This Spring not only heralds the daffodils, but also a raft of new employment law legislation. Most of this legislation comes into force as part of the Good Work Plan and is designed to improve the employment rights of casual workers and those working in the gig economy.
Here is a run down of the key changes in force from 6 April 2020:
Employees and workers:
All workers (not just employees) will have a right to a written statement of terms on or before the first day of employment.
A written statement of terms will need to include additional information, including 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.
The reference period used to determine an average week’s pay (for the purposes of calculating holiday pay) will increase from 12 weeks to 52 weeks.
Known as Jack’s Law, all working parents will be entitled to two weeks’ paid statutory leave if they lose a child under the age of 18 (including a still birth after 24 weeks’ of pregnancy).
The “Swedish derogation” in the Agency Workers Regulations 2010 will be removed, thus no longer allowing employment businesses to pay agency workers less than comparable direct employees in certain circumstances. A statement must be given no later than 30 April 2020 to confirm these provisions no longer apply.
Agency work-seekers must be provided with a Key Information document, including information on the type of contract, the minimum expected rate of pay, how they will be paid and by whom.
Information and consultation
The threshold to request workplace information and consultation arrangements under the Information and Consultation of Employees Regulations 2004 will be lowered from 10% to 2% of employees, subject to the existing minimum of 15 employees.
Off-payroll working rules (IR35):
To address the issue of non-compliance with IR35 in the private sector, it is expected (but not yet confirmed) that the off-payroll working rules will be extended to large and medium-sized private companies. This means that any payments to workers supplying services to these size of companies via a personal service company will be treated as payments of employment income and so subject to income tax and National Insurance contributions. It will become the responsibility of the client or intermediary to pay the taxes rather than the personal service company.
Small companies are excluded from the new rules.
Taxation of termination payments
All termination payments over the sum of £30,000 will be subject to employer’s NICs (Class 1A). Employers will need to take this into account when costing up the value of settlement payments.
Key action points
- Review and update your written statement of terms and/or contracts of employment to incorporate the changes.
- Update your process for onboarding a new member of staff.
- Review and update your family friendly policies.
- Review and update your method of calculating holiday pay for workers with variable hours.
- Issue agency staff with a Key Information document and/or statement regarding removal of Swedish derogation.
There are further proposed changes on the horizon which include:
- the right for all workers to request a more predictable and stable contract after 26 weeks’ service;
- extension of redundancy protection to those employees who are pregnant and continuing until six months after their maternity leave has ended;
- making flexible working the default position;
- extension of the length of gap necessary to break employment from 1 week to 4 weeks;
- prevention of the misuse of confidentiality clauses or non-disclosure agreements in workplace harassment or discrimination complaints; and
- measures to address sexual harassment in the workplace.