Statutory employment law changes to watch out for in 2020

In addition to the employment and Brexit legislation announced in the Queens Speech, outlined here, 2020 is set to be a busy year for employment law changes, with some key developments outlined below.

A Right to a Written Statement of Terms

From the 6 April 2020 the Employment Rights Act 1996 (‘ERA’) will be amended to provide that a written statement of terms must be given on or before the first day of employment rather than within 2 months, as is the current position.

The information to be provided in the written statement has also increased, to include details of sick leave, sick pay and the required notice period. Significantly, a written statement of terms will also need to be provided to workers as well as employees from the 6 April 2020.

Agency Workers

From the 6 April 2020, the exemption to the rule that agency workers will receive the same pay and working conditions as employees after 12 weeks continuous service, known as the ‘Swedish derogation’ will be removed. Under this exemption, employers can avoid pay parity between agency workers and employees if certain conditions are met.

Any agency worker whose contract contains a Swedish derogation provision must be informed by the 30 April 2020 that this provision no longer applies. Additionally, agency work seekers must be provided with a Key Information Document, including details such as the minimum expected rate of pay, also from the 6 April 2020.

Tax and IR35 Rules

From 6 April 2020, reforms to the IR35 Rules shift the responsibility for IR35 tax compliance from the personal service company to the client or intermediary. Large and medium sized businesses will therefore be responsible for assessing the employment status of any workers who provide services to them. In the event that the rules apply the party who pays for the individual’s services will then be responsible for deducting tax and other payments at source.

Parental Bereavement

The Parental Bereavement (Leave and Pay) Act 2018 received Royal Assent on 13 September 2018 and is expected to come into force in April 2020. The Act will give all employed parents who lose a child under the age of 18, or suffer a stillbirth from 24 weeks of pregnancy, a right to two weeks' leave and statutory parental bereavement pay, if they meet the eligibility criteria.

Reference Period for Calculating Holiday Pay

On the 6 April 2020, the Working Time Regulation 1998 will be amended to increase the reference period for determining an average week’s pay when calculating holiday pay, from 12 to 52 weeks. If the worker has been employed for less than 52 weeks, the number of complete weeks for which the worker has been engaged will be the relevant calculation.

Implications for Employers

In light of the above developments, it is important to ensure all policies, procedures and practices relating to your employees are in line with current employment law requirements. Employers should consider whether any employees or workers are affected by any of the above reforms and review their current practices if they are not compliant. Such reviews should include amending any contracts to ensure they include all required information and reflect working practices and ensuring individuals are aware of their employment status.