The third in a series of informative articles by Orazio Amantia, senior employee relations advisor
Further to the ECA Blog published on 22nd March 2019 with regards to the Government proposals under the ‘Good Work Plan’, please find below the third of a series of specific articles based on the said proposed changes.
Significant changes to the rules on written statements of terms and conditions of employment will take effect from 6 April 2020.
Written statements of employment terms and conditions are provided for by ss.1-7B of the Employment Rights Act 1996 (and are often referred to as "section 1 statements").
The right to a written statement applies only to employees (and not workers) with at least one month of continuous service. The statement must be given to employees within two months of their start date, even if they have left employment by that point.
Employers must provide certain information (for example the identity of the employer and employee, start date and information about pay and hours or work) in one document or "principal statement", while some terms (for example about sickness and pension benefits) can be provided in instalments.
Most information must be provided to the employee but for some terms (for example disciplinary and grievance procedures), employers can refer employees to another reasonably accessible document.
There are significant changes to the right to a written statement and to the contents of the statement itself. The changes take effect in relation to individuals starting work with an employer on or after 6 April 2020.
Changes to the right
The most significant change to affect employers is the extension of the right to a written statement to workers (rather than applying only to employees, as at present). This means that casual and zero hours workers will have the right to a written statement of terms and conditions.
Furthermore, the right will become a day-one right for employees and workers, who will have the right to receive most of the information about their terms in a single document no later than when they start work.
Employers will still have up to two months to provide information on certain limited terms (i.e. it will still be possible to provide some information in instalments and/or in another reasonably accessible document).
The new rules will require employers to provide additional information, not currently required.
Information employers will have to provide in the single "principal" document by the start of employment
The info employers will have to provide in the single "principal" document by the time the employee or worker starts employment, are as follows:
- the names of the employer and employee or worker;
- the date of commencement of employment;
- where the statement is being given to an employee (rather than a worker), the date when continuous employment began;
- the scale or rate of remuneration or the method of its calculation;
- the intervals at which remuneration is paid;
- terms relating to hours of work including any provisions relating to normal hours, with a new requirement to include:
- days of the week when the worker is required to work; and
- if and how working hours or days may be varied and how the variation will be determined;
- terms relating to holiday and accrued holiday pay including any entitlement to bank holidays and accrued holiday pay on termination of employment, in enough detail to enable precise calculation of the sums;
- terms relating to sickness and injury and sick pay (employers will still be able to refer employees to another reasonably accessible document as under the current rules, but will no longer be able to provide this information in instalments);
- terms relating to any other paid leave (a new requirement, i.e. maternity leave, paternity leave, etc. Employers will be able to refer employees to another reasonably accessible document);
- terms relating to any other benefits provided (a new requirement including non-contractual benefits);
- length of notice to be given by each party (this information will no longer be able to be provided in instalments, but employers will still be able to refer to the law or collective agreements);
- job title or brief job description;
- expected length of temporary employment or date fixed-term contract ends (this information will no longer be able to be provided in instalments);
- any probationary period, including conditions and its duration (a new requirement);
- place of work, or if there is none this must be indicated, and the address of the employer included;
- where the employee or worker is to work abroad for more than one month, the terms relating to working abroad, including the period of work outside the UK, the currency of remuneration while abroad, any additional remuneration and benefits and any terms relating to the employee or worker's return (this information will no longer be able to be provided in instalments); and
- any training provided by the employer which the employee or worker is required to complete and any other required training in respect of which the employer will not bear the cost. It should detail whether the training is mandatory and/or must be paid for by the employee or worker (a new requirement).
Information employers will be able to provide in instalments
Employers will be able to provide information on some employment terms in instalments, namely:
- terms relating to pensions schemes (as now - employers will still be able to refer employees and workers to another reasonably accessible document);
- collective agreements affecting the contract, if any (as now);
- details of any training that the employer will provide (a new requirement, although employers will be able to refer employees and workers to another reasonably accessible document); and
- a note about disciplinary and grievance rules and procedures (as now).
Employers must provide this information within two months of the employee or worker starting work, even if their employment ends before then.
Employers will be required to issue written statements conforming to the new requirements only in relation to employees and workers who start work with them on or after 6 April 2020. However, pre-existing employees who joined before that date will still be able to request a statement and the employer must provide one that complies with the new requirements, within one month.
This entitlement will apply only if the employee is still working for the employer or is within three months of their leaving date. Employees can make only one such request.
Further, if on or after 6 April 2020 there is a change to terms of a pre-existing employee that would have had to have been included in the new-style written statement, and the employee has not previously requested a new-style statement, the employer must provide the employee with a written statement of the change.
This widens the requirements around notification of changes to pre-existing employees and means that employers are not limited to having to provide details of changes only about the terms that were covered by the employee's old-style written statement. Instead, employers must include changes to terms that would have been in the employee's statement had they started on or after 6 April 2020.
What happens if employers fail to comply
As it is currently the case (the same rule will apply after the changes take effect in April 2020), if an employer fails to provide a proper written statement of employment particulars, individuals will be entitled to make a referral to an employment tribunal for a declaration of what their terms and conditions of employment are.
Having said that, Tribunals will only be able to award compensation for failure to provide a proper written statement of employment particulars, where an employee or a worker brings a separate, successful claim in an employment tribunal (therefore it will still be a tag along claim), with compensation assessed between two and four weeks’ pay (subject to a statutory cap, currently £525/week and due to increase slightly on 6 April 2020).
Although the penalty for breaching this requirement is quite small, costs might be significant if a high number of individuals bring claims as part of some other litigation.
- Ensure that all workers, including casual workers, receive a written statement.
- Provide a written statement from day-one of employment.
- Add new required information to written statements. When doing this, you should take care to ensure that these amendments do not convert non-contractual benefits (such as a discretionary bonus scheme or enhanced maternity pay) into contractual entitlements.
- Revise the principal statement document to include some information previously provided in instalments.
For more information about the implications of these changes and any other employment law issue, please do not hesitate to contact the Employee Relations Department.
Tel: 0207 313 4804