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Good Work Plan & Employment Law Update April 2020

Tracy Carpenter: Human Resources Consultant: 24th February 2020

 After much discussion about the changing nature of the UK labour market in the last 10 years, the Government commissioned Matthew Taylor to take a long, detailed look into matters - particularly with regards to the growth of new forms of working, such as the use of zero hours contracts and agency workers hired by umbrella companies. The result of his report is the Government's Good Work Plan, which is going to create a raft of new rights for employees and regulations for employers to be aware of.

Statement of terms

Employers used to have 8 weeks to provide these. From April 2020 it will be a right from day 1 for employees and workers. I'll be publishing a separate blog on IR35 shortly, because I know a lot of you are concerned about this. My advice would be to send out terms as soon as you can.

A contract must contain the following additional information about the terms and conditions of employment:

  • Normal working hours, including the times of the week when the employee/work er is required to work, whether these hours or days may be variable and, is so, how they may vary.
  • Any benefits other than pay that the employee/worker is entitled to, including non-monetary benefits such as vouchers or meals.
  • Any probationary period, including the duration and any conditions.
  • Sick pay entitlement.
  • Details of any other paid leave, such as maternity leave and paternity leave over and above holiday entitlement.
  • Any training to be provided and details of any mandatory training that the employee/worker must complete.
  • Reference to disciplinary and grievance procedures (not the full policy though).

Existing employees/workers who have contracts prepared before 6 April 2020 will be entitled to request a new-version contract, which you would be required to provide within one month of the request.

Change of terms letter

Some of my clients are good at this, some not so. There is going to be a greater responsibility on employers to confirm revisions to terms and conditions I call this a change of terms letter. As an example, this includes:

  • Pay which will include salary sacrifice i.e. pension contributions as this is an amendment to pay.
  • Hours of work
  • Location

Parental bereavement leave and Pay Act 2018

This is a guaranteed right for parents to receive 2 weeks paid leave if they lose a child under the age of 18 or suffer a still birth from 24 weeks of pregnancy.

The following applies:

  • A statutory payment of 148.86 per week
  • Must have worked for employer for at least 26 weeks to be eligible for paid leave
  • Can be taken in a two-week block or as two separate weeks within the 56 weeks following the passing of their child. 

Swedish derogation

The Swedish derogation is shorthand for a special type of employment contract - its official name is a "pay between assignments" contract.  These contracts entitle agency workers to receive pay when they are not assigned to an end-user but exempt them from equal treatment to pay when they reach 12 weeks' service. 

From April 2020 the opt out provisions will be removed meaning that all agency workers will:

  • Have to a right to receive a key facts statement setting out their terms of engagement.
  • Be entitled to equal pay after 12 weeks service within one assignment.

The agency supplier should be sorting all this out for you but its worth checking.  Also it may mean that your costs for agency workers go up. 

National Minimum and Living Wage increases

This is the biggest percentage increase there has been in a while.

Age

Rate from April 2020 (per hour)

Current rate (per hour)

Workers aged 25 and over (National Living Wage)

8.72

8.21

Workers aged 21 and over

8.20

7.70

Workers aged 18-20

6.45

6.15

Workers aged 16-17

4.55

4.35

Apprentices under 19, or over 19 for their first year of the apprenticeship

4.15

3.90

Increase in statutory rates

 

Rate from April 2020 (per week)

Current rate (per week)

Statutory maternity and statutory adoption pay 151.20 from April 2020. The increase normally occurs on the first Sunday in April, which in 2020 is 5 April 148.68, or 90% of the employees average weekly earnings if this figure is less than the statutory rate
Statutory paternity pay and statutory shared parental pay 151.20 (or 90% of the employees average weekly earnings if this figure is less than the statutory rate) 148.68
Statutory sick pay 95.85 on 6 April 2020 94.25

Holiday pay calculations

Just when you thought this couldnt get any more complicated, it has. Previously, when calculating how much to pay someone for holiday accrual you had to look back over the previous 12 weeks earnings. From April, this will change to:

  • The previous 52 weeks
  • If the individual doesnt receive a normal salary for a week, then you will have to go back 53 weeks. This applies up to a maximum of 2 years (104 weeks).
  • If the individual has not been employed for 52 weeks then you just need to look at the whole period they have been with you.

Please remember that when looking at normal salary, you need to include what is' regular'. Even an annual bonus payment will be classed as regular if its paid every year. You will need to consider if you need to include:

  • Overtime voluntary and compulsory
  • Commission
  • Bonuses

Flexible working options

There is an expectation going forward that when advertising roles employers include the availability of flexible working options. So, for example, adding to adverts that flexible options will be considered depending on the circumstances. A change will need to be made to your recruitment policies.

Pre-settled status/settled status

Pre-settled status is for EU citizens and family who have not lived in the UK for five years on December 31, 2020. They can continue to live in Britain until they reach the five years, then apply to change their pre-settled to settled status for no fee.

The deadline for applications is June 2021 but this may change. The advice is therefore for EU nationals to apply as soon as they can just in case this is brought forward.

Employment allowance

The Employment Allowance (EA) has since April 2014 entitled employers to a maximum of 3,000 off their annual secondary Class 1 NIC bill.

From April any business with a combined (group) employer NI contribution of over 100,000 per year will no longer be eligible for the 3000 allowance.

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