Are your employment contracts up to date?
Given the current situation employers can be forgiven for focusing their efforts on furloughing employees, business planning and putting in place Health and Safety measures to ensure their business can continue. However, as the Government has told us throughout the Coronavirus pandemic existing employment laws have not changed and this post outlines one of the important changes that came into effect from 6 April 2020.
Changes to the Employment Rights Act - Section 1 Statements
The Good Work Plan was published in December 2018 and was in response to the Taylor Review of Modern Working Practices in July 2017.
The Plan has already seen the introduction of the requirement to issue itemised payslips to every worker, not just to employees. This includes agency staff, casual and zero hours staff, contractors and freelancers who are on the payroll. A payslip should now include, a single, combined amount; or an itemised list of hours worked for different rates of pay as well as Gross Pay before deductions, deductions including tax and National Insurances and then Net Pay.
Prior to 5 April 2020 employees were entitled to receive a written statement of their key terms of employment within 2 months of the date on which they commenced employment. This is often known as ‘Statement of Terms and Conditions of Employment’.
From 6 April 2020, the way employer’s issue and update contracts for employees will also change.
These changes are summarised below:
- The right to receive a written statement of key terms of employment has been extended to workers (e.g. casual staff, zero hours) as well as employees.
- This is a day one right. This means employers will need to issue this documentation from day one of employment or before they start, no matter on the length of the contract or type of employment relationship.
- Employers will have to provide the following ADDITIONAL information in the single “principal” document:
terms relating to sickness and injury and sick pay (employers will still be able to refer employees to another reasonably accessible document as under the current rules, but will need to provide this information from day one);
terms relating to any other paid leave (e.g. maternity, paternity and adoption and any other paid leave not referred to elsewhere in the document).
terms relating to hours of work including any provisions relating to normal hours, with a new requirement to include days of the week the individual is required to work; and
if and how working hours or days may be varied and how the variation will be determined;
details of all benefits which will be provided, that have a financial value e.g. health insurance, season ticket loans. Where no benefits are provided a statement to this effect is needed.
details of any training that the individual must complete, including training for which the employer will not bear the cost.
any probationary period, including conditions and its duration.
These changes only apply to new contracts issued on or after 6 April 2020. Existing employees and workers are not automatically entitled to receive a new written contract which includes the additional information. However, they can request an updated written contract, which employers must provide within one month of the request.
If there are any changes made to any of the new information required, or where an individual is re-employed, then an updated contract of employment will need to be provided.
Consequences of non-compliance
If the employer fails to provide a written statement, or the statement is incorrect, the employee can apply to the Employment Tribunal for it to determine the terms and order the employer to provide them. Compensation of two (or in some cases four) weeks’ pay, subject to the statutory weekly cap, could be awarded. However, this is not a standalone claim and it would be brought in conjunction with another claim i.e. unfair dismissal.
How can I make sure that my contracts comply to the changes?
It is important that your contracts of employment contain this information and your recruitment practices are set up to issue these documents from day one (or before employment starts).
Current contracts are unlikely to contain the required information, therefore I would recommend that you seek professional advice on reviewing your contracts and ensuring these are compliant.
I can help with this review and for a free initial discussion about your needs, please contact me.