Changes to employment law in April 2020: what employers should know
Employers across the UK are naturally preoccupied with the COVID-19 outbreak at present.
However, before this crisis began, key employment law changes were announced in response to the government’s Good Work Plan and the 2017 Taylor Review, which came into effect on 6 April 2020 and could easily be overlooked amidst the pandemic-related noise.
Changes to section 1 statements
For employees starting work on or after 6 April 2020, the information an employer must provide under section 1 of the Employment Rights Act 1996 (“ERA”), which is generally given in the form of an employment contract, must now include:
- How many working days of the week the employee is required to work, whether the working hours are variable and how any variation will be determined;
- any other forms of paid leave the employee is entitled to;
- any probationary period the employee will be subject to;
- any other benefits provided by the employer that are not already included in the statement; and
- any training the employee is entitled to or is required to complete, whether or not this is paid for and/or provided by the employer.
In addition, the obligation on employers to provide section 1 statements has been extended to workers and the statement (or contract) must also be provided to the individual on or before the individual’s start date.
Although the remedy for non-compliance is weak - as employees cannot bring a standalone claim and the maximum penalty is capped at four weeks’ pay (currently £2,100) - employers still ought to be cautious and incorporate these changes into their template contracts. Yet in the current economic climate, it remains to be seen whether employers will prioritise these changes over operationally critical matters.
Calculating holiday pay
The holiday pay of workers with irregular working hours is currently calculated by averaging their hours over the previous 12 weeks. However, from 6 April 2020, this pay reference period has been extended to 52 weeks in order to avoid workers losing out where their hours vary, for example, due to seasonal fluctuations.
Parental bereavement leave
The government has introduced parental bereavement leave which entitles employees to two weeks of leave (and statutory pay depending on length of service) if they are the parent of a child who dies under the age of 18 or if they suffer a stillbirth after 24 weeks of pregnancy. Parents can take this leave as two continuous weeks or as two separate weeks within a 56-week period following the child’s death or stillbirth.
Increase in statutory payment and tribunal award limits
Statutory sick pay (SSP) has increased to £95.85 per week and the prescribed rate for statutory maternity pay, adoption pay, paternity pay and shared parental pay has also increased to £151.20 per week. The cap on compensatory awards for unfair dismissal claims has risen to £88,519.
Minimum wage increase
The above changes are accompanied by the usual national living wage increase from 1 April to £8.72 per hour (up 6.2%). The new national minimum wages for other age groups are: £8.20 for 21 to 24-year-olds, £6.45 for 18 to 20-year-olds, £4.55 for under 18s and £4.15 for apprentices.
What should you do now?
Employers should check that lower paid workers do not fall below the relevant national living/minimum wage rate and review and update contracts to ensure compliance with section 1 of the ERA as soon as possible so that they are in a position to issue updated contracts to new starters.
Hollie Ryan is senior associate at Stevens & Bolton