Contract

The Government’s Good Work Plan is due to come into effect on 6 April 2020. It includes various changes to contracts of employment which employers will need to act on. Carrianne Matta, employment solicitor, outlines what employers need to know.

Despite being rather busy with Brexit, during the final few months of Theresa May’s leadership, there was a flurry of proposals and consultations on employment law issues.

Many of these proposals were set out in the Government’s Good Work Plan, which aims to ensure that individuals have better access to – and understanding of – their employment relationship.

The change which is likely to have the greatest impact on employers is around what should be in the contract or ‘written statement of terms’ from 6 April 2020. There are three key impacts:

  1. What should be in these contracts is changing (more on this below).
  2. When you have to give the contract is changing. You will lose the two month ‘grace’ period and need to give the contract on or before your new employee’s start date.
  3. Workers (people who provide personal service but who don’t always have full employment rights) will also need to be given a contract. This could include casual workers or people engaged as bank staff for example.

Assessing a person’s status, to work out whether they are a worker or employed or self-employed, can be complex. It’s best to take expert legal advice if you are not sure as the implications of getting this wrong can be far reaching, both in terms of historic tax liability and legal claims at Employment Tribunal. 

So, what should be in the contract or written statement from 6 April?

Currently a standard rolling contract should include:

  • Name and start date for the employee (including if any previous employment counts towards service).
  • Their job title or description of duties.
  • Their place of work.
  • Salary – rate of pay, how it is calculated and intervals of pay. 
  • Hours of work.
  • Terms & Condition’s relating to incapacity for work, including sick pay, self-certification and delivery of medical certificates.
  • Holiday entitlement including public holidays, when the holiday year runs and approval process. Whether holiday can be carried forward and entitlement on termination. 
  • Termination and notice periods for both employee and employer.
  • Disciplinary and Grievance Procedures and where to find them, including where to appeal.
  • Pensions.

In addition, from 6 April 2020, you will be required to ensure your contracts also include: 

  • The days of the week the worker is required to work, and whether the working hours or days may be variable, including details of how they may vary. 
  • If there is, or is not, a requirement of the post to work overseas for a month or more.
  • Any entitlement to paid leave (for example maternity leave and paternity leave).
  • Any other non-contractual remuneration or benefits provided e.g. bonuses.
  • Any probationary period, including any conditions and its duration.
  • Any training provided which the employee/worker is required to complete and the cost is payable by the employee.

What employers need to do

There is no requirement to amend contracts for your staff employed before 6 April 2020. These changes are just for appointments made on or after 6 April 2020.

You should check and review any templates you have in place and consider also if other terms need updating to better protect your business and reflect the culture and ethos of your organisation. This document is after all starting your relationship with the employee or worker, along with any induction process.

Organisations not in the habit of issuing terms before individuals start work (or at all!), will have to review their on-boarding procedures to ensure contracts are issued on or before employee start dates. This is a sensible step to take at the same time as checking a person’s right to work in the UK which should also be done before employment starts.

Transitional arrangements apply for existing employees (not workers) already working for you on 6 April 2020. Existing employees can request an updated written statement and you must provide one within one month of the request. 

You must also give employees a statement of changes where, at any time after 6 April 2020, there is a change in one of the particulars required by the amended legislation. An entire new written statement would not need to be issued but the statement of changes must be given at the earliest opportunity and no later than one month after the change.