Changes in U.K. Employment Law – Are you ready for April 2020?
March 12, 2020, Covington Alert
April is often the month when new U.K. employment law comes into effect. In 2020, there are more changes than in recent years and we are already working with many clients to prepare for these.
The changes include:
(1) Parental Bereavement Leave
What’s changing: Under changes coming into force on 6 April 2020 as a result of the Parental Bereavement (Leave and Pay) Act 2018, employees who lose a child under the age of 18, or suffer a stillbirth after the 24th week of pregnancy, will be entitled to two weeks’ leave. This leave is unpaid, but statutory parental bereavement pay may be available to those who meet the eligibility criteria and provide the relevant notifications and evidence, as set out in the Social Security Contributions and Benefits Act 1992 (as amended).
What to do: Consider updating existing leave-related employee policies to address this, taking into account specific religious and cultural requirements around bereavement to ensure that any policy wording is drafted in a way that minimizes (or protects against) the risk of racial or religious discrimination claims that may arise from refused requests for time off for religious observances on death. Be aware of bereaved mothers’ existing maternity leave rights i.e. mothers who lose a child after 24 weeks of pregnancy, or during maternity leave, will not lose their entitlement to maternity leave and pay. Rights to paternity leave and shared parental leave (where notice of leave has been given) will generally also be maintained in these circumstances.
(2) Employment Terms and Conditions
What’s changing: The right to receive a statement of written particulars under Section 1 of the Employment Rights Act 1996 will extend to workers, as well as employees, and the time period for providing this will also change. Currently employers have up to two months to issue the statement to any employee working for them for more than a month; from 6 April 2020, the right to a statement of written particulars will become a day one right.
The information to be included in the written statement from day one is being expanded and will now need to also (i.e. in addition to the existing requirements) cover:
What to do: Review existing employment contract templates and revise recruitment processes to ensure that all of the required information is included in contracts of employment and that, for new hires, this is picked up during the recruitment process. Consider whether procedures are already in place to ensure documentation is issued on or before the first day of work.
(3) Extension of the IR35 Tax Regime to Private Sector
What’s changing: New tax changes from 6 April 2020 increase risks and costs for private sector employers engaging contractors via intermediary companies.
What to do: Current arrangements with contractors should be audited urgently to ensure compliance with the new rules, or other remedial steps. Please see our recent update for more information regarding this.
(4) Holiday Pay
What’s changing: The reference period for determining an average week’s pay will increase from 12 weeks to 52 weeks or, if the worker has been employed for less than 52 weeks, the number of complete weeks for which the worker has been engaged.
What to do: Consider which workers this new reference period will be relevant for and how to go about implementing the new reference period. Ensure that records of pay for the 52 weeks prior to 6 April 2020 are up to date and continue to accurately record such data.
(5) Agency Workers – Swedish Derogation
What’s changing: The “Swedish derogation” principle, which currently allows employers to avoid pay parity (after 12 weeks) between agency workers and direct employees if certain conditions are met, is being removed. By no later than 30 April 2020, temporary work agencies (“TWAs”) must provide agency workers whose existing contract contains a Swedish derogation provision with written confirmation that this provision will no longer apply from 6 April 2020. TWAs must also provide agency workers with a document containing information on the type of contract, the minimum expected rate of pay, how they will be paid and by whom (the Key Information Document).
What to do: If you have – or plan to engage – agency workers, you should review the information being provided to them to ensure that it complies with the new requirements.
If you have any questions concerning the material discussed in this client alert, please contact the members of our Employment and Employee Benefits practice below.
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