Employment Law Changes In 2020 – Is Your Business Prepared?

From 6th April 2020, as part of the Good Work Plan, significant employment law changes are planned to the requirement to provide employees with a written statement of the terms of their employment.

Employment law changes in 2020

Background

Currently, under section one of the Employment Rights Act 1996 (ERA), employers must provide employees with a statement of their main terms and conditions within two months of commencing employment.

Most employers do this via either the employment contract or a combination of an offer letter and employment contract or a statement of terms document for more junior employees.

Changes

The employment law changes due to implemented in April 2020 are significant and include:

  1. Timing – the statement needs to be given on the first day of employment if not before, no more two month grace period.
  2. The right is being extended – as well as employees, workers will also be entitled to receive a statement (see below).
  3. The exclusion for those employed for less than a month no longer applies – all workers will have the right to receive a statement, regardless of how long their employment lasts.
  4. The details to be included in the statement are being added to and in addition to the existing list of requirements, employers must now also cover:
    • Days of work (and if these vary, how they are determined);
    • Terms and conditions relating to paid leave (other than holiday or sick leave);
    • Any benefits not covered elsewhere in the statement;
    • Details of any probationary period (including trial shifts);
    • Training – details of any entitlement provided by the employer, whether any training is compulsory and whether there is any compulsory training which the employer does not pay for.

New statements need to be provided to all new starters (employees and workers) after 6th April 2020.

Employee vs worker

In employment law, a core of legal protection is given to those that are employed by an employer. Beyond this, the ERA also recognises the category of “worker”. This includes all employees and also those who have entered in to or work under:

“any other contract…whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual.”

There are two elements to this definition:

  1. The obligation to do the work personally; and
  2. That the person is not on business on their own account.

Those with worker status do not have the full protection of employment law and were not previously entitled to receive a statement of terms under section one ERA.

Workers may not have a written contract with the recipient of their work or they may be engaged under a consultancy agreement or contract for services. Any documentation is unlikely to meet the requirements of section one ERA. For workers engaged after 6th April 2020, new documentation will be required.

Existing employees

After 6th April 2020, existing employees will have the right to request an updated statement (covering the new requirements and any update to the employee’s previous statement). Employers have a month to comply with such requests.

In addition, after 6th April 2020, where there is a change to any of employee’s particulars of employment (including the new requirements) (referred to as a ‘trigger’), the employer must provide the employee with a statement of the changes “at the earliest possible opportunity” and not later than one month after the change.

There are also additional provisions which apply to employees whose employment commenced before 1993.

Existing workers

There is no right for existing workers to request an updated statement, and the trigger provisions for an employer to provide one do not seem to have been drafted to apply to workers (although this could yet be clarified). For existing workers then, it seems that they will only need to be provided with a section one statement if their engagement is terminated and then renewed.

How can I get my business ready for the changes?

  1. We recommend that all employers audit their workforce to identify employees (and check that they all have section one statements) and to identify workers or areas where workers may be engaged after 6th April 2020.
  2. Changing procedures – employers will need to change their procedures to ensure that staff receive documentation on or before day one of employment.
  3. Updating documentation and a new template statement for workers – employers will need new section one statement documentation for employees who commence employment after 6th April 2020 or will need to update template contracts and/or offer letters to reflect the new requirements. New section one statement documentation for workers will need to be drafted or existing template consultancy or similar agreements will need to be updated. Employers may need to review working practices and policies to determine the extra details needed.
  4. Deciding on approach – employers are not obliged to give existing employees a new statement on 6th April 2020 but some may prefer to rather than dealing with requests and triggers piecemeal over the course of 2020. Otherwise, employers will need to be able to recognise requests and triggers and be able to deal with these.
  5. Employers who are considering changes to terms, for example, paid leave entitlements such as family leave, or to any benefits, will be well-advised to implement these changes in good time before 6th April 2020, as any changes after that date to paid leave or benefits will trigger the obligation to provide a statement of changes to all affected existing employees.

Consequences

Tribunals will continue to be able to award compensation for failure to provide a proper written statement of employment particulars, where the employee or worker brings another successful claim in Tribunal (so this will still be a tag along claim) with compensation assessed between two and four weeks capped pay.

Support from Nelsons

We appreciate that these changes can be daunting but we can help you plan and prepare.

We are offering a review of your existing documentation for a capped fee of up to £500+VAT including an action plan for amendments and process changes required.

To take up this offer or to discuss your organisation’s requirements in more detail, please contact our expert Employment Law team in Derby, Leicester and Nottingham on 0800 024 1976 or via our online form.

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