Upcoming changes to Employment Law April 2020

Date Added 31.01.20

April is approaching and with it, come new changes to Employment Law. As well as the proposed usual annual increases to minimum wage, statutory sick pay and statutory family pay, there a number of additional changes to Employment Law, which are coming into force on 6th April this year. It is therefore advisable for employers to spend some time now reviewing the upcoming changes in addition to their current practices, to ensure that they will continue to be compliant come April.

Employment Contracts:

The first change relates to the requirement to supply employees with a statement of their main terms and conditions of employment. Currently, employers have two months to provide the statement to new employees; from April, the statement will have to be provided to not only all new employees, but also all new workers, by their first day of working at the latest. Additional information will need to be included in the statement of terms, which can currently be placed in a separate document.

Agency Workers:

There are also several key changes relating to agency workers. Firstly, the “Swedish Derogation”, a mechanism by which recruitment agencies can pay workers less between assignments than they would earn where they were working an assignment for the client, is being abolished as of 6th April 2020. Any worker whose contract contains a provision allowing this practice will need to be contacted by their recruitment agency by 30th April and told that the provision no longer applies. Agency workers engaged by Temporary Work Agencies should be given a Key Information Document which provides them with information on the type of contract they are on, the rate of pay, the method of payment and by whom they will be paid.

Consultation Rights:

There will also be a lowering of the threshold for employee consultations. Broadly speaking, at present where either 10% of employees or 15 employees (whichever is greater) request that they are consulted on an economic matter or that they be party to negotiations with their employer, the employer will need to set up a consultation agreement and go through a formal process. From April, the required number of employees will fall to 2% or 15 employees, whichever is greater.

Holiday Pay:

A further change will arise in respect to holiday pay calculations. In order to calculate the amount of holiday pay an employee or worker will receive, an employer will usually take the earnings over the past 12 weeks of work and calculate the average earnings over that period. In order to reduce the unfair bias that exists against seasonal workers, the reference period will soon be 52 weeks. This will be more applicable to those employees and workers who work variable hours.

Bereavement Leave:

Additionally, draft Regulations have been produced which introduce a new form of family leave for parents whose child sadly passes away before their eighteenth birthday. This includes children who are stillborn after 24 weeks. Though the Regulations have not yet been enacted, the draft indicates that parents will be entitled to up to two weeks of paid leave at the statutory rates in force at the time, such leave to be taken within 56 weeks of the date of the child’s death.

Taxation of Ex Gratia Payments under Settlement Agreements:

Finally, there will be a few changes to taxation. Firstly, soon all termination payments above £30,000 will be subject to PAYE and National Insurance. Furthermore, the IR35 taxation rules regarding self-employed persons working in the private sector is due to change to reflect the rules currently operating in the public sector.

As you can see, there are multiple changes coming into effect which means this year shall be no less eventful than the last few. This does not take into account the current situation with Brexit, which we hope to have more information on soon.

For advice on how the changes outlined above will affect your business, or help in drafting compliant statements of terms and policies, the talk to Tollers and contact Rebecca List on 01604 258558 or rebecca.list@tollers.co.uk. We’re here for you.

Offices mentioned: Northampton Office

People mentioned: Rebecca List

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