Round up of Employment Law Changes effective 6th April 2020

1. New employees’ right to a statement of particulars on their first day (Amendment to the Employment Rights Act 1996)

What is the law now?

At present, UK employment law states that an employer must give employees a written statement of employment particulars within the first two months of their employment (providing their employment lasts more than a month). This document, often contained within a contract of employment, outlines the basic terms and conditions of employment.

These can be delivered in instalments, as long as all particulars are delivered within two months of the start of employment.

At minimum, a principal statement of particulars must include:

  • the business’ name,
  • the employee’s name, job title or a description of work and start date,
  • if a previous job counts towards a period of continuous employment, the date the period started,
  • how much and how often an employee will get paid,
  • hours of work (and if employees will have to work Sundays, nights or overtime),
  • holiday entitlement (and if that includes public holidays),
  • where an employee will be working and whether they might have to relocate,
  • if an employee is expected to work in different places, where these will be and what the employer’s address is.

A further written statement must also contain information, where applicable, about:

  • how long a temporary job is expected to last,
  • the end date of a fixed-term contract,
  • notice periods,
  • collective agreements,
  • pensions,
  • who to go to with a grievance,
  • how to complain about how a grievance is handled,
  • how to complain about a disciplinary or dismissal decision.

So, what will change on 6th April 2020?

Amendments to UK employment law that come into force in April state that employees have “the right to a written statement of particulars of employment when an individual begins employment (a day one right)” (Legislation.gov.uk, 2018). Employers will also have to include further information on the statement of particulars when an employee joins a business which include:

  • Terms and conditions relating to hours of work including normal working hours, the days of the week the worker is required to work and whether or not working hours/days may be variable (and if so, how they may vary or how the variation will be determined),
  • any other paid leave,
  • any other benefits (childcare vouchers, health insurance, health cash plans, food, accommodation etc where applicable),
  • details of any probationary period (including its conditions and duration),
  • any training entitlement provided by the employer, any training that the employee is required to complete, and any mandatory training costs not covered by the employer.

Furthermore, existing employees can, on or after 6th April 2020, request an updated statement of particulars from their employer. This must be delivered to the employee no later than one month after the request has been made.

This amendment to the Employment Rights Act states that a statement of particulars can no longer be delivered in instalments but must be provided to all employees from day one of starting work and as one single document.

Meraki HR’s view on this  – at Meraki HR, we have always advised our clients that when making an offer of employment to a prospective employee that the contract of employment is issued at the same time to ensure there is a full understanding of the Terms and Conditions of their Employment (their contract with you) this avoids any issues further down the line.

What does it mean for your business?

In short, you need to be better prepared when welcoming new employees to your business. Review your existing contracts and make any necessary changes.

Make sure your contract of employment covers off all the required information for a statement of particulars and update it as necessary for any new employees.

This should ensure clearer lines of communication between HR in preparing a contract and/or statement of particulars and the manager conducting interviews and negotiations with candidates. The job being offered should be documented in its entirety and all the necessary information required for a statement of particulars should be clear and agreed between HR, the hiring manager/head of department and the new starter ahead of their first day.

While the changes to the Employment Rights Act 1996 don’t state that you have to provide all existing employees with an updated statement of particulars – be prepared for an existing employee to request one on or after 6th April 2020 (and at any time up to three months after the end of their employment).

2. Calculation of holiday pay for variable workers (Amendments to regulation 16 of the Working Time Regulations 1998)

What is the law now?

As it stands, all employees are entitled to paid annual leave and they must be paid the same amount when on holiday as they would receive when they’re at work – regardless of their working pattern. Holiday pay can be calculated based on the days or hours worked per week, annual hours, compressed hours or shifts.

If an employee’s working hours don’t vary (i.e. they work 9am – 5:30pm, 5 days per week), their holiday pay should be calculated using their usual pay rate. For example, Jack works from 9am to 5:30pm every day, Monday to Friday. If he takes seven days of annual leave in January, he will be paid the same amount as if he has worked a typical week.

However (and this is where it gets a little complicated), if an employee doesn’t have fixed or regular hours or their pay isn’t always the same, their holiday pay is calculated based on the average number of hours worked, at their average pay in the previous 12 weeks. 12 weeks being the current holiday reference period under the current iteration of the Working Time Regulations.

For example, Jill has worked an average of 23 hours per week over the last 12 weeks and has been paid an average of £10.50 per hour for her work. As such, she would be entitled to £241.50 per week as holiday pay (£10.50 per hour x 23 hours).

So, what will change on 6th April 2020?

The amendments being made to the Working Time Regulations 1998 that come into force in April will make changes to the holiday reference period which is currently 12 weeks. The holiday reference period used to calculate holiday pay for variable workers is being increased to 52 weeks (for employees that have been in your employment for more than 52 weeks).

Thus, to calculate the holiday pay for an employee on variable hours or pay, you will need to work out the average hours worked and average pay from the previous 52 weeks. If you have employees on variable hours or pay that have been in your employment for less than 52 weeks, the holiday reference period will be the number of weeks for which they have been employed.

Again, you would need to calculate the average number of hours worked and that average pay for the period of time they have been employed. As with current employment law, any weeks an employee hasn’t worked or received pay for should be excluded from your calculations.

What does it mean for your business?

These changes to the methods in which holiday pay is calculated should greatly benefit employees on variable hours or variable pay rates. The change in reference period should help even out any peaks and troughs in pay for employees, particularly those in seasonal roles or where lots of overtime is worked at specific times of year.

As a business, you must ensure that your records of the hours worked and pay received by these employees are correct as any incorrect records will directly impact an employee’s pay. Online clocking in systems or time sheets can be helpful to track the exact hours worked by each employee, where details of hours worked, and any variable pay entitlement can be logged. This information is then securely stored online and is easily accessible whenever employees make annual leave requests.

Meraki HR’s view – the calculation of holiday pay over 12 weeks is something we often find business owners are not doing correctly when we conduct our HR Health Check. If not done correctly, and an employee raises it as an issue it could mean you may owe them money and that you must re-pay them any holiday pay owing for the last two years that has been calculated incorrectly.  Therefore, as these changes mean that the average pay reference period is now increased to 52 weeks, we are sure that there will be many businesses who continue to calculate this incorrectly. BEWARE!

3. Parental bereavement leave (Addition to the Employment Rights Act 1996)

What is the law now?

While there is no current law relating to parental bereavement, under current UK employment law, most employees have a statutory right to a ‘reasonable’ period of unpaid time off to deal with unforeseen matters or emergency situations that involve a dependent. This includes time off to arrange or attend a funeral. A dependent can be a spouse or civil partner, child, parent or someone who depends on you for care or help during an emergency.

Also known as compassionate or bereavement leave, some employers may have policies in place that offer a defined number of days that will be paid during such difficult times, but this is entirely at the employer’s discretion.

So, what will change on 6th April 2020?

Monday 6th April 2020 will see an addition to the Employment Rights Act 1996 called Parental Bereavement Leave come into force. This additional legislation entitles parents up to two weeks’ paid leave if they lose a child under the age of 18 or suffer a stillbirth from 24 weeks of pregnancy as a day one right of their employment with you.

Bereaved parents must take their bereavement leave before the end of a period of at least 56 days beginning with the date of the child’s death. Parents can choose to take this as one block of two weeks’ paid leave or two blocks of one week, if the leave is taken with 56 days of the loss of their child.

In the case of losing multiple children, parents will be entitled to paid bereavement leave for each child.

So, what does it mean for your business?

While changes to the law surrounding parental bereavement are imminent, making sure you have the right support in place in your business should not be an afterthought. Both managers and colleagues should be able to support an employee going through a bereavement of any kind.

While it is not mandatory to have a compassionate or bereavement leave policy nor do you have to pay employees during a period of time off for any situation or emergency involving a dependent; most employers do pay for a certain number of days off for dependents each year.

However, the Parental Bereavement Leave Act will make paid leave for parents that experience the loss of a child or a stillbirth a legal right.

While the new legislation will provide a solid foundation for businesses in devising a policy that supports bereaved parents, it is still the bare, legal minimum that must be provided. Be sure that your bereavement policies support employee wellbeing. Remember, it’s not a ‘one size fits all process’, as we all deal with grief differently and you need to make sure your employees are reassured and supported in both the immediate aftermath and after they have returned to work to help bring them back to work and be able to cope with their loss and return to their full potential.

Meraki HR’s view – Hear, Hear! If any of our clients sought advice from us on this matter, even before the legislation was in place, we would always encourage you as business owner do whatever you can to support your employee through this difficult period, and that’s not just paid time off. Do you have a wellbeing policy? Can you offer a counselling support service that could help, or do you have an Employee Assistance Program in place that could support them at this time?  Or could you find them a specialist coach that could work with the person to help them to deal with their loss? How can you create a back to work plan for them that eases them back into work? These are all things to consider when dealing with such a sensitive situation and we can help you to design the right parental bereavement leave policy of you don’t already have suitable alternative policies in place.

4. Changes to off payroll working (IR35) rules effective from 6th April 2020.

This will affect any contractors working through a Personal Service Company.

Essentially IR35 (also known as ‘off-payroll working’ or ‘IR35’). is a piece of legislation that was designed to ensure that employers are not “hiding” people working for them as contractors who are in essence an employee and thus the employer avoiding paying Employers NI and Employers Pension costs.

On 7th January 2020 the government announced a review into the implementation of the IR35 changes. They said the review would be completed by February 2020.  This doesn’t mean the IR35 changes will be watered down or delayed – but rather that the government wants to ensure that these changes are implemented “as smoothly as possible”.

On 7th February 2020 HMRC published a minor change to the implementation of the IR35 rules which means they will only apply to payments made for services provided by Personal Service Company on or after 6th April 2020. The outcome of the implementation review should be known by the end of February 2020.

So, what will change on 6th April 2020?

Previously, it was the contractor’s responsibility to ensure that their contract with any business they worked with met the rules of IR35, and they wouldn’t be seen as an employee. Now it will become the businesses responsibility to ensure that anyone/business they contract with to provide them with a service/services will need to meet the rules of IR 35. You can use the HMRC calculator to determine whether someone falls within the rules of IR35 or not; https://www.gov.uk/guidance/check-employment-status-for-tax

So, what does it mean for your business?

With less than 2 months to the implementation date, it’s vital that businesses understand how these changes will affect them and whether their contracts with service providers would fall inside or outside of IR35.

Meraki HR’s view – This is a huge change, but we’ve known this was coming for a long time!  Any clients where we are aware of them using and working with contractors, we have been discussing this with them and whether these workers are in essence “employees.”  We have been working with our clients to ensure they are not falling foul of these changes. In some cases that has meant them moving contractors to employee status or ending their arrangements with certain contractors. Meraki HR are worried that there will be many clients with the odd 1 or 2 workers who will not meet the rules of IR25, and who could therefore be at risk of failing in their duty to establish whether the service provider falls in or out of IR35 rules. This could mean huge financial penalties on both the business and the contractor. As with any changes of this kind in legislation, it will take some time for there to be precedents set and you don’t want to be the case that helps the government determine how to deal with a business who is not taking IR35 seriously!

Please note: Meraki HR are qualified HR professionals, but we are not employment lawyers. This article is a high-level summary of employment law changes coming into force in April this year based on the advice we have received from the employment lawyers we work with.

We will advise you of any employment law changes specific to your business if you get in touch with us directly. For more complicated employee matters, we will always seek advice from our employment lawyers with your agreement.