What do UK Employers need to know?

Louise Skinner, employment partner in London at global law firm Morgan Lewis, gives an update to the required Statement of Employment Terms

Introduced as part of the reforms under the Good Work Plan issued in December 2018, amendments to the UK’s Employment Rights Act 1996 taking effect on 6 April 2020 will impose new obligations on employers in the provision of written statements of particulars of employment. Employers should review and update their standard employment contracts to ensure compliance with these new requirements.

Adopting many of the recommendations set out in the Taylor Review of 2017 the Good Work Plan sets out the UK government’s vision for the future of the UK labour market and how it will address the challenges and complexities facing the 21st century workforce.

As part of its plan, the UK government has identified the importance of providing individuals with clarity and transparency about their employment and, in particular, their employment rights so that they can make informed choices and fully understand the terms they are signing up to. In order to achieve this goal, the Good Work Plan introduces reforms to Section 1 of the Employment Rights Act 1996 (ERA).

Currently, employees engaged for more than one month are entitled to a written statement setting out the key terms and conditions of their employment (Section 1 Statement), to be provided within two months of commencement of employment. Employees can bring an employment tribunal claim against their employer for a failure to provide a Section 1 Statement, with compensation available in certain circumstances.

What is changing?

Under the new rules, a number of changes will come into effect, perhaps most notably that in addition to employees, any “workers” engaged by the employer will be entitled to a Section 1 Statement. This is the first time that a legislative requirement has been introduced to supply workers with written terms. Additional obligations relate to the requirement to provide the Section 1 statement on or before the employee or worker’s first day of work, and various additional information on the particulars of employment relating to matters including training and paid leave entitlements.

These changes will require employers to consider the employment status of employee or worker (or self-employed) during the recruitment process. Employers should implement an assessment process in advance of the go-live date in April.

Since employers will be under an obligation to provide workers with a Section 1 Statement on or before the first day of their employment, those firms engaging new workers and/or employees will need to ensure that they have updated their employment contract templates by 6 April 2020.

Existing employees

In terms of existing employees, the new rules will not apply retrospectively, so employers will not be required to roll out amended contracts to their current workforce. However, the changes give existing workers the right to request a Section 1 Statement that contains the new information at any time up to three months after the end of their employment. Upon receipt of such a request, employers will have one month to provide a Section 1 Statement that complies with the new rules.

Employers should also note that, where a worker has not requested a Section 1 Statement after 6 April 2020, but the employer wishes to amend a term in a worker’s employment contract (including any of the additional terms now required), the employer must inform the employee in writing of the change. Based on current practice, it is likely that employers will be doing this in any event. However, employers should design and implement an internal procedure in order to deal with employee requests and changes to employment terms in a consistent and orderly manner.

It should also be noted that, to the extent an employer relies on agencies for the provision of staff and such agencies employ individuals directly and supply them to the employer, it will be the responsibility of the agency to replicate the new changes in their employment contracts going forward. Nonetheless, employers may wish to approach agencies to ensure they are taking action.

This article is provided as a general informational service and it should not be construed as imparting legal advice on any specific matter.

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