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Training levy row as Govt seeks rewrite
00:00 16 Feb 1995
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The Government has slapped down main contractors over their
practice of passing the current 2% training levy on labour-only
payments to their labour suppliers and individual operatives.
The Construction Industry Training Board has become caught up in a row between employers and the Government after it sought to prepare special guidelines on the operation of the labour-only levy.
Government assessors on the CITB say guidance notes prepared by representatives of the main employer federations need drastic rewriting.
The notes are said to be in conflict with the official Government policy of reducing bureaucratic burdens on small firms and excluding from levy those firms with an annual payroll and labour-only bill of less than œ61,000.
Concern over the guidelines was voiced at a meeting of the CITB last week. The advice was intended to clarify the situation arising from complaints about the 2% labour-only levy being deducted from the pay of operatives. Complaints about unauthorised levy deductions have been strongly pursued by both the TGWU and Ucatt.
TGWU chief and CITB member George Henderson said this week: 'We have had a lot of complaints. And we have taken them successfully to industrial tribunals. Small firms and individuals are meant to be excluded from the levy.'
The draft guidance notes make it clear that there is no statutory basis for employers to recover the labour-only levy from their labour-only suppliers. And any such deduction by the contractor from an individual self-employed person may be considered illegal under the Wages Act 1986.
This is particularly so if there is no written contract between the levy-paying employer and his labour-only subcontractor or if the contract does not contain a clause giving express consent to such a deduction.
Any attempt by the main contractor to pass on the labour-only levy is a matter for contractual agreement with the labour supplier or individual. But contractors are warned to be very careful with the wording of such contract clauses.
The Construction Industry Training Board has become caught up in a row between employers and the Government after it sought to prepare special guidelines on the operation of the labour-only levy.
Government assessors on the CITB say guidance notes prepared by representatives of the main employer federations need drastic rewriting.
The notes are said to be in conflict with the official Government policy of reducing bureaucratic burdens on small firms and excluding from levy those firms with an annual payroll and labour-only bill of less than œ61,000.
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Concern over the guidelines was voiced at a meeting of the CITB last week. The advice was intended to clarify the situation arising from complaints about the 2% labour-only levy being deducted from the pay of operatives. Complaints about unauthorised levy deductions have been strongly pursued by both the TGWU and Ucatt.
TGWU chief and CITB member George Henderson said this week: 'We have had a lot of complaints. And we have taken them successfully to industrial tribunals. Small firms and individuals are meant to be excluded from the levy.'
The draft guidance notes make it clear that there is no statutory basis for employers to recover the labour-only levy from their labour-only suppliers. And any such deduction by the contractor from an individual self-employed person may be considered illegal under the Wages Act 1986.
This is particularly so if there is no written contract between the levy-paying employer and his labour-only subcontractor or if the contract does not contain a clause giving express consent to such a deduction.
Any attempt by the main contractor to pass on the labour-only levy is a matter for contractual agreement with the labour supplier or individual. But contractors are warned to be very careful with the wording of such contract clauses.
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