2020 Changes in Employment Law

Contracts of Employment

Employers are currently obliged to provide employees with a written statement of certain terms of their employment. From 6 April 2020, the right to a written statement of terms will apply to all workers, rather than just employees.

On 6 April 2020, the Employment Rights Act 1996 will be amended to provide that a written statement of terms must be given on or before the first day of employment as opposed to within two months of employment starting. In addition, the amount of information that must be included within the statement has been amended to include;

• Whether there is a probationary period;
• More detail surrounding hours and days of work and whether these are variable;
• Details of other paid leave (in addition to holiday) e.g. family leave, paid study leave, compassionate leave;
• Training provisions, including whether any training is mandatory and/or must be paid by the worker; and
• Benefits not covered elsewhere in the statement.

As a result of these changes employers will need to ensure that contracts of employment that are issued to new employees are amended, to incorporate these changes, and issued promptly. Contracts do not need to be re-issued to existing employees however, existing employees will be able to request an amended written statement of terms and this must be provided within one month of the request.

Failure to provide a written statement of terms in accordance with legislation could result in an employer being liable to pay the employee or worker up to four weeks’ pay, if the employee successfully pursues a substantive claim in the Employment Tribunal.

Parental bereavement leave and pay

Under the Parental Bereavement (Leave and Pay) Act, employed parents who have lost a child will be entitled to two weeks’ leave, irrespective of their length of service, to allow them time to grieve away from the workplace. It is expected that this new right will come into force in April 2020 and, once the new regulations are in place, they are going to include a number of prescriptive rules around eligibility, notice, pay and how the leave can be taken. Employers should therefore ensure that their handbooks, as a minimum, match the statutory rules.

IR35

From 6 April 2020, the off-payroll working rules will be extended to large and medium sized companies in the private sector. The off-payroll working rules mean that the burden of making a determination of employment status falls on medium and large “end-user clients” who then need to notify their contracting party and the worker of that status determination. In other words, from April 2020 the burden of determining the status of the contractor falls on the company as opposed to the intermediary. If the off-payroll working rules apply, then the fee-payer is responsible for deducting tax and national insurance and paying it to HMRC.

Holiday Pay

From 6 April 2020, the reference period for determining an average week’s pay to calculating holiday pay will increase from 12 weeks to 52 weeks, or if the worker has been employed for less than 52 weeks, the reference period will be the number of complete weeks that the worker has been employed.

Termination Payments

From 6 April 2020, all termination payments above £30,000 will be subject to class 1A NICs. From 6 April 2020, all termination payments above £30,000 will be subject to class 1A NICs. Employers should therefore ensure that all termination payments are taxed accordingly in order to ensure that they do not fall foul of the relevant legislation.

If you have any queries regarding the upcoming changes and how these could affect you, or your business, do not hesitate to contact one of the employment law specialists at Thackray Williams.