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Employment law changes - preparing for April 2020
As our readers may know, April tends to be a busy time in the year where employers are usually required to implement/amend something in line with any new legislation. April 2020 will be here before we know it and this time, we are seeing many many more changes than normal…
Before we cover some of the changes below, we want to stress the key messages we are telling our clients:
- “review, and update if necessary, your contracts”; and
- “scrutinise your working relationships/arrangements with staff carefully”.
The reasons will become clear as you make your way through this article, but in summary, not only will this be necessary to ensure that your contracts will be fit for purpose (considering the new requirements to issue more detailed statement of terms - see below), it will also assist organisations to analyse its working relationships with its staff to make sure that it does not fall foul of the new requirements when it comes to workers.
Some of the upcoming changes have resulted from the Good Work Plan which was published in December 2018 and which has been described as the government’s “vision for the future of the UK labour market”. We have all seen the negative press over zero hours contracts, and it is certainly clear that the government is seeking to enhance clarity when it comes to employee/worker status.
We have detailed below some of the changes which we are expecting in April 2020 and how employers can begin to prepare for these changes. Please note, below is just a sample of the proposed changes, for a more detailed note please see our document “Key changes to employment law in 2020 and beyond” and refer to our employment services page for further information.
In the Good Work Plan the government made a commitment to improving the holiday pay arrangements for seasonal workers. To achieve this, the reference period for determining an average week’s pay will increase from 12 weeks to 52 weeks, or if the worker has been employed for less than 52 weeks, the number of complete weeks for which the worker has been engaged.
Recommended Action Points:
- Employers should consider which workers this new reference period will relevant for and how to go about implementing the new reference period.
- Employers should also ensure that records of pay for the 52 weeks prior to 6 April 2020 is up to date and continue to accurately record such data.
Statement of terms
As a result of its commitments set out in the Good Work Plan, the government will be extending the entitlement to a statement of ‘written particulars’ to include workers as well as employees. Currently employers have up to two months to issue the statement to any employee working for them for more than a month, but from 6 April 2020 the right to a statement of written particulars will become a day one right.
The information to be included in the written statement from day one is also being expanded. In addition to the current information that must be provided for all new joiners on or after 6 April 2020 the statement should also include:
- how long a job is expected to last, or the end date of a fixed-term contract
- how much notice the employer and worker are required to give to terminate the agreement
- details of eligibility for sick leave and pay
- details of other types of paid leave e.g. maternity leave and paternity leave
- the duration and conditions of any probationary period
- all remuneration (not just pay) e.g. vouchers, lunch, health insurance
- the normal working hours, the days of the week the worker is required to work, and whether or not such hours or days may be variable, and if they may be how they vary or how that variation is to be determined
- any training entitlement provided by the employer, any part of that training entitlement which the employer requires the worker to complete, and any other training which the employer requires the worker to complete and which the employer will not bear the cost.
Recommended Action Points:
- Employers should start to review their current contracts and recruitment processes to ensure that all the required information is included in their contracts.
- Also consider putting in place procedures as part of the recruitment process to ensure documentation is issued on or before the first day of work.
Extension of IR35 to private sector
The IR35 tax rules are aimed at reducing tax avoidance for off-payroll contractors working through personal service companies (PSC).
It was proposed that from 6 April 2020, medium and large sized private sector businesses will become responsible for assessing the employment status of the off-payroll workers they engage. The simple reason behind this is cost. The government has reported that the cost, in terms of lost tax revenue, of non-compliance with the off-payroll working rules in the private sector is growing and will reach £1.3 billion a year by 2023/24.
Whilst this is the case, this proposal is contained in the draft Finance Bill – the passage of which may be delayed as a result of the General Election on 12 December 2019. The expected implementation date of 6 April 2020 should be regarded as provisional, dependent on the outcome of the General Election.
Recommended Action Points:
It has been recommended that businesses affected by the proposed reform should consider:
- looking at their current workforce (including those engaged through agencies and other intermediaries) to identify those individuals who are supplying their services through PSCs;
- determine if the new off-payroll rules will apply for any contracts that will extend beyond April 2020. Businesses are encouraged to use the Check Employment Status for Tax service to do this;
- start talking to contractors about whether the off-payroll rules will apply to them; and
- put processes in place to determine if the off-payroll rules apply to future engagements.
Agency Workers – Swedish Derogation Appeal
The “Swedish derogation” principle (which currently allows employers to avoid pay parity (after 12 weeks) between agency workers and direct employees if certain conditions are met) will be removed.
By no later than 30 April 2020, temporary work agencies must provide agency workers whose existing contract contains a Swedish derogation provision with a written statement advising that, with effect from 6 April, those provisions no longer apply.
In addition, temporary work agencies must provide agency workers 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.
Recommended Action Point:
If you do not have agency workers, then there are no action points to take. If you do have agency workers, you should review the information that is being provided to them to ensure that it will meet with the new requirements.
Parental bereavement leave
In October 2017, the government confirmed its backing for a private members’ bill. The Bill, which became the Parental Bereavement (Leave and Pay) Act on 13 September 2018, will entitle employees who lose a child under the age of 18, or suffer a stillbirth from the 24th week of pregnancy, to two weeks’ unpaid leave, as a right from day one of their employment. The act is expected to come into force in April 2020.
Recommended Action Points:
- Employers can start to prepare by:
- Considering a written policy – employers should consider having a written bereavement leave policy in place, as this can provide certainty and security at a difficult time.
- Being aware of religious and cultural requirements around bereavement – employers should be aware of the risk of racial or religious discrimination claims that may arise from refused requests for time off for religious observances on death. Certain religions require a set time for mourning.
- Preparing for the possible long-term effects of bereavement. The effect of grief could manifest itself both physically and mentally, resulting in a long-term condition or illness. Employers should be mindful of this should there be a change in performance, behaviour or absence. Requests for time off or increased sickness leave should therefore be treated carefully, in the knowledge that a long-term condition could give rise to the risk of a disability discrimination claim.
- Being aware of bereaved mothers’ maternity leave rights - employers should remember that mothers who lose a child after 24 weeks of pregnancy, or during maternity leave, will not lose their entitlement to maternity leave and pay. Rights to paternity leave and shared parental leave (where notice of leave has been given) will generally also be maintained in these circumstances.
How can we help?
As we have highlighted above, the key message is to review your contracts and ensure they reflect the working practices taking place. It is also crucial that businesses look at all their working relationships and ensure that all parties are aware of their status. If you would like further information, advice or assistance on preparing for changes to employment law due in 2020, then please do not hesitate to contact a member of our employment team.
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