Contracts Changes Ahead

You may remember from our earlier Legal Update whats-on-the-horizon-for-2020 that April promises to be a busy time for employment law changes this year. One of the key areas that will be affected are employment contracts.

What’s Happening?

All employees are currently entitled by law to a written statement of particulars of their employment (often called a ‘section 1 statement’). In many cases employers meet this requirement by setting out the necessary particulars in the employee’s contract of employment.

For employees who start employment from 6th April 2020 onwards:

  • There will be a change to the timing of providing contracts of employment

Currently, employers can provide contracts containing the required information within two months of an employee commencing employment. As such it’s common practice in many organisations not to issue contracts until sometime after the employee has started work. If you are one of the organisations that does this, you will need to change your recruitment practice for employees who start employment on or after 6th April 2020. This is because contracts containing the required information will need to be  provided on or before employment commences – it becomes a day one right.

It’s important to ensure that the necessary people in your organisation are made aware of the forthcoming change and that your internal processes are adjusted accordingly where necessary. To assist employers with recruitment Kingfisher Professional Services Ltd has a new template offer letter which is available from your Employment Law Specialist on request.

  • There will be a change to what needs to be covered with additional information needing to be provided

The majority of the information will need to be included in the contract of employment itself, but there are a few specific exceptions where an employee can be referred to another reasonably accessible document, such as an Employee Handbook, provided this is referred to in the contract of employment.

So, what are the new requirements?

– Hours of work

In addition to the information regarding hours of work that currently need to be provided, employers will need to provide particulars of the days of the week the employee is required to work and whether or not these hours/days are variable. Where they are variable, particulars are required of how they vary.

– Benefits

Details will need to be provided of all the benefits an employee is entitled to,  including non-contractual benefits.

– Probationary period

If you are using a probationary period, you must include any conditions relating to this and its duration. If you are not using a probationary period, you will need to include a statement to this effect.

– Training

Details of any training entitlement provided by the employer, any part of that training the employee is required to complete and any other training which the employer requires the employee to complete and which the employer will not bear the cost of.

– Any other paid leave

Employers are already required to provide certain information regarding sick leave and pay and holiday, but details of any other paid leave will also need to be provided. This would cover paid leave such as maternity, paternity, adoption, shared parental leave and parental bereavement leave as well as other paid leave which may be discretionary such as compassionate  leave and jury service.

Whilst most employers include a note about some types of ‘other leave’ in their Employee Handbook, in most cases it’s likely that more detailed policies will be required and reference to these will need to be made in the contract of employment.

If an employer fails to provide the statutory written particulars, employees can only bring a tribunal claim for compensation if they are also bringing another specified claim in the tribunal, for example an unfair dismissal claim or a discrimination claim. If compensation is awarded for failure to provide the written particulars it will be between two to four weeks’ pay (subject to the statutory cap on a weeks’ pay).

The new requirements do not apply to employees employed before 6th April 2020, however,  where an existing employee requests an updated statement, an employer will have one month to comply.

Other Changes

Some changes to contracts may also need to be made for existing and new employees where they will be affected by the change in the reference period used to calculate an average weeks’ pay for holiday pay purposes. The change will affect those whose hours/pay varies, such as employees who do regular overtime, earn commission or don’t have set hours. Currently, a 12 week reference period is used to calculate an average weeks’ pay for holiday pay purposes, this reference period will be increased to 52 weeks (or the number of complete weeks for which the worker has been employed if less). The change will take effect from 6th April 2020.

Next Steps

If you are recruiting for a role which will begin on or after 6th April 2020 or you would like to discuss your situation please contact your Employment Law Specialist.

If you have an employment law matter you require assistance with please do not hesitate to contact Kingfisher Professional Services Ltd as we are happy to help.


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