A council’s power to employ staff is contained in the Local Government Act 1972, s. 112. There are many and varied roles for which a council might seek to employ staff to help carry out the council’s statutory functions and powers. Council staff can include those who are directly employed, supplied through an agency, or a self-employed person (see exceptions below).
Although many of the council’s staff have extensive contact with councillors and committees, it is the corporate body that is responsible for the legal obligations as an employer.
A local council must abide by employment law in the same way as any employer and it has a duty to comply with the statutory responsibilities of health and safety and equality legislation.
A council can employ staff on such reasonable terms and conditions, including pay, as it sees fit. However, employment of staff on terms agreed by the National Joint Council for Local Government Services (the ‘Green Book’) ensures fairness and uniformity. The model contract and salary scale provided below are not mandatory but are recommended.
Although a council can choose to recruit some staff on a self-employed basis, this is not the case for the recruitment of a clerk or responsible financial officer.
In February 2011, it was confirmed that the clerk and RFO must be paid by the employer under PAYE. A clerk and RFO are office holders with specific statutory obligations, therefore they are classed as employees. Your council should inform HMRC to ensure all correct tax and national insurance deductions are made. Please see NALC’s 2012 briefing note on PAYE Arrangements for Clerks and Responsible Finance Officers and the HMRC document Parish and Community Council Clerks PAYE implementation
As part of a holistic approach to managing its staff, a council should carry out a performance review, also called an annual appraisal that usually consists of a performance conversation. The ACAS website provides examples of appraisal forms that can be used to help the council record the process (see templates at the bottom of this page). NALC has produced the guidance How to Manage Poor Performance and provides a template Capability Procedure
The performance review should be a two-way process between the employer and employee enabling both to engage in constructive dialogue about the employee’s job performance; what has gone well and what has not gone as well, factors that have helped or hindered, practical support or development needed, career aspirations. The performance review can identify areas for learning and development on at least an annual basis.
The National Improvement Strategy supports the growth of the Continuous Professional Development Scheme (CPD) for local council clerks and staff. CPD is a personal conscious commitment to maintaining professional knowledge, skills and standards in a particular role. CPD helps to develop an individual’s competence and capability through their working life and enhances the work of their local council and its services to the community. Although the programme is aimed at clerks, councillors are also free to participate in the programme.
Mileage Allowance Payments (MAPs) are paid to your employees for using their own vehicle for business journeys. An employee can be paid a certain amount of MAPs each year without having to report them to HMRC. This is called an ‘approved amount’. Visit the HMRC website for detail of the current amounts. Remember that an employee must be insured for business use and not simply for commuting.
Homeworking Allowance is payable as a reimbursement to employees for reasonable additional costs they incur when working at home under homeworking arrangements. However, unless expressly agreed by the employer, an employee has no automatic right to any payment of expenses for working from home.
Homeworking expenses can include the additional costs of heating, lighting, and metered water. The HMRC website includes an Employment Income Manual, which contains guidance on how to decide whether an employee’s home is a workplace and, if it is, what expenses can be deducted.
The HMRC website also details the amounts employees might be able to claim tax relief on for additional household costs if they have to work at home for all or part of the week (£6 a week from 6 April 2020). A payment above the weekly limit can still be tax-exempt, but the employee must provide, and the council must retain, evidence of the additional costs (for example, extra gas, electricity and water) and the tax-free payment made must not be in excess of these costs.
Telephone and internet costs can be reimbursed but are only exempt from tax in certain circumstances and the council should read the HMRC guidance carefully or take specific advice on the individual circumstances. If an employee already has a telephone and internet connection, a contribution towards the existing cost is likely to be taxable.
Only where a specific connection is provided solely for business use is the payment likely to be exempt from tax and national insurance. Any such payments should be supported by evidence of the costs involved.
Where an employer provides equipment, services, and supplies to an employee who works from home, there is no need to report this or pay tax or national insurance as long as they are only used for business purposes, or if private use is insignificant. This is different from a homeworking allowance, which is about extra household costs.
Every council employer with at least one member of staff must ensure that those staff who meet certain criteria are put into a pension scheme and the employer (and employee) must make contributions into that scheme, unless the employee opts out. The presumption is that membership of a pension scheme will be immediate at the time employment commences, so it will be automatic or ‘auto-enrolment’. The burden is on the employer to ensure that the pension scheme membership is properly managed and administered.
An employer is obliged to offer a pension scheme, make appropriate payments into that scheme, manage payroll deductions so that the employee can make contributions. It must ensure that anyone who opts out is given relevant information to help them make a decision and must, at least every three years, check that anyone who has opted out wishes to remain outside of the scheme. In addition the employer must, within 6 months of establishing auto-enrolment, provide certification to the Pensions Regulator that auto-enrolment duties have been observed.
What records should the council keep?
The Pensions Regulator advises that records must be kept for 6 years.
What if the council has no-one to auto-enrol?
The council still needs to inform the Pensions Regulator that it has completed the exercise by submitting a Declaration of Compliance certificate
Councils are creatures of statute, which means they can only do what legislation permits. The Localism Act 2011 gave a new power to local councils:
“the power to do anything that individuals generally may do” Localism Act 2011 Sec 1(1)
The GPC was part of the Government’s move towards the decentralisation of powers down to the lowest level of local government. The Explanatory Memorandum to The Parish Councils (General Power of Competence) (Prescribed Conditions) Order 2012 no. 965 stated:
“The Government’s intention in providing eligible parish councils with the general power of competence is to better enable them to take on their enhanced role and allow them to do the things they have previously been unable to do under their existing powers”.
The conditions for eligibility are set out in the Statutory Instrument, Parish Councils (General Power of Competence) (Prescribed Conditions) Order 2012:
Resolution: The council must resolve at a meeting that it meets the criteria for eligibility relating to the electoral mandate and relevant training of the clerk. The resolution can be first passed at any meeting of the council, but to continue to use the GPC, a council must pass a further resolution at every subsequent “relevant annual meeting”. A relevant annual meeting is the annual meeting that takes place in a year of ordinary elections, once every four years.
Electoral mandate: At the time the resolution is passed, at least two thirds of the total number of seats on the council must be filled by members who attained office by being declared elected. This means they should have stood for election (ordinary or by-election) and not been co-opted. For example, if the council has a total of 9 seats, then two thirds means 6 councillors must have stood for election. If the council has 5 seats, two thirds must be rounded up to 4.
Qualified clerk: At the time the resolution is passed, the clerk must hold an eligible qualification. Thay can be the Certificate in Local Council Administration (CiLCA), the Certificate of Higher Education in Local Policy, the Certificate of Higher Education in Local Council Administration or the first level of the foundation degree in Community Engagement and Governance (or successor qualifications) awarded by the University of Gloucestershire. The clerk must have completed training in the exercise of the GPC as part of one of these qualifications, or as separate exercise.
If the council loses its qualified clerk or has insufficient elected councillors, then it must record its ineligibility to use the GPC at the next relevant annual meeting of the council. If it has already started an activity, it can finish it but cannot start anything new. The council cannot employ a qualified clerk on a short-term contract specifically to allow it to use the GPC.
Become a CiLCA qualified clerk
SALC is a registered training provider for the level 3 accredited qualification, the Certificate in Local Council Administration (CiLCA). To find out more, please follow this link to our guidance.
How to use the GPC
The GPC is a ‘power of first resort’, which means that a council eligible to use the GPC no longer needs to search for a statutory power to act, it must instead first ask itself if it can use the GPC. To find the answer, it asks whether an individual is normally permitted to act in the same way, if an individual can, then the parish council is also usually permitted to act.
However, the GPC cannot be relied upon for all matters undertaken by a council. Councils continue to use specific powers for things that individuals can’t do. For example, an individual can’t impose taxes on others, which means the GPC cannot be used to raise a precept and the council instead relies on the Local Government Finance Act 1992. An individual cannot create a by-law or issue a fixed penalty notice, so the council also looks to its other specific powers to permit these actions.
The council’s existing duties remain and must be complied with. A council using the GPC must still have regard to the likely effect of its decisions on crime and disorder, biodiversity, and the duty to provide allotments. Existing financial and procedural duties remain in place for regulating governance, and councils must continue to comply with relevant existing legislation including employment laws, health and safety, equality legislation, and duties related to data protection and freedom of information.
Before acting, a local council must also check that there is no statutory limitation, restriction, or prohibition on what it wants to do. The GPC will not override existing legislation in place before the Localism act 2011 (‘pre-commencement limitations’). Legislative powers enacted after commencement of the GPC will only limit the GPC if this explicitly stated in the legislation.
Because the GPC is a power of first resort, a council that is eligible to use it must use that power and not s.137* to do something of benefit in the community. Additionally, the council can use the GPC to undertake activities anywhere, not just in the parish – but parishioners might object to money being spent where they can’t see the benefit.
(*s.137 (3), which permits the council to contribute to UK charities, public sector funds and public appeals remains in place).
Emergency / Dependents Leave: