Changes to Employment Contracts: What Do I Need To Know?

As noted in our previous blog, from 6^th April 2020, there will be some changes to the written particulars employers have to provide employees. The written particulars are known as a ‘section 1 statement’, which must contain certain information. This is not the same as a contract of employment, although in practice there is little difference as it makes practical sense to provide the employee with a contract which contains all the required information, as well as any other contractual terms which are agreed.

The changes, broadly, are as follows:

• The information will have to be provided on the first day of employment.
• The right will be extended to ‘workers’ as well as employees.
• Additional information must now be provided in the statement and there are some changes to the rules on what can be in a separate document.

We will look at each of these in a little more detail.

Day one right

At the moment, an employer has to provide a written statement containing specified information to a new employee within two months of them starting work. From 6^th April 2020, this must be provided on or before the date employment starts. There are some limited exceptions to this, which are discussed further below.

Extension to workers

From 6^th April 2020, workers will have the same rights as employee to be provided with written particulars on their terms and conditions. Whether an individual is a ‘worker’ can be a grey area, but the Employment Rights Act defines a worker as anyone working under a contract of employment, or any other contract where they undertake personally to perform work or services for a party who is not a client or customer of a business being run by them. This may include contractors, casual or zero hours workers.

Information to be provided

At the moment, the principal statement – which in practice is usually the contract of employment – must contain the following information:

• The names of the employer and employee
• The start date of employment (including details of any previous employment which is deemed to count for the purposes of continuity)
• Details of pay, including how it is calculated and how often it is paid.
• Hours of work
• Holiday entitlement and pay, including public holidays
• Job title and or description
• Place of work, including an indication if there are multiple places of work
• Notice period (by employer and employee)
• Terms relating to absence and sick pay
• Disciplinary rules and procedures (or a reference to a reasonably accessible document where these are contained)
• A person to refer any disciplinary appeal to and how to make such an appeal;
• A person to apply to in connection with any grievance and how such an application can be made.
• Whether the role is permanent or, if not, the duration of temporary work or end date of fixed term work.
• Terms related to work outside the UK for one month or more;
• Any collective agreements which are applicable; and
• Terms and conditions relating to pensions.

From 6 April 2020, some further information will need to be included. This is:

• Work pattern – normal working hours, the days of the week the worker is required to work, whether these hours are variable, and (if so) on what basis they will be varied.
• Any entitlement to paid leave, including maternity and paternity leave
• Details of all remuneration or benefits (i.e. those not covered by the other provisions above). This may include bonus or commission, life insurance, private healthcare, company car or car allowance and so on.
• Details of any probationary period, where applicable;
• Any training entitlement provided by the employer, whether or not any of that training is mandatory and whether the employee requires to undertake any training which is not paid for by the employer.

Some of the required information can be given in separate documents. From 6^th April 2020, this will be terms relating to incapacity and sick pay, pensions and training entitlement. This may therefore be contained in a separate policy or staff handbook if preferred, but must still be given on the first day of employment.

Some of the information can be given in instalments within two months of employment starting rather than on the first day. From 6^th April 2020, this will be information about pensions, collective agreements, training entitlement and disciplinary/grievance information.

If there is any change to any of the required information, the employee must be given another written statement detailing the change as soon as possible and no later than one month after the change.

What do employers have to do?

The new requirements will apply to any employee or worker starting after 6 April 2020, but will not apply to existing employees who started work before 6 April 2020, so there is no need for employers to update existing employment contracts retrospectively. However, current employees will be able to request a compliant statement, which must be provided within one month of the request.

It is common for some of the new required information to be in contracts of employment anyway, such as detailed hours of work and probationary periods. In practice, this may therefore not make a significant difference to the type of documents which are issued. However, given it will be a legal requirement for the above information to be included, it is advisable for employers to consider updating any template contracts now and ensuring that contracts are drafted and ready for new employees and workers who are to start after the 6^th April 2020. Although certain information can be given in instalments, in practice it is often more straightforward to provide all of the information at once.

Contact our employment solicitors

MSHB can assist with advice on these changes or drafting of new or updated contractual documents. For help with this or any other issues, contact our Employment Team today.