2020-05-27
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Employment law update: contractual changes implemented from 6 April 2020

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Posted by Tina Chander on 27 May 2020

Tina Chander - Head of Employment Law
Tina Chander Partner - Head of Employment Law

With managing the impact of the Coronavirus pandemic taking a priority position on the agenda, understandably many employers have put the mandatory changes to contracts of employment implemented on 6 April 2020 on the back burner.

Employers have focused their attention on providing a safe working environment for employees if work could continue, or alternatively if this was not possible began the process of furloughing employees and ultimately perhaps even embarking on a redundancy exercise. However, now that there is a glimmer of light at the end of the tunnel and employers are starting to look at their long-term plans, please bear in mind the following contractual changes which must be implemented.

Written statement of particulars

Employees and now workers (including agency workers, casual workers and zero hours contract workers) must receive a written statement of employment particulars on or before their first day of engagement, this replaces the previous legislation which permitted the statement to be provided within two months of the start date. Therefore, before you take on any worker, you must ensure you have a standard statement prepared in order to not fall foul of this obligation.

Training clauses in contracts of employment

Since 6 April 2020, the written statements of particulars must contain any training entitlement provided by an employer, including whether any training is mandatory and/or must be paid for by the employee,

If your current contractual documentation does not contain such a clause, this requires immediate amendment. In addition, employers should consider implementing a Training Policy paired with a Training Agreement, which is issued to all employees prior to the commencement of a training course.  The idea is that this will permit the claw back by the employer of training costs paid for by an employer if the employee leaves their employment within a certain timeframe after the training course has been completed.

Privacy notice

The changes also specify that a Privacy Notice must be attached to each contract issued to an employee or worker. In short, a Privacy Notice provides information about how the employer will processes an employee or worker’s personal data.

It is a fundamental obligation under the General Data Protection Regulations (“GDPR”) that employers only process personal data in accordance with the data protection principles. It is therefore vital that a Data Protection Policy is in place and is operating in parallel to the Privacy Notice issued to all employees. Breaches of data protection legislation are taken very seriously, and fines are a headache an employer simply doesn’t need in this climate.

Short time working and short-term lay off clauses

One area that is not covered by the April changes, is short time working and short-term lay off clauses. However, employers should not disregard the importance of these clauses as their absence in many contracts caused havoc at the start of the Coronavirus pandemic prior to the Government having to step in by introducing the Furlough Scheme. A short-time working clause allows an employer to temporarily reduce an employee or worker’s hours of work and accordingly reduce their pay accordingly, without being deemed to be in breach of contract. Similarly, a short-term lay off clause allows employers to temporarily stand employees and workers down and not provide them with any work or pay without facing breach of contract and/or dismissal related claims. If these clauses are not in your contracts, the current pandemic has demonstrated why they should be!

Holiday pay calculations

Another change that came into effect from 6 April 2020 relates to the calculation of holiday pay. Where a worker’s pay varies each week, the reference period to be used to calculate average pay for holiday pay calculations has changed from being the 12 weeks preceding the holiday period to the 52 weeks preceding the holiday period. If the worker has less than 52 weeks’ service, their entirety of service should be used for the reference period.

Employers therefore need to ensure their Annual Leave Policy is updated and their payroll system is equipped to manage this change, otherwise they risk paying annual leave incorrectly, thus leaving the business exposed to claims.

What should you do now?

Despite the current pandemic, the changes brought into force in April still apply. Don’t get caught out by underplaying their significance. We urge you to check you have effectively responded to the additional requirements placed upon your business.  With a plan now in place from the Government on how the workforce will be slowly phased back to work, now is the ideal time to ensure your contractual documents and policies are compliant.

About the author

Tina Chander

Partner - Head of Employment Law

Tina is head of our employment law team. She deals with contentious and non-contentious employment law issues.

Tina Chander

Tina is head of our employment law team. She deals with contentious and non-contentious employment law issues.

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