Blog: One of the biggest employment law changes in 2020 – are you ready?

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Perhaps the biggest employment law change of 2020 (in terms of you needing to change how you do things) arrives on 6 April.  It has the potential to cause headaches for HR practitioners, as it involves changes to the right to receive a written statement of particulars of employment.  Changes include not just when an employee has to receive these but most importantly, what this set of terms should include.

Now you may already feel your eyes glazing over and a yawn coming… but stay with me here!

The requirement for a ‘written statement of terms and conditions’ (under section 1 of the Employment Rights Act) is essentially the statutory bare minimum for what must be in an employment contract.  You’re probably very used to what needs to go into one of these statements, but things are changing.

What’s changing?

My references below to ‘statement’ will obviously include any employment contract you use.

In summary, the changes are:

  1. The statement must be given on the first day of employment instead of within two months of start date as it is currently (with some exceptions like details of pensions, collective agreements and training rights, which can be given later).
  2. The exemption from this duty for employees in short-term employment for a period of less than one month no longer applies.  All workers have the right to receive their statement no later than the first day of their employment.
  3. The right to receive the statement, previously enjoyed only by employees (including apprentices), is now extended to ‘workers’ who are engaged at any time after 6 April 2020.  Existing ‘workers’ (who are not also employees) do not have a right to receive a written statement, unless they are ‘re-engaged’ by you after that date.
  4. There are a number of new pieces of information and terms that must now be given in the statement, namely:
    • Which days of the week must be worked
    • Whether or not such hours or days may be variable and, if so, how they vary or how that variation is to be determined
    • Any terms and conditions relating to any paid leave other than holiday and sick leave.
    • Any other benefits not covered elsewhere in the statement (which includes both contractual and non-contractual benefits)
    • Details of any probationary period (this would in all likelihood include so-called ‘trial shifts’), including conditions applicable to it and its duration
    • Details of any training entitlement, and any part of that training entitlement which is compulsory
    • Details of any other compulsory training which the employer will not pay for

So what?

There are, technically, only a couple of areas where you can refer an employee to another document containing the relevant terms (e.g. policy) rather than putting the information into the statement itself (and we set these out below). Strictly speaking, the detail must be set out in the statement itself.

I imagine many of you will take the view that you can live with a ‘technical breach’ where you refer employees to a separate document (e.g. a comprehensive Staff Handbook) as long as the statement covers all the main points.  Below are some of our main pointers to make the process easier for employers.

What about the Workers?

It is only ‘workers’ (non-employees, such as casual workers) who join your organisation after 1 April 2020 who will be entitled to receive a statement for the first time – not those you’ve already hired. Nevertheless, this may involve an overhaul of the documentation you give to workers.

While we are at it, do they need to be this middle tier of ‘worker’? The law in increasingly moving back to have two main types of employment: employees and self-employed. Whilst there are some good reasons for having ‘workers’, it often leads to confusion and mistakes and maybe now is the time to consider your legal relationships with those who work for you.

Perhaps you already comply?

The vast majority of employers obviously give their employees an employment contract (which contains all the necessary ingredients of the basic minimum ‘statement’).  Your employment contracts may very well already comply with the new legislation – in which case, happy days!

If not, you may wish to issue an updating document to employees that ticks all the new boxes. Remember, employees can request an updated statement/contract (you probably know who those ones will be!) so you might want to be prepared and have one ready to go.

On a practical level, if you are considering implementing a new type of paid leave (‘grandparents leave’, anyone?), it will make sense to introduce this either on or before 1 April 2020 – if not, you will have to issue another updated statement/contract later in the year.

And don’t forget that if you have any directors on directors’ service agreements, these should be checked too for whether their contents comply with the new rules.  Since these agreements tend to be detailed and lengthy, the chances are they probably do, but it’s worth checking anyway.

Working hours, days and variations

The new requirements in relation to hours of work are also likely to require an audit of current practices, so that the employer is able to provide the relevant details.   Actual working practices may have changed since the employee was first taken on.  Any existing documentation may not properly reflect the contractual position in relation on issues such as how variations to working hours are determined or the employee’s current working hours or pattern.

Benefits

You will also need to audit the benefits that are provided to your workforce, so that details of these can now be included in updated statements/contracts. Both contractual and non-contractual benefits are covered by this requirement. You should therefore be careful to specify in the statement/contract which benefits are contractual and which are non-contractual or discretionary.

An added practical complication is that you are not permitted to simply refer your staff to another document for details of their other benefits.  These must be included in the statement/contract itself. Employers who provide a wide variety of benefits and/or whose benefits vary significantly according to the employee’s status or role may find this new requirement particularly onerous.

I suggest you take a pragmatic approach, where you accept the risk of ‘technical’ non-compliance with this requirement.  This route would mean including only a summary of details in the statement/contract itself and, even though this is not permitted by the legislation, referring the employee to further details contained in another document, such as a benefits policy.

Training entitlement

You will need to review your workforce’s training requirements and practices to ensure they have the full picture across all parts of the business.

Whilst employees can be referred to another reasonably accessible document for details of any training entitlement provided by the employer, details of:

  1. any part of the training entitlement that is compulsory, and
  2. any other compulsory training (i.e. training which is not provided by the employer) which the employer will not pay for.

These must be set out in the statement or contract.

Referring employees to another document

It has always been permissible, for certain employment terms, for the employer to refer the employee to another ‘readily accessible document’.  This has not changed.  In fact, the list has been expanded. By way of reminder, these are:

  1. any terms and conditions relating to incapacity for work due to sickness or injury, including sick pay
  2. any terms and conditions relating to any other paid leave
  3. any terms and conditions relating to pensions and pension schemes
  4. any training entitlement provided by the employer (but not details of any compulsory element of that training, or details of compulsory training that the employer will not pay for as explained above)
  5. the terms of the disciplinary rules and procedures (but details of the person to whom the worker can apply if dissatisfied with any disciplinary decision relating to them, or any decision to dismiss them, and the person to with whom the worker can raise a grievance must be set out in the written statement itself)
  6. the terms of the disciplinary appeals process and grievance procedure

A good opportunity for a thorough update?

Rather like a good spring-clean, the new legislation does give you a chance to give your contracts a proper dust-off.   Consider if they are still really fit for purpose.  Perhaps more importantly, do they properly reflect your organisation as it exists now? Are they written in the ‘style’ of your organisation?

I recently reviewed employment contracts for a dynamic, growing tech business employing lots of 20 somethings.  I discovered that their terms of employment were not only non-compliant but did not reflect the true culture of the organisation either.  They were overly wordy, full of ‘legalese’ and not very employee-friendly.  They were certainly not in-line with their employer brand.  A thorough re-write meant that new hires now get a contract which mirrors the business they’ve signed up to (rather than one unrecognisable from the one who they interviewed with!).

These documents do ‘set the scene’ for your relationship with your employees from day 1 – so ignore them at your peril!  Make sure they properly serve both you and your employees.

We are adept at creating, updating and re-writing employee contracts of all types – from those for casual employees up to directors’ service agreements.  Please get in touch if we can help you ( / 0117 325 0526).

Anne-Marie Boyle
Partner

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