Employment Law Update – April 2020

Each year in line with the new financial year the Government makes changes to certain statutory rights for employees and workers. This year, due to the government’s Good Work Plan, in addition with the usual rate increases, there are several key changes coming into effect that employers should take note of, some of which we have set out in brief below.

Written Statement of Terms

It is a current requirement under section 1 of the Employment Rights Act 1996 that an employer must provide an employee a written statement of terms detailing certain information, usually set out in a contract of employment. Under current legislation, the statement of terms must be given to the employees within two months of their employment starting which must include as a minimum the information set out at section 1.

From 6 April 2020, the most notable change is that this right will now apply to workers as well as employees. Additionally, all employees and workers who start after this date will have the right to a written statement of terms from the first day of their employment as opposed to two months. This means that prudent employers should now look to prepare employment contracts during the recruitment stage to ensure compliance with the new law.

The statement of terms will also need to include additional information not previously required, including:

• the hours and days of the week the worker /employee is required to work, whether they may be varied and how
• entitlements to any paid leave
• any other benefits not covered elsewhere in the written statement
• details of any probationary period
• details of training provided by the employer.

While many contracts of employment may already include some of these, it has not been common practice to list details of all benefits and training before now.

Holiday Pay

The method for calculating holiday pay has changed. For workers with variable pay, employers should now reference a 52-weeks period rather than a 12-weeks period. This means that an employer will need to review a worker’s pay for the last 52-weeks to calculate their average weekly earnings for holiday pay calculation.

The Parental Bereavement (Leave and Pay) Act 2018

The Parental Bereavement (Leave and Pay) Act 2018 has come into force which grants all employees two weeks of Parental Bereavement Leave (“PBL”) following the death of a child under the age of 18.

For more details on this new legislation see our blog post: Jack’s Law: New Parental Bereavement Leave Regulations

Key information documents for agency workers

From 6 April 2020, employment businesses are required to provide agency work-seekers with a key information document, before agreeing the terms by which the work will be undertaken. The document must include information such as the type of contract under which the work-seeker will be engaged, the minimum rate of pay, any deductions that will be made to their pay, how they will be paid and by whom, and annual leave entitlement.

Repeal of Swedish Derogation

The Agency Workers Regulations 2010 have been amended to remove the Swedish Derogation. By no later than 30 April 2020, temporary work agencies must provide agency workers whose existing contracts contain a Swedish derogation provision with a written statement advising that, with effect from 6 April 2020, those provisions no longer apply.

Rates of pay

Every year the government updates a number of different rates of pay such as the National Living/Minimum Wage and also payments such as Maternity pay and Statutory Sick Pay (SSP). The below table details the changes in the National Living and Minimum Wage.

These changes are particularly important to bear in mind because employers have an obligation to ensure all employees are receiving at least the minimum wage.

The following table sets out a number of changes to payment rates that employers will also need to be aware of:

Delays due to Covid-19

Given the current outbreak of coronavirus, the Government has taken the decision to delay a number of changes due to take effect on 6 April 2020, to allow businesses the opportunity to manage the rapidly changing world of employment law, including the introduction of Furlough Leave, and focus their attention on supporting their workforce through this difficult time.

One of the most anticipated changes to be delayed, is the extension of IR35 to medium and large companies in the private sector. This will instead come into force in April 2021.  The IR35 tax rules are aimed at making sure that where a contractor who provides their services through an intermediary (often their own limited company) would be considered to be an employee if that intermediary were not used, that contractor is subject to broadly the same tax and National Insurance contributions as employees. The changes will mean that medium and large businesses will be responsible for setting the tax status for any engaged sub-contractors and consultants. The previous position had always been that sub-contractors and consultants were responsible for setting their own tax status.

Gender pay gap reporting has also been delayed for the current period for 12-months. Again, this should allow businesses the opportunity to focus their attention on other priorities within their business.

Unpredicted changes

As noted above, there have also been, and will continue to be, a number of unpredicted changes due to the Covid-19 outbreak. Most notably in the employment field, we have seen the introduction of the Coronavirus Job Retention Scheme (Furlough).

If you have any questions about the new changes coming into effect, or anything mentioned in this article, then please contact Aimée Johns on 0116 402 7252 or email Aimee.Johns@bhwsolicitors.com.