News & Events
Important changes to employment law are coming in effect on 6th April 2020 as part of the Government’s Good Work Plan. To help you ensure your business is prepared, we have set out the changes for you below.
The Government’s Good Work Plan was published in late 2018 in response to the Taylor Review, a 2017 report on working practices in the UK. The Good Work Plan promised a number of changes to the law that employers need to make sure they are aware of. Many of these changes came into force last year (click here to read our previously produced article, ‘The Good Work Plan: How will it impact your business?’ from Jonathan Dale) but changes to section 1 statements of terms and conditions of employment will become law on 6 April 2020.
What are the changes?
- The obligation under section 1 of the Employment Rights Act 1996 (ERA) on employers to provide a written statement of particulars will be extended to workers, as well as employees.
- The majority of written particulars must be provided in a single document on or before the date on which the employment starts. In other words, there is no longer a minimum service requirement before the individual is entitled to receive a statement of terms and conditions and they must be given the statement on their first day of work at the latest.
- There are some exceptions for the required particulars relating to pensions, collective agreements and any training entitlement. These must be provided to the worker within two months of the employment starting.
- The statement must contain the following additional particulars:
- days of the week that the worker is required to work, whether the working hours are variable and how any variation will be determined;
- any paid leave to which the worker is entitled including maternity, paternity leave;
- details of all remuneration and benefits (this does not mean just pay);
- whether there is a probationary period; and
- any training entitlement provided by the employer, including whether any training is mandatory and/or must be paid for by the worker.
What do these changes mean for you and your business?
The upcoming changes in the Good Work Plan represent an excellent opportunity for you to review your contracts of employment in order to ensure that they comply with the basic requirements of section 1 ERA. To help you do that, here are some things to keep in mind when you are drafting a contract of employment.
- Having non-contractual policies in place: Policies and procedures should be non-contractual. This provides your business with the flexibility to vary them without having to seek the employee’s consent to do so. It also means that there will be no breach of contract if the policies and procedures are varied without the employee’s consent or you do not adhere to them (for whatever reason).
- Generic consent clauses to data processing in employment contracts: Since the introduction of the General Data Protection Regulation (GDPR), employers can no longer rely on generic clauses in contracts of employment as consent by the worker for the employer to process their personal data. Instead, workers should be issued with a privacy notice dealing with the processing of personal data and the worker giving their consent to such processing.
- Failing to update contracts on a regular basis: With case law rapidly developing and legislative changes frequently being introduced it is fundamental that your contract of employment is reviewed and updated regularly in order to ensure that it is legally compliant. Our employment law team can help you with this. Your contract is effectively out of date once a new term or legal requirement is introduced and is not reflected in a revised document.
- Not including a PILON clause: If the contract does not contain a payment in lieu of notice (PILON) clause and your business pays an employee in lieu of their notice, this will amount to a breach of contract. Not many employees will be too concerned at being paid and not having to work for the money. However, the breach of contract is likely to mean that your business cannot then rely upon any restrictive covenants in the contract. The employee is free to do as they wish and this could damage your business and customer-base. A carefully drafted PILON clause can deal with the circumstance in which a PILON is made and what exactly will be paid to the employee.
- Dismissal of employees in receipt of permanent health insurance type benefits: Some employers have come unstuck in the past when dismissing an employee who was in receipt of permanent health insurance (PHI) or related benefits. If the contract does not deal properly with the issue of PHI, any dismissal of an employee who is entitled to such payment may be unfair, in breach of contract, discriminatory or even all three. For some unfortunate employers, Employment Tribunals or Courts have ordered them to pay their former employee the equivalent of what they would have received under the PHI cover. In some cases, that amounts to a significant percentage of their full salary until retirement age – in other words hundreds of thousands of pounds. Had their contracts of employment been drafted differently, that could have been avoided.
How can we help you?
Now is the perfect time to prepare for the above changes and consider how they may impact your working practices before they become law in April 2020.
Let our experienced team work with you to navigate the pitfalls of contract drafting to ensure both you and your employees are legally protected. If you need help preparing for these changes, please contact Nick Wilson, partner in our employment law team, by emailing email@example.com or speak to one of the team today by calling 01482 325242.