The Good Work Plan changes coming in to force in April 2020: are your employee contracts compliant?

Louise Walker
Legal Director
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In our last update we advised that, from 6 April 2020, the framework for providing a Statement of Initial Employment Particulars and the content contained within the same, as required under Section 1 of the Employment Rights Act 1996, would be changing as a result of the Good Work Plan.

We explained that under the new framework, the information required to be included in the statement would increase. This JEL analysis explains the information which is currently to be provided in law, and then outlines the additional information which will need to be provided when the changes come in to force from 6 April 2020.

What’s the current legal position?

Under the current framework, the following information must be given within the first two months of employment.

A. This information must currently be given in a single document (the “Section 1 Statement”):

• the names of the employer and employee;
• the date employment began;
• the date on which the employee’s period of continuous employment began (taking into account any employment with a previous employer which counts towards that period);
• the scale or rate of remuneration or the method of calculating remuneration;
• the intervals at which remuneration is paid (weekly, monthly etc.);
• any terms and conditions relating to hours of work (including any terms and conditions relating to normal working hours);
• any terms and conditions relating to entitlement to holidays, including public holidays, and holiday pay (the particulars given being sufficient to enable the employee’s entitlement, including any entitlement to accrued holiday pay on the termination of employment, to be precisely calculated);
• the title of the job which the employee is employed to do or a brief description of the work for which he is employed; and
• either the place of work or, where the employee is required or permitted to work at various places, an indication of that and of the address of the employer.

B. This information can be provided in instalments:

• any terms and conditions relating to incapacity for work due to sickness or injury, including any provision for sick pay, and pensions and pension schemes, (the employee can be referred to a separate policy document);
• the length of notice which the employee is obliged to give and entitled to receive to terminate his contract of employment;
• where the employment is not intended to be permanent, the period for which it is expected to continue or, if it is for a fixed term, the date when it is to end;
• any collective agreements which directly affect the terms and conditions of the employment including, where the employer is not a party, the persons by whom they were made; and
• where the employee is required to work outside the United Kingdom for a period of more than one month, specified information about that requirement is to be provided.

What’s changing?

In addition to the information required under sections ‘A’ and ‘B’ above, from 6 April 2020, the following information must also be provided, much of which is due to be provided prior to commencement of employment:

• any terms and conditions relating to hours of work, including any terms and conditions relating to –
• normal working hours
• the days of the week the worker is required to work
• 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 terms and conditions relating to any other paid leave (other than holidays or time off due to sickness or injury);
• any other benefits provided by the employer that do not fall within the other categories;
• 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.

All the above information will require to be provided in the Section 1 Statement prior to the commencement of employment, except for the following, which can be provided in instalments within the first two months:

• information on pensions and pension schemes
• information on collective agreements
• training entitlements provided by the employer

So, what does this mean for you?

Q. Do you need to issue new contracts to staff as a result of these changes?

No, but please see our response to the question below, “How do I deal with an existing employee whose contract doesn’t contain all the new information?”

Q. Do you need to update your template contracts for use going forwards in the future?

Yes. As noted above, as of 6 April 2020, your template contracts will need to be updated to reflect the following:

1. If you use a probationary period, you will need to include a clause setting out the conditions which will apply during it, including the duration;
2. If an employee is required to work outside the UK for a continuous period of more than one month, any related terms must be clearly set out in the Section 1 Statement;
3. Sufficient detail in relation to the employee’s hours of work will need to be provided and, for your variable hours workers (where relevant), consideration will need to be given to how the variation is determined and this will be need to be set out clearly;
4. Details of all forms of paid leave (not just holiday/sick leave) should be provided in the Section 1 Statement. This would include, for example, brief details of any enhanced family friendly paid leave. Such information could be provided in the form of an appendix to the main terms. You can then go on to signpost the employee to the relevant policy (for example, maternity leave) for further information as to the rules which will apply, eligibility criteria etc;
5. Details of all remuneration (not just pay) should be provided. This would include contributions in cash or kind for example, vouchers and lunch. It is important to note that this obligation will likely cover contractual and non-contractual benefits. In which case, it will be important to make it clear within the contract, where certain benefits are non-contractual, that this is the case and that they may be changed or withdrawn at any time. This information must be provided within the Section 1 Statement.
6. Finally, details to be provided of (1) any training entitlement provided by the employer, including (2) any training the worker is required to complete and (3) any other training which the worker is required to complete and for which the employer will not cover the cost. Our view at this stage is that such information could be detailed in an appendix to the Section 1 Statement. This change is likely to cover mandatory training such as, for example, regulatory training in the financial sector or health and safety training in the construction industry. Whilst the first element is not required to be included in the Section 1 Statement, the second and third are and, in the interests of making sure nothing is missed, it makes sense to include all the information regarding training in the Section 1 Statement.

Q. How do you deal with an existing employee whose contract/written terms and conditions doesn’t contain all the new information?

You should prepare and issue a letter to employees containing a statement of changes which sets out all the relevant information referred to above, in so far as not covered already. This statement must be issued as soon as possible and, in any event, not later than one month after the changes in question are introduced.

If you would like to discuss any of the above changes or proposals, or you require support or advice on any employment law matters, please do not hesitate to contact the team on 0141 331 5150.

Topics: Contract Of Employment