As part of the reforms introduced under the United Kingdom’s Good Work Plan, amendments to Section 1 of the Employment Rights Act 1996 (ERA) will impose a number of new obligations on employers in relation to written statements of particulars of employment. These changes will come into force on 6 April 2020. As such, employers may want to review and update their standard employment contracts to ensure compliance with the requirements.
The Current Position Under Section 1 of the ERA
In accordance with Section 1 of the ERA, an employee who is engaged for more than one month is entitled to a written statement that sets out the key terms and conditions of his or her employment. The ERA currently requires an employer to provide this written statement to the employee “not later than two months after the beginning of the employment.”
The ERA further requires that an employer provide the employee with certain key information (such as the names of the parties, the employee’s pay, job title, place of work, and working hours) in a single document. Other information (for example, disciplinary and grievance procedures, and benefits) can be provided in a supplementary statement.
The most widely used approach by employers is to provide employees with a contract of employment, which essentially serves the purpose of the written statement.
The New Position Under Section 1 of the ERA
With effect from 6 April 2020, the key changes to the written statement are as follows:
- All employees and workers (for example, casual workers with no fixed hours) should be provided with written statements. The current position is that only employees are entitled to receive written statements.
- The right to receive a written statement will become a “day one” right, meaning the employer will be required to provide the written statement to the employee or worker before or on the day that the employment or engagement commences. As it currently stands, this right only arises once an employee has been engaged for one month.
Written statements will now need to provide additional information, including:
- the days of the week on which the employee or worker is required to work, whether the days and working hours may be variable, and how any variation will be determined;
- any probationary period which starts at the beginning of the engagement, including conditions and duration;
- any benefits provided by the employer (including non-contractual benefits); and
- any part of any training entitlement that the employer requires the employee to complete, including any training that the employer requires but does not pay for.
An employer can choose to include further information in a reasonably accessible document or supplemental statement, provided that it is referred to in the written statement, including the particulars of any training provided by the employer and the particulars of any other paid leave (other than provisions relating to holiday and sick pay).
In addition, the employer can provide the following information within two months of the commencement of the employee or worker’s start date:
- details of pensions and pension schemes;
- details of any collective agreements directly affecting the terms of the engagement; and
- any other training entitlement.
The changes affecting written statements will not apply retrospectively; therefore, an employer will not be required to provide amended and updated employment contracts to its existing workers. However, it is worth noting that these changes give existing workers the right to request written statements containing the new additional information at any time for up to three months after the end of their employment. Upon receipt of such a request, employers will have one month to provide a written statement that is compliant with the new rules.
Failure to Comply With the New Rules
Employees and workers will not be able to bring a stand-alone claim for an employer’s failure to provide a written statement. However if an employee or worker brings a separate claim in the employment tribunal, and is able to demonstrate that the employer failed to provide a compliant written statement, the employee or worker may be awarded additional compensation of two to four weeks’ pay (currently capped at £525 per week).
What Can Employers Do to Prepare for These Changes?
Employers seeking to comply with the new obligations may want to consider the following:
- ensuring that onboarding processes involve employment contracts (or alternative forms of the written statement) being issued on or before the first day of employment;
- reviewing and updating current employment contracts to include the new additional information in readiness for 6 April 2020 and reviewing other policies or handbooks to avoid inconsistency;
- ensuring that other information will be provided either in a reasonably accessible document (such as on the intranet) or in a supplementary statement.