Part 7: Staff support and welfare expenditure

Controlling sensitive expenditure: Guidelines for public entities.

7.1
Entities may provide for staff support and welfare in a range of ways. The resulting benefits should be to both the entity and the staff.

7.2
For example, an entity may decide to make payments to meet its “good employer” obligations. Or an entity may decide to meet costs for less specific purposes that generally contribute to a good relationship between it and its workforce or among its workforce. Examples are a contribution to a social club or to a sports team representing the entity.

7.3
However, an entity also needs to bear in mind that payments for staff support or welfare that could be seen to meet what are ordinarily a staff member’s personal and private expenses can amount to additional remuneration for the staff member. In those circumstances, the entity needs to consider the implications for such matters as tax liability and relevant employment agreements.

Clothing and grooming

7.4
“Clothing” includes outerwear, footwear, and other items worn while at work. It also includes uniforms that are worn in the workplace. Uniforms typically identify an entity by displaying the entity’s logo, name, or style. “Grooming” includes dry cleaning of clothing, hairdressing, and other personal appearance treatments.

Issues and principles

7.5
The main issue with paying for clothing or grooming is the risk of the resulting benefit to the staff member being disproportionately larger than that received by the entity.

7.6
The principles of a justified business purpose, and moderate and conservative expenditure, are particularly relevant.

Guidance

7.7
We expect payments for clothing and grooming to:

  • support a business purpose of the entity;
  • be moderate and conservative; and
  • as a rule, be of no more than incidental benefit to the staff member.

7.8
Other than uniforms and health and safety-related clothing, staff should not normally be clothed or groomed at public expense when they are engaged in normal business activity (whether at home or abroad), except as part of remuneration arrangements.

Care of dependants

7.9
A staff member may be responsible for the care of a dependant. Unless the cost is wholly or partly the subject of a component of their remuneration under an employment agreement, it is a personal and private expense of the staff member.

Issues and principles

7.10
The principle of moderate and conservative expenditure is particularly relevant.

Guidance

7.11
We expect payments for the care of dependants, other than under employment agreements, to be made only in exceptional circumstances – such as when the staff member is unexpectedly required to perform additional duties at very short notice, or a dependant unexpectedly requires additional care that the staff member cannot provide because of the essential nature of their duties at the time.

Financing the activities of a social club

7.12
Many entities have staff social clubs. These typically provide the opportunity for staff to have social interaction with both immediate work colleagues and other people within the entity with whom they would not normally have contact. Social clubs may also assist staff to gain a better understanding of the wider roles and functions of the entity.

7.13
Employers commonly make a monetary contribution to a social club. The contribution may be in the form of an all-purpose grant towards the club’s annual budget, or it may be a grant or subsidy for a specific event.

Issues and principles

7.14
It is important that there is a justified business purpose for any contributions an entity may provide to a social club. This purpose would typically be connected with organisational development and staff welfare.

Guidance

7.15
We expect contributions to social clubs to be prudent and reasonable in terms of the benefit obtained by the entity.

Farewells and retirements

7.16
Expenditure on farewells and retirements includes spending on functions, gifts, and other items when staff are leaving or retiring from an entity.

Issues and principles

7.17
Expenditure on farewells and retirements should not be extravagant or inappropriate to the occasion.

7.18
The principle of moderate and conservative expenditure is particularly relevant.

Guidance

7.19
We expect any expenditure on farewells or retirements to be pre-approved at an appropriate level of management, and to be moderate and conservative.

Sponsorship of staff or others

7.20
Staff taking part in an activity that is not part of their job, such as a sporting event, may be sponsored by their entity through the provision of, or payment for, goods or services (for example, a t-shirt or an entry fee).

Issues and principles

7.21
Sponsorship should have a justified business purpose, which could include both publicity for the entity and its objectives, and organisational development. The cost to the entity should be moderate and conservative.

7.22
If the entity’s sponsorship does not have a justified business purpose, the cost is a donation (see paragraphs 8.5-8.8).

Guidance

7.23
Sponsorship may be provided directly to the staff member, but it is probably better provided through a social club. We expect sponsorship of people who are not staff to be undertaken in a manner that is transparent. It is also preferable that, if non-staff are sponsored, the sponsorship is of an organisation they belong to, rather than directly of the individual.

7.24
People who are not staff may also be sponsored in instances where providing sponsorship is the core business of the entity and the sponsorship is subject to appropriate controls.

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