Changes in the law regarding employment rights will come into force on 6 April 2020, so it’s vital that HR teams prepare well in advance.

After the flurry of announcements at the end of last year about the outcome of the Taylor Review, the Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018 (SI 2018/1378) have been made, and two sets of draft regulations have been published, implementing aspects of the government’s Good Work Plan.

These regulations, which come into force on 6 April 2020, change the existing law to ensure that a written statement of terms (a ‘contract’) must be given on or before the first day of employment, rather than within two months of the start date. 

The regulations also amend the Working Time Regulations 1998 to increase the reference period for determining an average week’s pay (for the purposes of calculating holiday pay) from 12 weeks to 52 weeks, or the number of complete weeks for which the worker has been employed.  This means that those whose work intensity fluctuates during the year will receive holiday pay which more accurately reflects their usual pay.

The announcement of greater rights for those operating in the gig economy will be welcomed by the 1.1 million workers in this sector.

The draft Agency Workers (Amendment) Regulations 2019, which are also due to come into force on 6 April 2020, amend the Agency Workers Regulations 2010 to remove the “Swedish Derogation” which allows employment businesses to avoid giving agency workers’ pay parity with comparable direct recruits if they have an employment contract that gives them a right to pay between assignments.

The announcement of greater rights for those operating in the gig economy will be welcomed by the 1.1 million workers in this sector and will go some way to addressing the concerns about poor working conditions for this group.  We await more detail however on the raft of reforms due to be implemented before April next year to include the following:

• New rights to itemised payslips for all workers will come into force on 6 April 2019 to include clear information about hours paid on an hourly rate.
• A right to request a more stable and predictable contract for workers who may be kept on insecure zero-hours contracts for long periods.
• It will become easier for casual staff to establish continuity of employment as the government intends to extend the period of time in between contracts which breaks continuity from one week to four weeks.  This will give a wider group of employees’ rights against unfair dismissal and the ability to make flexible working requests.
• Agency workers: abolition of Swedish Derogation meaning parity of pay when compared with directly recruited comparators.
• Ban on deductions from staff tips to cover employer ‘admin’ charges.
• Employment status tests to be refined after further research; online employment status tool to be developed.  There is little clarity as to how the current tests to determine status will be changed or improved: this is awaited with interest.
• There will be a right to an improved written statement of terms for all workers, from day one; “key facts” statement for agency workers.  Employers will be required to provide additional information in the written statement, to include information on the length of time a job is expected to last, the notice period, eligibility for sick leave and pay, other rights to leave, any probationary period, all pay and benefits, and specific days and times of work.
• Reference period for holiday pay to be 52 weeks rather than 12.

What’s next for HR?

In light of the proposed changes, HR professionals will need to consider the following steps to ensure that their organisations are prepared for the changes some of which will take place from April this year.

• Check that payroll providers will be in a position to provide compliant payslip information for those on an hourly rate and that the systems are able to calculate holiday over the correct reference period (either full period worked or 52 weeks where work is irregular).
• Carry out a full review of contracts and recruitment and on-boarding processes to ensure that they comply with the new rules on contract content and that all hiring managers and HR staff are aware that contracts must be provided on or before day one of employment. Tip: consider implementing this in advance of April 2020.
• Review historical use of casual staff and note breaks between employment for continuity purposes.  Consider future use of such contracts for the coming 12-24 months and the impact of such staff gaining full continuity and the rights which attach to that status.
• Consider use of agency workers and ensure that agency business providers are contractually committed to complying with the new rules on abolition of Swedish Derogation and parity of pay.
• For those in the relevant sector, review the administration of staff tips and phase out any soon to be unlawful deductions.
• Review use of self-employed contractors.  This is likely to require support from an employment law specialist given the various court and tribunal decisions in this area and the forthcoming Supreme Court appeal.

Preparation is key

A recent tribunal case (Stefanko & Ors v Maritime Hotel Ltd) ruled that employees who have worked for one month have a right to a written statement of particulars under s1 ERA 1996 where their employment did not last for two months. 

Employers should therefore consider implementing the new rules about providing contracts in advance of April 2020 given the rights of employees to claim compensation for a failure to do so.

There are always arguments for a January housekeeping review but with these changes just around the corner and the recent tribunal decisions, your businesses will be thankful that you have scanned the horizon to ensure compliance and best practice for the coming year and beyond.