Amongst all of the politics which filled the media in 2019, the Government’s flagship legislation, designed to improve the landscape for employees and workers continued, with consultation continuing in early 2018 and results published in mid 2019.
The proposals were wide ranging, and though the framework for implementation is not yet completely clear, some key areas are due to change in April 2020 which all of our members need to be aware of as they will have to make fundamental differences to current practices.
Changes to Statement of Terms and Conditions – A Day 1 Right.
Currently, employers have 8 weeks to provide new employees with a Statement of Terms and Conditions, which for most employers is via an employment contract.
From 6 April 2020, this becomes a first day right – meaning that the employer is required to provide this statement on the first day of employment for employees, of or the first day of engagement for workers.
Under Section 38 of the Employment Act 2002, unless an employer can demonstrate that there are exceptional circumstances, employees could be entitled to an award of between two and four weeks’ pay if their employer fails to provide them with a written statement of initial employment particulars or of any changes to their terms of employment. This right only applies, however, if the employee has successfully brought another substantive claim, for example Unfair Dismissal.
Members will potentially need to change their recruitment and onboarding process to ensure that the statement is provided on Day 1 of employment. This change also extends to workers from the same date. Scottish Engineering can provide employee and workers Statements of Terms appropriate to the legislation for members who take our services – please contact us if you need some help.
Changes to Statement of Terms and Conditions – New Requirements
In addition to the above, there are new requirements for what must be contained within Terms and Conditions, for both employees and workers, what again are due to be implemented on the 6th April 2020.
In summary, the new requirements mean that the Statement must additionally contain details of:
- Normal working hours, including the times of the week when the employee/worker is required to work, whether these hours or days may be variable and, if so, how they may vary.
- Any benefits other than pay that the employee/worker is entitled to, including non-monetary benefits such as vouchers or meals.
- Any probationary period, including the duration and any conditions.
- Sick pay entitlement.
- Details of any other paid leave such as maternity leave and paternity leave.
- Any training to be provided and details of any mandatory training that the employee/worker must complete.
Some of this will be new to most of our members companies. Again, we will be able to provide a compliant Statement of Terms and Conditions for our members companies who take services.
Changes to Holiday Pay Calculations
Hopefully we are all aware of the requirement to ensure that Holiday Pay is calculated to reflect average pay, which should include shift pay, overtime and commission. This has meant that employers must average pay over the preceding 12 weeks before the holiday is taken, which should form the calculation for the Holiday Pay.
Employers were required to exercise some discretion in the favour of employee if, for example, the employee had been off sick or on unpaid leave, which has the consequence of reducing that average. If that was the case. employers are expected to ensure that the 12 week period is generally representative of average pay.
Changes to be introduced in April 2020 mean that the reference period – the period in which pay is averaged to give a value for holiday pay – is changing from 12 weeks to 52 weeks. This ensure employees don’t lose out if they take their holidays at quiet work times. This should be the preceding 52 weeks, unless as before there has been a period of sickness absence or other unpaid leave which might affect this figure, making it not generally representative.
This will be another – probably unwelcome for employers – change in this formula which has means changes to systems and/or lengthy calculations.
More broadly, the government plans to start an awareness campaign to make sure that employers and staff know that holiday pay must be calculated on the basis of average pay, so it is vital that employers are where they need to be. HMRC will continue the tough approach to enforcement of National Minimum Wage and extend the same approach to enforcement of holiday pay
Proposed Changes without Implementation Dates
There are a number of other changes outlined in the Plan, which are therefore likely to be legislated and implemented in the medium term.
Zero Hour Contracts
Zero hours contracts will still be permitted – this has been a contentious subject with some political factions pressing for a ban zero hours contracts.
However, the Good Work Plan will give employees and workers who do variable hours a right to request a more stable working pattern after they’ve been with their employer for 26 weeks. This might mean:
- A guaranteed minimum number of hours to enable them to secure a mortgage or plan their finances.
- Fixed days of work to enable them to plan their non-working time e.g. for childcare or a second job.
It is likely that there will be a process for the employer to follow and limited grounds for refusing a request – similar to how flexible working requests are currently dealt with.
Employment Status
The Good Work Plan will clarify the definitions of ‘employee’, ‘worker’ and ‘self-employed’ and ensure greater consistency between the tests used by HMRC and the Employment Tribunals to reduce confusion and help businesses categorise their staff correctly. This is essentially good news and remains an area of confusion for our members who have a resource mix.
The Good Work Plan will make it harder to break continuous service
At the moment, if an employee stops working for you and there is no expectation that they will come back, their continuous service will be broken unless they come back to you within a week. This mean that if you let them go because you had no work for them, but then you find some more work for them two weeks later, their continuous service would drop back to zero.
The intention is to amend this so that if the employee comes back within four weeks their continuous service will be preserved. This may have an impact on current practices where some employers break service by design to avoid continuous service if, for example, staff move from temporary to permanent roles.
