The Good Work Plan – How up to date are your Employment Contracts?

Did you know it has been nearly a year since the new legislative changes came into effect which strengthened the employment rights of workers?

What action have you taken to ensure compliance in your business since last April? Are you comfortable you are meeting your contractual obligations as an employer?

If you haven’t updated your contracts of employment since April 2020 chances are that certain clauses may be missing from your contracts or obligations not being met in accordance with UK Employment Law.

‘The Good Work Plan’, stemming from The Taylor Review of Modern Working Practices, concluded in July 2017, placing importance on the fairness and equality of workers’ and their employment rights, including that of Agency Workers. Dubbed the biggest overhaul in employment law in 20 years, this was a significant legislative change taking place in 2020.

So, let’s take a look at what these implemented changes mean for your business and how much work is required to bring your contracts up to date!

Firstly, one of the biggest changes to impact employers is the requirement to provide a written statement of particulars on day 1 of employment. Previously employers had the luxury of having a two-month window to provide employees with their contract of employment and this was based on an individual having worked for their employer for at least one month. So that means even if a contract lasts less than one month, a worker must be provided with a contract of employment. Do you have a process in place to ensure you meet this obligation, on day 1?

In addition to ensuring you provide staff with their contract of employment by day 1, the written statement of particulars must include additional clauses, which previously were not required, these are:

• The specific days of the week the individual is required and how any variation is determined.
• Details of additional rewards and benefits (even if not contractual).
• Details of other paid leave such as Maternity/Paternity Pay.
• Details of mandatory training required for the role and what training will be payable by the employer.
• Details of eligibility for sick leave and pay.
• Duration of the probationary period, including any conditions around this i.e. no contractual sick pay during probation or right to extend or dismiss during probation.

In addition to introducing more equitable rights for Agency Workers and strengthening contractual obligations within the Contract of Employment, the ‘Good Work Plan’ also introduced the following enforcements:

• All workers must have an itemised payslip, including casuals and those on zero-hours contracts.
• Extending redundancy protection for pregnant women and new parents.
• Lowered the threshold required to set up Information and Consultation arrangements from 10% to 2% of employees.
• Reform of Statutory Sick Pay so that it is ‘explicitly a basic employment right for which all workers are eligible regardless of income from day 1.
• Legislation to ban employers deducting staff tips.
• New Parental Bereavement Leave.
• Holiday pay reference period adjusted, increasing from 12 weeks to 52 weeks to calculate the average weekly pay.
• The delayed IR35 ‘off-payroll working rules’, which will now come into effect on 6 April 2021 (was meant to be 6 April 2020), placing the responsibility on the client to determine the employment status of a contractor and whether IR35 rules apply.

What can you do to avoid a hefty penalty for non-compliance?

Failing to issue a contract of employment on day 1 can land you in an employment tribunal. The employee can be awarded up to 4 weeks’ pay capped at £450 per week. Therefore, it is essential that you have a process in place that complies with this day 1 right.

There are several things you can do to ensure you are compliant in all aspects of employment law. Here are a few suggestions:

1. Conduct an HR Audit of your workforce to determine whether any new processes need to be established for different types of workers in the business.
2. Review your contracts of employment and using the above checklist as a guide, add the additional clauses, which are currently missing from your template contract.
3. Ensure that you make clear whether a benefit is contractual or not, particularly the ‘not’. The last thing you want is to inadvertently make something contractual as a result of a minor admin error!
4. Whilst you don’t ordinarily need to reissue the new contract to existing staff, if an employee does request you issue them with the new contract, you must provide this and it must be done within one month of the request.

If it helps to outsource these tasks, BluSkyHR is able to offer a full compliance package, which includes a tailored review of your contractual employment paperwork, together with a full HR Audit and an hour of HR Consultancy time for you to use within the first 2 months of purchase – all for just a one-off payment of £645 (£100 discount on this price if purchased in February 2021). For further details, please see link https://bluskyhr.co.uk/pricing/.

If you want to benefit from a free initial assessment of your compliance needs, feel free to schedule a call at a time to suit you, using the following link https://bluskyhr.co.uk/contact/ or alternatively email [email protected].