By Samantha Dickinson and Priya Saddington-Poole
A written employment contract should form the foundation of the relationship between a business and its employees. A well-drafted employment contract sets out each party’s rights and obligations and will therefore be the arbiter of any disputes that may arise during the working relationship.
Without a written document in place, not only will a business be in breach of its obligations under the Employment Rights Act, but there is also a risk that terms will be implied into the relationship (either by a Tribunal or by statute) that may not be desirable.
In April 2020, changes were made to the law governing the documentation that must be issued to new staff. Businesses may have overlooked these new requirements whilst they were busy dealing with lockdown and furlough!
This note sets out the changes your business should make to comply with the new employment rules which relate to any person starting work on or after 6 April 2020. This is not a definitive guide to the law and should not be taken as given specific legal advice.
Written statements are a right from Day 1
Effective from 6 April 2020, all new employees and workers will have the right to a statement of written particulars from their first day of employment, rather than within 2 months of their employment commencing. The “section 1” statement (as required by s.1 Employment Rights Act 1996) requirement now applies not just to employees, but also workers.
Inclusion of additional information
In addition to the terms and conditions of employment that were previously required, the following information must now also be set out in a single document:
- The working pattern and, if hours/days are to vary, details of how the variation will apply;
- Entitlement to any other paid leave in addition to annual leave (such as maternity/paternity leave);
- Details of additional remuneration and benefits;
- Conditions and length of any probationary period; and
- Any mandatory training entitlement provided by the employer and any other training which the worker must complete that the employer will not pay for (although these particulars can be provided in a separate reasonably accessible document).
Current employees
These changes are not retrospective, so businesses do not have to change contracts/statements for existing employees. However, employers should note that existing employees can request an updated section 1 statement and if they do, employers need to respond within 1 month.
If there have been changes to an existing employees’ terms of work post-April 2020, this acts as a “trigger” and accordingly, the employer must provide a new statement “at the earliest opportunity” and no later than 1 month after the change.
What if the employer fails to comply?
Failure to comply with the rules relating to section 1 statements can give rise to an Employment Tribunal claim which could result in 2 - 4 weeks’ pay, where an employee or worker brings another successful claim. It is not a stand-alone claim.
Why have these changes been made?
The changes resulted from the government’s “Good Work Plan” that was published in December 2019. It aims to increase transparency between employers and their staff as well as improving employment rights.
Next steps?
Organisations should consider what is needed for new recruits in advance of their first day of employment.
Although there is some information that can be given at a (slightly) later date, it may make more sense to provide all necessary information in a single document.
Employers should examine what processes are in place should existing employees request an updated statement.
Following on from the Covid-19 pandemic, an employer who wishes to oblige their employees to accept short term working or temporary layoff needs to ensure their contracts entitle them to impose such measures.
This may become important in the future should there be a second lockdown that comes without the safety net of a government-backed furlough scheme.
If you wish to discuss any of the matters touched upon above in more detail or should you have any specific questions about your existing employment contracts, please contact Samantha Dickinson from our Employment department on 0800 84 94 101.