Hello, the following newsletter relates to new employment legislation that will be introduced in April 2020. This is the first in a series of newsletters we will be sending during March as 2020 sees an unusually large number of changes that will likely impact your business.
This newsletter relates to the introduction of The Good Work Plan and will likely require your Contracts of Employment be updated with specific wording and/or clauses. For information regarding updating your current contracts, please refer to the ‘Next Steps’ at the end of the newsletter.
The other newsletters in this series relate to Parental Bereavement Leave, IR35 and Statutory Pay Changes 2020/21.
Have you heard of the Good Work Plan yet? While it may not be familiar to you just yet is has been dubbed ‘one of the biggest shake ups of employment law in a generation’ and is set to affect almost every business in the country when its policies come into force on 6 April 2020.
The Good Work Plan is not new, it came about as a result of an independent review, known as the Taylor Review of Modern Working Practices in July 2017, and the first changes were introduced by the Government in April 2019. Namely:
- The right to a payslip was extended to cover all workers
- Payslips must now outline hours worked for hourly-paid
- An increase in the maximum penalty for ‘aggravated breaches of employment law’
So, what are the changes being introduced in April?
1. The right to a written statement of particulars of employment
At present, employers must provide a written statement (typically, but not always, considered to be a Contract of Employment) setting out the basic terms of employment to all employees within 8 weeks of the start of their employment. Under new legislation, this statement must be given by day 1 of their employment.
In another significant change, the right to a written statement of particulars has been extended to include workers as well as employees.
In addition to who the statements need to be given to and when, the legislation also requires additional information to be given, including:
- Which specific days of the week the worker is required to work, and whether such hours or days may be variable, and if they may be how they vary or how that variation is to be determined
- All benefits provided by the employer (Such as Pensions, Company Car, Company Healthcare schemes, Death in Service/Life Assurance, Long Service Holidays, Salary Sacrifice, Gym Membership, Cycle-to-Work Schemes, Subsidised Canteens, Childcare Vouchers, Wellness Programmes etc)
- The duration and conditions of any probationary period
- Details of training entitlement, mandatory training etc. (including mandatory training which is not funded by the employer)
These changes do not need to be retrospectively applied and therefore are only a legal requirement for workers starting after the 6th April.
Consequence of non-Compliance:
Any employee or worker starting their employment on or after 6th April 2020 can lodge a complaint to an Employment Tribunal for:
- Failure to provide a written statement of particulars
- Issuing an inaccurate statement
- Issuing an incomplete statement
A remedy of Compensation would only be applicable if the claim accompanies another substantive claim against the Company.
2. Increase in the period over which holiday pay is calculated
At present, workers who don’t have a regular working pattern during the year have their holiday pay calculated by averaging the number of hours worked over the previous 12 weeks (this is known as the ‘pay reference period’). From 6th April the pay reference period will increase to 52 weeks.
This change is designed to avoid workers losing out where their working hours are subject to fluctuations such as seasonal variations.
Where a worker has been employed for less than 52 weeks, the average is calculated using the number of weeks of employment.
3. Increased protection for agency workers
Currently, Agency workers can exchange their right to be paid equally to permanent counterparts (‘opt out’ from this part of the Agency Worker Regulations) in return for a contract guaranteeing pay between assignments (this is known as the ‘Swedish derogation’ model). This was originally designed to give reassurance that they would continue to earn even during periods where there were gaps in work. However, there is evidence that workers are not benefiting from this opt-out and, as such, from April 2020, this distinction will be abolished and the right to comparable pay will apply to all agency workers after 12 weeks. The government has also introduced an obligation to provide agency workers with a ‘Key Facts’ page providing basic information about their contract, pay rates and pay arrangements.
For our Clients:
- So that we can produce your contracts for day 1, make sure you review your current practice for issuing written terms, to ensure they are issued on or before day 1 of employment, and complete the staff datasheet prior to April so we can have your offer letters and contracts ready for you to send.
- Reply to our email questionnaire by Friday 13th March so that we can update your contractual documentation to ensure they meet the new legislative requirements from 1st April 2020.
o For Retained Clients, who have purchased our Contracts and Handbook, we will make the relevant changes as part of our service under your retainer agreement.
o For PAYG Clients who have purchased our Contracts and Handbook please let us know if you want us to make the updates under your PAYG agreement.
For any new starter from 1st April 2020:
- Clarify and understand who is a worker or employee and ensure all have been issued with the appropriate Written Statement of Particulars.
- Ensure your Payroll department familiarise themselves with the new holiday pay requirements and ensure their processes/calculations and systems are updated accordingly.
For those who wish to discuss the changes in more detail, please call 01772 600228 or email email@example.com