Employment Law Developments

Employment Law Developments

We have set out below the changes to employment legislation which are coming into force in April 2020. Many of these changes are as a result of the Government’s response to the Taylor Review which looked at how to create ‘good work’ in the modern working environment.

We have also set out some of key changes which we expect to happen in the future but which do not currently have a proposed implementation date.

These lists are not exhaustive and BREXIT discussions are leading to more consultations and inquiries which may impact on employment law in the coming years.

Upcoming changes:

 

 

 

Holiday pay - reference period

When will this change?

6 April 2020

What will change?

Regulation 16 of the Working Time Regulations will be amended to increase the reference
period for determining an average week’s pay for the purposes of calculating holiday pay.

This will be changed from 12 weeks to 52 weeks or, for an employee who has been employed for less than 52 weeks, then this will be the number of weeks they have been employed.

Actions

Consider what workers this new reference period may effect and how you will go about implementing the new reference period. This change will not directly impact on the question of when a reference period is appropriate to use and for which workers.

Written statements of employment particulars

When will this change?

6 April 2020

What will change?

A written statement of terms will have to be given on or before the first day of employment, rather than within two months of employment starting.

Additional information will also need to be included in this statement including the length of time a job is expected to last, the notice period, eligibility for sick leave and pay, other rights to leave, any probationary period, all remuneration, details of training entitlement and specific days and times of work. There are small exceptions for information relating to pension, collective agreement, grievance and disciplinaries and training entitlement which must still be provided within two months of the beginning of employment .

Furthermore, all workers (not just employees) will have the right to a written statement of employment. This will apply for all new joiners on or after 6 April 2020.

Actions

Consider whether your employment contracts and contracts for workers used for new recruits contain the required information. If they do not, how will these need to be adapted and is this information readily available? Do you know who your workers are?

Agency workers – Swedish derogation repeal

When will this change?

6 April 2020

What will change?

The Swedish derogation which allows employment businesses to avoid pay parity (after 12
weeks) between agency workers and direct employees if certain conditions are met will be
removed.

Temporary work agencies must provide agency work seekers with a Key Information
Document, including information on the type of contract, the minimum expected rate of pay,
how they will be paid and by whom.

Actions

If you do not have agency workers, then there are no action points to take
forward. If you do have agency workers, you should review the information you are providing agency workers with to ensure it will meet with the new requirements.

Information and consultation regulations changes

When will this change?

6 April 2020

What will change?

Under the ICE Regulations employers who employee 50 or more employees may receive a
request for a formal agreement which would provide for information and consultation on
workplace issues with elected representatives.

The thresholds required for a request to set up information and consultation arrangements will be lowered on 6 April 2020.

Currently support of 10 percent of employees is needed for a successful request but this will
be reduced to 2 percent. The 15 employee minimum threshold shall remain.

Actions

You should be aware of these thresholds if you receive a request to set up
information and consultation arrangements.

Using contractors – IR35 changes – private sector

When will this change?

6 April 2020

On 11 July 2019 HMRC confirmed that the proposed changes would be implemented and published draft legislation.

What will change?

Medium and large sized private sector businesses will become responsible for assessing the employment status of certain off-payroll workers they engage  (this is already the case in the public sector). This will consequently mean that they will be accountable to HMRC for a wrong assessment.

These rules will need to be considered where you have an individual providing their services through their own intermediary (often a personal service company.)

As a general rule at the moment, for the private sector, the person providing services through their own intermediary is responsible for deciding if the relevant rules apply and for accounting for income tax and NI where it applies.  This is going to change to make the end client liable.

Actions

Employers should familiarise themselves with the rules and consider whether any individuals currently provide services in this way. Decisions made about worker status should be carefully considered and assessed. This may require a detailed examination of the contractual and practical relationships you have with your contractors.

Termination payments

When will this change?

6 April 2020

Expected - we are awaiting regulations to bring the new legislation into force.

What will change?

All termination payments above £30,000 threshold will be subject to class 1A NICs.

Action Points: Employers should be aware of these extra costs if proposing to make settlement payments in the future. Existing Settlement Agreements are likely to need updating to reflect this change in tax approach.

Agency workers – Swedish derogation

When will this change?

30 April 2020

What will change?

By no later than 30 April 2020, temporary work agencies must provide agency workers whose existing contracts contain a Swedish derogation provision with a written statement advising that, with effect from 6 April 2020, those provisions no longer apply.

Bereavement leave

When will this change?

April 2020 (expected but no confirmed specific date)

What will change?

The Parental Bereavement (Leave and Pay) Act is expected to come into effect in April 2020.

This will give all employed parents a statutory right to two weeks’ leave if they lose a child under the age of 18, or suffer a stillbirth from 24 weeks of pregnancy. They will also be able to claim statutory parental bereavement pay if they meet certain eligibility criteria.

Actions

Employers will need to revisit policies and procedures and ensure that revised policies are ready for when an implementation date is given. Further guidance is likely to be given on these changes.

Continuity of Employment

When will this change?

No current date

What will change?

The government have stated their intention to extend the length of the gap in employment necessary to break continuity of employment. The proposed change is from 1 week to 4 weeks.

Actions 

Career break policies should be revisited as well as policies on re-hiring employees to see how this change will impact on the intentions behind these policies.

Zero hours contracts

When will this change?

No current date

What will change?

The government are intending to introduce a right to request a more predictable contract for all workers, including those on zero hours contracts and agency workers. This request can be made after 26 weeks’ service and will require the employer to respond within three months.

Actions

It is a good idea to start considering your arrangements with casual workers including whether the contracts reflect what the actual working practices are. It is likely to become more difficult in the future to use traditional zero hour contracts.

Employment Status Reforms

When will this change?

No current date

What will change?

The government has stated that it intends to legislate to improve the clarity of the employment status tests, but does not give details on what this would entail.

The intention is to better align the employment law and tax interpretations.

Actions

This is very much at a formative stage and is unlikely to be changed soon. Employers are recommended to keep an eye out for updates on this.

Tips

When will this change?

No current date

What will change?

The government intends, in relevant sectors, to introduce law to ensure that tips are passed directly to the individual, rather than taken by the employer.

Actions

This proposed change is likely to impact mostly on the hospitality sectors. Employers should consider their policies on tips and how employees receive these.

Holiday pay – enforcement for vulnerable workers

When will this change?

No current date

What will change?

The government has stated its intention to enforce holiday pay rights for vulnerable workers. It is not yet clear how this will be done or who exactly this will apply to.

Actions

Ensuring holiday pay is calculated correctly and that your business is aware of what payments should be included in holiday pay is the best way to prepare for any future changes in this regard.

Confidentiality clauses

When will this change?

No current date

What will change?

The government proposes to legislate to prevent the misuse of confidentiality clauses in situations relating to workplace harassment and discrimination. This will include legislation to confirm that disclosures may be made to police. It may also require written statements of employment particulars to set out the limits of any confidentiality clause.

Actions

Most settlement agreements already have exclusions to the confidentiality clauses. It is recommended that your template agreements be revisited to ensure that your clauses go no further than is necessary to protect legitimate business interests.

Redundancy and pregnancy

When will this change?

No current date

What will change?

A private members’ bill has been introduced to prohibit making women redundant during pregnancy, maternity leave and for six months after the end of maternity.  It is very rare such bills make it into law.

The government are also consulting on extending the existing rights for those on maternity leave in redundancy situations. The government have announced its plans to legislate ‘when parliamentary time allows.’

Actions

Watch this space for further developments.

Transparent and predictable working conditions

When will this change?

No current date

What will change?

An EU directive aimed at protecting workers with unpredictable working hours requires member states by 1 August 2022 to transpose the directive into UK law. Whether we do this will depend on our exit from the EU.

The provisions include:

  • A requirement, where the work pattern is unpredictable, for the employer to set out in the written statement the number of guaranteed hours, the pay for additional work, the hours and days which the worker may be required to work.
  • A ban on probationary periods exceeding six months (unless justified on an exceptional basis.)
  • A ban on exclusivity requirements unless justified on certain grounds.
  • Protection for workers with unpredictable patterns to enable them to refuse an assignment without adverse consequences if they have not been given reasonable notice or if it takes place outside working hours.
  • Compensation if the employer cancels an assignment without reasonable notice.
  • Measures to prevent abuse of zero-hours workers.
  • A right to request more predictable and secure working conditions after six months, and to receive a reasoned written reply within one month.
  • Employers to pay for mandatory training, during working hours where possible, and for it to count as working time.

Actions

As we have seen earlier, it is likely to become more difficult in the future to engage workers
on more casual contracts. Businesses should ensure that their current contracts with casual workers reflect actual working practices.

Single enforcement body

When will this change?

No current date

What will change?

The Government are consulting on the proposal to create a single enforcement body for employment rights including, but not limited to, enforcing rights to statutory sick pay and unpaid tribunal fees. The consultation closes on 6 October 2019.

Actions

Watch this space for further developments.

Proposals to reduce ill health-related job loss

When will this change?

No current date

What will change?

The Government are consulting on measures to reduce ill health-related job loss. Proposals include a right for non-disabled employees to request modifications to assist their return from sick leave. They also include changes to the SSP system including removing the idea of ‘qualifying days’ and removing the lower earnings limit for eligibility.

Actions

Watch this space for further developments. Now is a good time to look at your return to work procedures and ensure you have clear guidelines and policies for managing sickness absences.

Criminal record check reforms

When will this change?

No current date

What will change?

The Ministry of Justice has proposed changes to criminal record check legislation, dictating what ex-offenders must disclose to employers. The proposed changes will mean that less serious offences of over four years will not have to be disclosed following a rehabilitation period and the time during which sentences of four years or less have to be disclosed will be shortened.

Actions

Watch this space for further developments.

Directive on work-life balance for parents and carers

When will this change?

No current date

What will change?

An EU directive aimed at providing additional rights to parents and carers requires member states by 1 August 2022 to transpose the directive into UK law. Whether we do this will depend on our exit from the EU.

This directive includes, among other things, extended and more flexible parental leave rights and the right to 5 days per year of carers leave for those caring for seriously ill relatives.

Actions

Watch this space for further developments. We are likely to see an expansion of family friendly rights and now is a good time to ensure that you are clear on the various entitlements.

The Government have launched a consultation in July 2019 which proposes introducing neonatal care leave and pay and requires greater transparency from employers over their flexible working and family-related leave and pay policies. This is therefore a hot topic at the moment.

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