Aside from IR35, a number of pieces of other legislation will come into force in April this year, including changes to contracts of employment and holiday pay.
Announced in December 2018, the Government’s Good Work Plan promised to introduce a number of legislative changes to increase transparency and strengthen rights for workers in less secure employment, such as ‘zero hour’ workers.
While the Government heralded it as the biggest reform of employment law in 20 years,
the changes are relatively modest in scope – increasing awareness of existing rights, rather than creating substantive new rights. Nevertheless, employers will need to prepare for these changes in good time.
Here is a summary of the main changes of significance for SME employers:
Changes to the right to receive a written statement of main terms and conditions of employment will apply from 6 April 2020 for new recruits from that date (existing employees may request an amended statement to incorporate the changes).
This statement is usually provided by employers in the form of an employment contract. Employers currently have two months to provide it to a new employee; this grace period
will be removed, meaning employers will have to give the written statement to the employee no later than the commencement date of employment.
In addition, more details will have to be included in the written statement of terms and conditions, as follows:
Employers will have to provide a written statement to their ‘workers’, including ‘zero hours workers’, as well as their employees. Currently, only employees are entitled to this document.
The mandatory reference period for calculating holiday pay will increase for staff with variable pay. From 6 April 2020, employers must use a reference period of 52 weeks (instead of the current 12 weeks) when calculating holiday pay for staff whose pay varies, including ‘zero hours’ workers.
This will result in a payment that balances out any peaks and troughs of working hours throughout the year.
This is expected to come into effect in April 2020. Bereaved parents will have the right to two weeks of leave and statutory pay following the loss of a child under 18, or a stillbirth after 24 weeks of pregnancy.
National Minimum Wage and statutory rate increases In the normal course of events, the
Government announces the increase to the National Minimum Wage rate (in response to the recommendations by the Low Pay Commission) by the end of October each year, with the increase to take effect in April.
However, due to the cancelling of the budget in November 2019 and the general election
in December, the increases have not yet been announced at the time of writing.
Employer right to work checks for EU workers
Right to work checks for EU, EEA and Swiss citizens will not change until at least 1 January 2021. Until then, in respect of employees employed prior to January 2021, the current right to work checks continue to apply.
For the purposes of these checks, employers are not required to distinguish between EU workers arriving in the UK prior to 2021 and those that arrived before the UK leaving the EU.
The future of workers’ rights post-Brexit While many UK worker rights derive from European directives, it is unlikely that a UK Government would look to fundamentally weaken worker rights. The Government has agreed a commitment to the non-regression of workers’ rights in any future UK-EU relationship, at least in respect of any primary legislation passed by Parliament, although in the long-term we may see a divergence between future EU law and UK legislation.
You can get more advice and guidance on the FSB Legal hub at fsb.org.uk