Key changes in Employment Law happening in April 2020
6th April 2020
Key changes in Employment Law happening in April 2020
Some of the upcoming changes in Employment Law have resulted from the Government’s Good Work Plan, which was published in December 2018 and has been described as the Government’s “vision for the future of the UK labour market”. We have detailed below some of the changes which we are expecting in April 2020 and how employers can begin to prepare for these changes.
The key message is to review your contracts and ensure they reflect the working practices taking place. It is also crucial that businesses look at all their working relationships and ensure that all parties are aware of their status.
Holiday pay
In the Good Work Plan the Government made a commitment to improving the holiday pay arrangements for seasonal workers. To achieve this, the reference period for determining an average week’s pay will increase from 12 weeks to 52 weeks, or if the worker has been employed for less than 52 weeks, the number of complete weeks for which the worker has been engaged.
Parental Bereavement Leave and Pay
The Parental Bereavement Leave and Pay Act 2018 has now been passed by Royal Assent and is expected to come into force in April.
It will give all employed parents the right to two weeks' leave if they lose a child under the age of 18, or suffer a stillbirth from 24 weeks of pregnancy. Parents will also be able to claim pay for this period, subject to meeting eligibility criteria.
Employers should review their organisation’s policies and procedures now to ensure that they include time off for bereaved parents. Organisations will need to communicate these policy changes as soon as possible, ideally by 3rd April 2020.
Changes to written statements of employment particulars
All workers employed on or after 6th April 2020 will be entitled to a written statement of employment particulars. This now covers not only employees, but all workers.
Employees and workers must be provided with their written statement on or before their first day of employment.
This is now a day one right which is a significant change.
There is additional information that written statements will need to contain, including:
- All remuneration (not just pay) e.g. vouchers, lunch, health insurance
- The normal working hours, the days of the week the worker is required to work, and whether or not such hours or days may be variable, and if they may be how they vary or how that variation is to be determined
- Any other benefits not covered elsewhere in the written statement
- How long a job is expected to last, or the end date of a fixed-term contract
- How much notice the employer and worker are required to give to terminate the agreement
- Details of eligibility for sick leave and pay
- Details of other types of paid leave e.g. maternity leave and paternity leave
- The duration and conditions of any probationary period
- Any training entitlement provided by the employer, any part of that training entitlement which the employer requires the worker to complete, and any other training which the employer requires the worker to complete and which the employer will not bear the cost.
Changes to agency workers ' rights
There are three important changes to agency workers' rights which will apply from April 6th 2020:
- Abolition of the Swedish Derogation (sometimes referred to as 'pay between assignments' contracts). Previously agency workers could agree a contract which would remove their right to equal pay with permanent counterparts after 12 weeks working at the same assignment. From 6thApril 2020, these contracts will no longer be permissible, and all agency workers, after 12 weeks, will be entitled to the same rate of pay as their permanent counterparts.
- All agency workers will be entitled to a key information document that more clearly sets out their employment relationships and terms and conditions with their agency.
- Agency workers who are considered to be employees will be protected from unfair dismissal or suffering a detriment if the reasons are related to asserting rights associated with The Agency Worker Regulations.
Changes to ICE (Information and Consultation of Employees) Regulations
From 6th April 2020, there will be a reduction in the percentage of employees required to make a valid request for an agreement on the sharing of information and consultation within the workplace. Currently it is at least 10% of the workforce who must put in a request before an employer is obliged to take steps to comply with this right. This percentage will be reduced to 2%. The requirement that at least 15 employees make the request will remain.
Changes to holiday pay calculations
From 6th April 2020, the reference period to calculate a 'week's pay' for holiday pay purposes will be extended from the previous 12 weeks of work to the previous 52 weeks.
Off-payroll working rules (IR35)
In order to address non-compliance with IR35 in the private sector, the Government confirmed at the Autumn 2018 Budget that the off-payroll working rules would be extended to the private sector from 6th April 2020, but that small entities would be excluded from the scope of the new rules.
The IR35 rules prevent contractors working through Personal Service Companies (PCS), and performing similar roles to employees, paying less tax and NICs than if they were permanently employed by the client organisation. When the rules were introduced in 2000, contractors themselves assessed whether IR35 applied to them. In April 2017, responsibility for deciding whether contractors’ working in the public sector were caught by IR35 switched to their employers, and those organisations also became liable for deducting the right amount of tax and NICs from fees paid to the contractors’ PSCs.
From 6 April 2021, this responsibility applies to all private sector employers that in a tax year have:
- More than 50 employees
- An annual turnover over £10.2 million
- A balance sheet worth over £5.1 million
HMRC published guidance on the new rules, Prepare for changes to the off-payroll working rules (IR35), and draft regulations and a further consultation in 11th July 2019.
Tax on termination payments
From 6th April 2020, termination payments over the sum of £30,000 become subject to employer NICs. This change was delayed from April 2018**.**
If you have any questions please contact Hannah Dowd on the details provided below
Hannah Dowd
Hannah joined MSB in 2019, bringing with her a broad range of experience in commercial and high street practice. She is a highly skilled Solicitor covering all areas of Employment. Her specialisms include negotiating settlements for claimants when they have left their role or are looking to leave their role.
