Claire Vane of Integrated Resouces writes:
There were to be five major legal changes due in April, but with the current crisis, the changes to IR35 have been postponed for a year. These changes will be affecting medium and large businesses but even these now have a year’s grace. I will therefore deal with the other four major changes which are going to be implemented this April, as follows:
Change one concerns written particulars of employment. From April 6, 2020, all workers employed after this date (and please note this applies to employees and other workers) are required to have a written statement of terms from day one. There has always been a requirement to issue written statements of terms within the first eight weeks of employment, but this has now been brought forward to day one as a compulsory requirement. There has always, too, been a compulsory list of elements that should be included but this has now been expanded and, amongst other things, will require employers to detail benefits, days and times of work, even when variable, and how long employment will last. For those employing zero hours or casual workers, it will be very important to articulate clearly, why and how the varying times and levels of work are required. It will be important on all these areas to articulate clearly what is actually the case. There are a number of additional items, but these are the major requirements.
The second area for change from April 2020, is in relation to holiday pay. These changes have been brought about to even out payments related to what may be irregular patterns of working in the case of some individuals. At present, the calculation of holiday pay is made on the average of normal weeks over 12 weeks. The period on which normal pay is to be averaged will now be 52 weeks. If an individual has fewer weeks service than 52 then the whole of the employment to date is used for averaging. There is an advantage, for example, to those who have irregular patterns when holiday leave is taken in a quiet period and indeed there is also an advantage to an employer who may find that the employer is paying paid leave entitlement after a particularly busy period, so this will even out the calculation and therefore payments.
Number three is concerning agency workers. For some time, agency workers have been entitled to the same pay and paid leave entitlement as other workers after 12 weeks of service. However, there has been an opt-out of this called the Swedish Derogation. The Swedish derogation is shorthand for a special type of employment contract. Its official name is a “pay between assignments” contract because workers engaged on these contracts with a temporary worker agency give up the right to pay parity with comparable permanent staff in return for a guarantee to receive a certain amount of pay when they have gaps between assignments. This Swedish Derogation is going to stop from April 2020 and all agency workers will have equal pay after 12 weeks of service (no opt-out). From April 6, 2020, all agency workers must be given a statement of terms showing the right to equal pay. From April 30, 2020, agencies need to write to all existing agency workers confirming that the Swedish Derogation no longer applies. The pay parity issue is likely to have a consequential knock-on effect for employers who may need to review the way they use agencies.
The last one is concerning parental bereavement leave. The parental bereavement (Leave and Pay) Act 2018 provides for at least 2 weeks of leave for employees following the loss of a child under the age of 18 or for a still birth after 24 weeks of pregnancy. The parental leave regulations of 2020 introduce parental bereavement leave and consequent parental bereavement pay to all parents who face a bereavement upon the death of a child under 18. This can be taken either as one week or two and at different time and will be paid at the lower of £151.20 or 90% of salary for each of those two weeks. This is a particularly sad topic and it is hoped that many good employers, who are currently paying far in excess of those minimum amounts, will find that they are able to continue so doing. The letter of the law is above but there can always be discretion to go above the legal minimum.
With the changes to contracts and with the current crisis, this is a very good time to make sure all your template contract documents are in order. Contracts are always shoved into the bottom drawer and forgotten about until things go wrong. When a parting takes place, whether instigated by one side or the other, poorly drafted contracts cause an inordinate amount of trouble and lost time and this is a good time to overhaul all your template contracts.
Please contact us for more information
Best Regards
Claire Vane
Integrated Resources