not begin before employment ended, the period starts on the day after the
employment ended. When working out the consultation period, all seven days of the
week should be used.

Example 1

An employer intends to dismiss 250 employees as redundant within 90 days.
Consultations with the unions start on 6th May. Ida's employment ends on 31st May.
She gets compensation in lieu of consultation. The period of consultation starts on
6th May and ends on 3rd August.

Example 2

An employer intends to dismiss 120 employees as redundant within 90 days.
Consultations with the unions have not begun when Noel's employment ends on
31st May. He gets compensation in lieu of consultation. The period starts on 1st
June and ends on 29th August.

[S2747-S2749]

S2750 The standard date - other cases S2677 S2703 S2743 S2768

Compensation is taken into account over a period starting on the date it is treated as
paid (1). When that period ends depends on what the employer says about it. Unless
the employer says that some or all of the compensation was paid
1. in lieu of notice (see S2686) or
2. on account of the early termination of a fixed term contract (see S2714)
the standard date should be applied (see S2679 - S2681).
1 JSA Regs 13, reg 56 & 54

S2751 Meaning of the standard date

The standard date means (1) the earlier of
1. the expiry date (see S2685 et seq) and
2. the last day of the period worked out by using a set formula (see S2760).
1 JSA Regs 13, reg 54(10)

S2752 Employee works out notice due from employer

The expiry date is the last day of the notice period due to an employee. But
employees who get compensation may stay in their employment for the whole of
that period. The expiry date will then be the last day of that employment. That will
also be the standard date.

S2753

Employees may not be allowed to stay in their employment for the full notice period
due. The expiry date will then be after the last day of employment. The standard
date will also be after the last day of that employment.

S2754

Some employees may be allowed to work for longer than the notice period due to
them. Their expiry date will then be before the last day of their employment. The
standard date will also be before the employment ends.

S2755 No notice due

In some cases there may be no period of notice due to an employee. For example,
they may
1. have been dismissed summarily due to misconduct (see S2701) or
2. be in employment where no notice is due under contract, statute, or by
custom, for example, MPs or clergy.

S2756

In such cases, an expiry date cannot be worked out. The standard date will then be
the last day of the period worked out by using the set formula.

[S2757-S2759]

S2760 Calculation of period - the set formula S2751

The DM should
determine the amount of compensation the claimant is due
divide that amount by the maximum weekly amount
round any fraction down to a whole number
treat that number as a period of weeks
work out when a period of that length would end.

S2761 Amount of compensation

Employers must give employees a written statement showing how the redundancy
payment has been worked out (1). If there is any doubt, ask to see a copy of the
statement.

1 ER Act 96, sec 165

S2762

The exception to this rule is where an Employment Tribunal makes an award,
stating the amount to be paid. The employer does not then have to provide a written
statement. The Employment Tribunal report will give details of the amount due.

S2763 Maximum weekly amount

The maximum weekly amount is set by employment protection law (1) (see Appendix
2) and can change (2). It is used to work out
1. awards of compensation for unfair dismissal and
2. redundancy payments and
3. payments made by the government to employees of insolvent businesses.

1 ER Act 96, s 227(1); 2 Employment Rights (Increase of Limits) Order

S2764 S2765

Divide the amount of compensation due by the maximum weekly amount. Always
use the figure that is set on the date that the compensation is due (1). This is so
regardless of the claimant's earnings from the employment.
1 JSA Regs 13, reg 54(10)

S2765 Number of weeks

The result of the calculation in S2764 must be rounded down to the nearest whole
number. That number is treated as a number of weeks. For this purpose week
means a period of seven consecutive days (1).
1 JSA Regs 13, reg 2(2)

S2766 Last day of the period S2767

The DM should work out the period starting on the date the compensation is treated
as paid (1). The period will then last for the relevant number of weeks. It will end on the
last day of that period.
1 JSA Regs 13, reg 54(2)

S2767 Standard date S2768

Compare the last day of the period worked out as in S2766 with the expiry date (see S2685). The standard date is the earlier of the two dates.

Example 1

Liam is entitled to six weeks notice and is given notice on 27 June. His employment
ends on 11 July. Notice would have run out on 8 August. He is due to be paid
4,000 by his employer on 11 July (2,408 is statutory redundancy pay, 200 is
holiday pay and the rest is ex gratia). The maximum weekly amount is 280.
Compensation is 4,000 - 2,608 = 1,392 divided by 280 = 4 (rounded down).
A period of four weeks starting on 11 July ends on 7 August.
The standard date is the earlier of 8 August (the expiry date) and 7 August (the date
worked out using the set formula).
The standard date in this case is 7 August.

Example 2

Lynn is entitled to three calendar months notice. On 31 May she is dismissed
without notice. Notice would have run out on 31 August. She gets an ex gratia
payment of 2,570 on 1 June. The maximum weekly amount is 280.
2,570 divided by 280 = 9 (rounded down). A period of nine weeks starting on
1 June ends on 2 August.
The standard date is the earlier of 31 August (the expiry date) and 2 August (the
date worked out using the formula). The standard date in this case is 2 August.

S2768 S2675 S2682 S2743

The guidance in S2675 - S2767 is summarized in the following flowchart which
should only be considered in cases where the claimant's P/T work terminates on or
after the first day of entitlement.
Calculation of period for JSA - flowchart
Has the employment terminated?
NO
No further
YE
action required
Has the claimant received a compensation payment?
NO
(see S2630 et seq)
YES
Is any of it in lieu of notice or
Is any of it in lieu
for the early termination of a
NO
of consultation?
NO
fixed term contract?
YES
YES
Is it also in lieu of
YES
Is it also in lieu of notice
consultation?
or for early termination of a fixed term contract?
NO
NO
Period
Period ends
Period ends on
Period
ends on
on the later
the later of
ends on of
The expiry
The date the consultation
The standard
date S2685
period would have ended
date S2750
S2744 The calculation and treatment of earnings

S2769 Introduction S2015 S2676

The following guidance deals with
1. how to decide the period over which earnings should be taken into account
see S2771 et seq
2. how to calculate the weekly amount of earnings - see S2799 et seq
3. the special rules for modifying the amount taken into account - see S2806 et
seq.

S2770 Disregard of fractions

Where the calculation of earnings results in a fraction of a penny, the amount should
be rounded to a penny, either up or down, whichever is to the claimant's
advantage (1).
Note:
If deciding the amount of earnings includes more than one calculation, each
fraction should be rounded to the claimant's advantage.
1 JSA Regs 13, reg 53
Period over which earnings are taken into account

S2771 Calculating the period S2769

To determine the period over which earnings are taken into account the DM needs
to establish
1. the date of claim
2. the first day of the claimant's benefit week (see S2790)
3. the date on which earnings are due to be paid (see S2774 et seq)
4. the date on which earnings are treated as paid (see S2782 et seq) and
5. either1
5.1 the period for which the payment is made or
5.2 the amount of
5.2.a
JSA that would be payable without the earnings and
5.2.b any disregard the DM would normally make on the weekly
amount of the earnings.
Note:
If the payment is in respect of when employment ends see S2798 where
different kinds of earnings are received for overlapping periods.
1 JSA Regs 13, reg 54(2);

[S2772-S2773]

S2774 Date on which earnings are due to be paid S2771 S2782 S2787

To determine the period over which earnings should be taken into account, the DM
needs information on the date a payment is due to be paid. This may be different
from the date a payment is actually made or received. But earnings are often paid
on the date they are due.

S2775

When deciding the date a payment is due the DM should consider that
1. due means legally due, for example under a contract or statutory provision
2. if there is no legal obligation to make the payment on a particular day, the
person or body making the payment should be asked when they consider the
payment is due
3. the date when the payment is received may be assumed to be the due date where
3.1 the available evidence
3.1.a
does not give a due date (1) or
3.1.b
is not considered credible and
3.2 no further evidence can be obtained.

1 R(SB) 33/83

S2776

The date on which a payment of earnings is due will be the normal pay day agreed
in the contract of employment. The terms of a contract
1. may be
1.1 express (in writing or verbal) or
1.2 implied (by the actions of or understanding between the two parties)
and
2. may be varied
2.1 if both parties agree to it (the variation may be express or implied) or
2.2 because of certain action taken by either party (such as dismissal or
resignation).

S2777 Earnings when employment ends

When employment ends, the date on which a payment of final earnings is due to be made
1. is a mixed question of fact and law and
2. depends on the circumstances in which the employment ended and the terms
of the contract.

S2778 Notice given and worked

Final earnings are payable on the dates agreed in the contract of employment
where employment
1. has run its full course, for example a fixed period engagement has reached its
end or
2. is terminated by the employer after due notice has been given and worked.

S2779

This means that the claimant should receive the following payments on the final
pay-day (often the last day of employment)
1. the normal week or month's earnings, including any part week or month's earnings
2. wages held in hand
3. holiday pay.

S2780 Employment terminated by employer without notice

Where the employer terminates employment without due notice they are legally
obliged to pay on the last day of employment (1)
1. wages earned between the end of the employee's previous pay period and
the last day of employment
2. wages held in hand
3. holiday pay
4. a payment in lieu of notice.
Note: The last day of employment is not necessarily the same as the last day the
claimant attended work.
1 R(SB) 23/84

S2781 Employment terminated by employee without notice

Where employment is terminated by the employee without due notice, employers
can rely on the contract of employment to pay
1. wages earned between the end of the employee's previous pay period and
the last day of employment
2. wages held in hand
3. holiday pay on the day that each payment is due to be paid.

S2782 Date on which earnings are treated as paid S2771 S2791 S2798 S2806

The date on which earnings treated as paid may not be the same as the date on
which it is due to be paid under S2774 et seq.

S2783 Earnings due before the first benefit week of the claim

A payment of earnings should be treated as paid on the date it was due, if it was
due to be paid before the first benefit week of the claim (1).
Note:
A payment of may be due before the date of claim and still be within the first
benefit week (see S2790).
1 JSA Regs 13, reg 56(a)

S2784 Earnings due in or after the first benefit week of the claim

If a payment was due to be paid in or after the first benefit week of the claim, it
should be treated as paid on (1) the first day of the benefit week in which it is
1. due to be paid or
2. practicable to take the payment into account (if this rule is used the DM
should record the reasons for using it).
1 JSA Regs 13, reg 56(b)

Example

Alice is unemployed and receives JSA fortnightly in arrears. Her benefit week
ending day is Thursday. She attends the Jobcentre on Thursday 21 November, and
receives two weeks benefit for the period 8 November to 21 November on 23
November.
On 22 November, Alice advises the Department that she received her first payment
of P/T earnings on the evening of 21 November. The payment is made on the day it
is due.
The DM determines that it is not practicable to Alice's earnings into account for the
benefit week 15 November to 21 November, because benefit has already been paid
for that week.
The DM treats the earnings as paid on 22 November, which is the first day of the
first week in which it is practicable to take the payment into account. (See S2807 for
guidance on the special rule which applies when two payments are taken into
account for the same week because of the impracticability rule.)

S2785

The practicability rule cannot apply where notification is received in time for the
income to be taken into account in the correct benefit week but it is not actioned
until after the payment of JSA has been made.

S2786

S2787 Treatment of arrears of earnings

If the amount of a regular payment increases, or the claimant starts to receive a new
payment, the first payment may include arrears. The treatment of the arrears will
depend on whether they were paid on the date on which they were due to be paid
(see S2774).

S2788 Arrears paid on due date

Arrears which are paid on the due date should be
1. treated as paid on the first day of the benefit week in which
1.1
they are paid or
1.2
it is practicable to take them into account (1) and
2. taken into account
2.1
for a period calculated in the normal way (see S2791 et seq)2 and
2.2
from the date on which they are treated as paid.
1 JSA Regs 13, reg 56; 2 reg 54(2)(a)

Example

The claimant has P/T earnings of 10 weekly due each Thursday. The claimant's
benefit week ends on Tuesday.
The P/T earnings are increased to 11 weekly from 12.7.13, but the agreement says
that the increase is not payable until 1.8.13, when payment is made at the new rate
with three weeks arrears, a total of 14.
The DM treats the payment as made on 31.7.13.
The new rate of 11 is taken into account in the benefit week beginning 31.7.13,
and the 3 arrears are taken into account for the period 31.7.13 to 20.8.13.
The total amount of earnings taken into account in the benefit weeks beginning
31.7.13, 7.8.13 and 14.8.13 is 12 (11 plus 1 arrears).
From benefit week beginning 21.8.13, the new weekly rate of 11 is taken into
account.

S2789 Arrears paid after the due date

Arrears paid after the due date should be treated as paid
1. on the first day of the benefit week in which they were due or
2. on the due date if they were due before the first benefit week of the claim (1).
The DM should calculate any overpayment and refer the case to the Secretary of
State to consider recovery (2).
1 JSA Regs 13, reg 56(a); 2 SS A Act 92, s 74

Example

The claimant normally receives monthly earnings in arrears on the last day of each
month.
The claimant's earnings increase from 1 April each year, first payment at the higher
rate being due on 30 April.
Due to administrative problems, the increase is not paid until 30 June, when the
claimant receives the new amount for the month of June and arrears for April and
May.
The DM determines that the arrears for April and May were due to be paid on 30
April and 31 May, and treats them as paid on the first day of the benefit week in
which each was due to be paid.

S2790 Meaning of benefit week S2771 S2783

A benefit week (1) is a period of seven days ending with the day determined by the last
two digits of the claimant's NINO as shown in the following table unless the
Secretary of State arranges otherwise.
NI No.
Day
00 - 19
Monday
20 - 39
Tuesday
40 - 59
Wednesday
60 - 79
Thursday
80 - 99
Friday
1 JSA Regs 13, reg 2(2)
Period for which payment is made

S2791 Identifiable period S2788

If the period for which a payment of earnings is made can be identified, then the
length of time for which it is taken into account will depend on whether the payment
is monthly or not. Where the period for which the payment is made is
1. a
month (1), it should be taken into account for a period ending with the date
immediately before the next monthly payment would have been treated as
paid (whether or not the next monthly payment is actually paid) or
2. other than a month (2), it should be taken into account for an equivalent period
(for example a payment for a week should be taken into account for a week).
The period begins from the date determined by following the guidance at S2782 et
seq.
1 JSA Regs 13, reg 54(2)(a); 2 JSA Regs 13, reg 54(2)(b)

S2792 Employer's pay arrangements

Where an employer has specific pay arrangements, which mean employees are
paid at specific intervals, such as monthly, a payment should be taken into account
for a period equal to the pay interval (1).
Note: Earnings from holiday pay and compensation payments which are made for
part of a day should be taken into account for a day (2).
1 R(IS) 10/95; 2 JSA Regs 13, reg 54(7)

S2793 Supply teachers

An LA may create a pool or panel of supply teachers. The LA calls on these
teachers as and when needed, but the teachers may refuse work if they wish. In
these circumstances the DM should note that
1. the supply teachers have a separate contract of employment for each period
they work (1) but
2. if the LA pays them at regular intervals for the work they have done, each
payment should be taken as paid for a period equal to the pay interval (2).
1 R(U) 2/87; 2 R(IS) 10/95

Example

A supply teacher is paid on the 16th of every month for all the work she has done in
the previous month. On 16 October she is paid for the four days she worked during
September. The DM takes the payment into account for one month.

S2794 Territorial army or volunteer reservists

Where a claimant, who is a member of the reserve forces (see Appendix 1),
receives a payment in respect of their attendance at their annual training camp
(known as "annual continuous training"), then this payment of earnings has to be
taken into account over a period
1. equal to the length of the training camp or
2. of 14 days where the training camp exceeded a period of 14 days (1).
The period of attribution begins on the day that the payment is treated as paid (2).
1 JSA Regs 13, reg 54(3); 2 reg 54(4)

S2795

S2796 No identifiable period

If the period for which a payment is made cannot be identified (i.e. it's not in respect
of a week, month etc) then the DM should determine the number of weeks over
which a payment has to be taken into account by applying the formula (1)
E
J + D
where-
E is the amount of net earnings
J is the amount of JSA which would be payable had the payment not been made
D is an amount equal to the total of the sums disregarded from the payment.
1 JSA Regs 13, reg 54(2)(c)

Example

Sheila is in receipt of JSA of 40 per week and works part-time for the local council.
She has been offered a payment by her employer to redress historical pay
inequalities between female and male employees. Sheila's employer offers her a
payment of 7,200. She can agree to accept this sum as a final and full settlement
of any unequal treatment claim that she could have brought against her employer.
Alternatively, Sheila can have the option of taking a net payment of 720 but this
amount would be deducted from any future settlement won through action at an
Employment Tribunal or as part of any negotiated settlement between herself and
her employer.
Sheila decides to accept the sum of 720 and this is duly paid to her with her salary
by the employer. The DM decides that the payment is a payment of earnings but
cannot identify a period in respect of which the payment is made. The DM therefore
performs the calculation in S2796 where:
720 is divided by 45 (JSA of 40 plus 5 disregard) = 16
The DM takes the payment into account for 16 weeks at the weekly rate of 45.

S2797

If the calculation does not result in a whole number of weeks, the balance of the
payment should be taken into account for a corresponding fraction of a week (1).
1 JSA Regs 13, reg 54(13)

Example

The claimant is paid a one-off bonus of 150. The period for which the payment was
made is not identifiable. 5 of a weekly payment of the income would be
disregarded. The claimant would be entitled to 65 a week without the payment.
The 150 payment is divided by 70 (65 JSA plus 5 disregard). The DM
determines the claimant's income is 70 a week for a period of 2 1/7 weeks (two
weeks and one day).

S2798 Different kinds of earnings received for overlapping periods S2771

If different kinds of earnings are received from the same source, and the periods
over which the earnings would be taken into account overlap, the earnings should
be taken into account
1. for the total of the periods which apply to each of the different kinds of
earnings and
2. from the earliest date on which any of those earnings would be treated as
paid under S2782 et seq (1) and
3. in the following order (2)
3.1. normal earnings
3.1. compensation payments
3.1. holiday pay
Note
1: Pay in lieu of remuneration is paid in place of a person's normal wages or
salary. Pay in lieu of notice or remuneration is included in the definition of a
compensation payment
1 JSA Regs 13, reg 54(5); 2 reg 54(6)
Calculation of weekly amount

S2799 Period of a week or less S2769

Where the period for which earnings are paid is a week or less, the weekly amount
will be the amount of the payment (1). But see S2804 et seq and S2812.
1 JSA Regs 13, reg 57(1)(a)

S2800 Period of a month S2803

Where the payment is for a month the weekly amount should be worked out by
1. multiplying the amount of the payment by twelve and
2. dividing the result by 521.
1 JSA Regs 13, reg 57(1)(b)(i)

Example

A payment of 100 is made for a period of a month. The DM calculates that the
weekly amount is 23.07 (100 x 12/52).

S2801 Period of three months

Where the payment is for a period of three months the weekly amount should be
worked out by
1. multiplying the amount of the payment by four and
2. dividing the result by 521.
1 JSA Regs 13, reg 57(1)(b)(ii)

Example

A payment of 100 is made for a period of three months. The DM calculates that the
weekly amount is 7.69 (100 x 4/52).

S2802 Period of a year S2803

Where the payment of income is for a period of a year the weekly amount should be
worked out by dividing the amount of the payment by 521.
1 JSA Regs 13, reg 57(1)(b)(iii)

S2803 Period of more than a week

Where the payment is for more than a week, and S2800 - S2802 does not apply,
the weekly amount should be worked out by
1. multiplying the amount of the payment by seven and
2. dividing the result by the number of days in the period for which the payment
is made (1).
1 JSA Regs 13, reg 57(1)(b)(iv)

Example

A payment of 100 is made for a period of four weeks. The DM calculates that the
weekly amount is 25 (100 x 7/28).

S2804 Calculation of amount where only part of payment overlaps benefit week S2799

Where a payment for one week or less is treated as paid before the first benefit
week of the claim, it may fall to be taken into account for only some days in the first
benefit week. The DM should determine the amount to be taken into account by
1. multiplying the amount of the payment by the number of days in the period of
the overlap and
2. dividing the result by the number of days in the period for which payment is
made (1).
Note:
If the period the payment overlaps is a part week see ADM Chapter S1.

1 JSA Regs 13, reg 57(4)

S2805

Where a payment is for one week or more, and is to be taken into account for some
days only in a benefit week, the DM should determine the amount to be taken into
account by
1. multiplying the amount of the payment by the number of days in the period of
the overlap and
2. dividing the result by the number of days in the period for which the payment
is made (1).
Note:
If the period the payment overlaps is a part week see ADM Chapter S1.
1 JSA Regs 13, reg 57(3)

Example

The claimant receives 400 from a general unemployment insurance policy for a
period of four weeks on 8 May.
She claims JSA on 28 May because the payments from the general unemployment
insurance policy have stopped. She will be paid weekly in arrears on a Thursday.
The payment is treated as paid on 8 May for the period 8 May to 4 June.
The DM determines that for benefit week ending 6 June 5/28ths of the payment
should be taken into account and deducts 71.42 (400 x 5 = 2000/28 = 71.42).
Modifying the amount taken into account

S2806 Two payments from same source and of same kind in same benefit week S2769 S2807

The weekly amount of earnings taken into account in a benefit week should be
restricted where
1. the payment is or has been paid regularly and
2. two payments
2.1 from the same source and
2.2 of the same kind
would be taken into account in the same benefit week following the rules in S2782
et seq (1). The amount should be restricted to the weekly amount which is treated as
paid first.
1 JSA Regs 13, reg 57(4)

S2807 Two payments taken into account for same week because of impracticability rule S2784 S2808

The special rules in S2806 do not apply if
1. it is not practicable to take a payment into account in the benefit week in
which it was due and
2. in the next benefit week in which it is practicable to take it into account the
claimant receives another payment
2.1. of the same kind and
2.2. from the same source
which is to be taken into account in the same week (1).
In these circumstances both payments should be taken into account in that week,
with a separate disregard on each of the payments, if a disregard is appropriate (2).
1 JSA Regs 13, reg 57(4); 2 JSA Regs 13, Sch, para 8

S2808 First of two payments due before date of claim

Where the first of the two payments referred to in S2280 (6) or S2807 was due to be
paid before the date of claim the payment should be disregarded (1).
1 JSA Regs 13, Sch, para 11

[S2809-S2810]

S2811 Averaging of amounts

The weekly amount of earnings may be averaged (1) if the earnings vary or the regular
pattern of work means that the claimant does not work every week. The DM should
average over
1. a complete cycle if there is a recognizable cycle of work (see ADM Chapter
R2 on establishing a recognizable cycle) or
2. five weeks or
3. another period if this means a more accurate weekly amount can be
calculated.

1 JSA Regs 13, reg 57(5)

S2812 S2799

The averaging of the weekly amount of earnings does not change the other rules on
its treatment such as the date that it is treated as paid. This means that earnings
can only be averaged where the claimant is actually in receipt of a payment.

Example 1

Robert works two weeks on and one week off.
In the two weeks he actually works he works 15 hours a week and receives earnings of 80 a week. In the third week, he receives a retainer of 20. The DM determines that the earnings should be averaged over a period of three weeks because that is the period of the recognizable cycle of work. The DM calculates that the average weekly amount of earnings is 60, that is 80 + 80 + 20 3
and takes that amount into account against Robert's entitlement.

Example 2

Maggie works at a school term-time only as a classroom assistant. During the
school holidays she doesn't work and receives no earnings.
The DM can only average Maggie's earnings during term-time when she is actually
in receipt of an income. During the school holidays Maggie receives no earnings so
there are no earnings to take into account.

[S2813-S2999]

Appendix 1
Territorial or reserve forces
Territorial or reserve forces prescribed in SS (Contributions) Regs 2001, Sch 6, Part I.
Royal Naval Reserve
Royal Marines Reserve
Army Reserve
Royal Fleet Reserve
Territorial Army
Royal Air Force Reserve
Royal Auxiliary Air Force
Royal Irish Regiment (to the extent that its members are not members of the regular
naval, military or air forces of the Crown)
Appendix 2
Maximum weekly amount
Payable under section 227 of the Employment Rights Act 1996.

From 1.2.12
430
From 1.2.13
450
From 6.4.14
464
Appendix 3
Statutory guarantee payments
Amount payable to employees under section 31 of the Employment Rights Act
1996.

From 1.2.12
23.50 per day
From 1.2.13
24.20 per day
From 6.4.14
25.00 per day