Employment Update – Spring 2020

25th March 2020

These are unprecedented and turbulent times for businesses and individuals alike.  If you have any queries or would just like to talk through any of the issues your business is experiencing at the moment please do pick up the phone and give us a call.  All of our mobile numbers are found on the website.

However, beyond the “coronavirus chaos” there are lots of changes on the general employment law front for April 2020 that we wanted to ensure that you are aware of. The changes affect a range of areas from an increase in the national minimum wage and national living wage to changes to contracts of employment and redundancy pay.   With this in mind, we’ve prepared an update of the key information that you need to know.

Planned changes in effect from 6 April 2020

Contracts of employment

  • All employees and workers (who for example may be employed on a casual basis) will have the right to a statement of particulars of employment or working arrangements from day 1 of their employment.
  • All written statements should now contain the following:

– the hours and days of the week the employee or is required to work, whether the hours may be varied and, if so, how.
– entitlements to any paid leave.
– any other benefits not covered elsewhere in the written statement.
– details of any probationary period.
– details of training provided by the employer.

Many well drafted employment contracts will already cover the above, but employers should check their templates to ensure that they are compliant.

Increases in the national minimum living wage and national minimum living wage apply from 1st April 2020.

For further details click here.

Settlement agreements
All termination payments above the £30,000 threshold will be subject to class 1A NICs.

Calculating holiday pay
The reference period for determining an average week’s pay for holiday purposes increases from 12 weeks to 52 weeks. Workers who do not have a regular working pattern throughout the year are not disadvantaged by having to take their holiday at a quiet time of the year when their weekly pay might be lower.

Parental bereavement leave
All employees who lose a child under the age of 18, or suffer a stillbirth after 24 weeks of pregnancy, will be entitled to 2 weeks’ statutory leave to be taken in one block or as two separate blocks of a week, within 56 weeks of the date of death. Employees with at least 26 weeks’ service, who meet minimum earnings criteria, will also qualify for Statutory Parental Bereavement Pay (at the same rate as Statutory Paternity Pay).

Redundancy pay
The statutory cap on a week’s pay increases to £538 per week.

Agency workers
– Agency workers acquire the right to be provided with a “Key Facts Page”, to include information about the type of contract, the minimum expected rate of pay, how they will be paid and by whom (for example, by an intermediary or umbrella company), any deductions or fees that will be taken, and an illustrative example of what this might mean for their take-home pay.
– The Swedish derogation, which currently allows employers to avoid pay parity between agency workers and permanent staff is abolished. By no later than 30 April 2020, temporary work agencies must provide agency workers whose existing contracts contain a Swedish derogation provision with a written statement advising that, with effect from 6 April 2020, those provisions no longer apply.

Off-payroll rules (IR35) – Delayed until April 2021
If this affects your business, you are more than likely already aware of the changes set to come into force this April. If not, in as concise a summary as possible, here are the headlines:

1. The change will not affect you if two or more of the following apply to your business:
a. Your annual turn-over does not exceed £10.2m
b. Your balance sheet total does not exceed £5.2m
c. Over the course of a year your average workforce does not exceed 50 employees

2. If it does apply to you, here is what it means:
The aim is to prevent “disguised employees” avoiding tax. If your business contracts with personal service companies (PSC) for the provision of workers’ services, if without the PSC in place the worker would essentially be an employee of your business, it becomes your responsibility to determine the status of that individual and account for tax and national insurance through PAYE to HMRC.

3. What can you do to prepare?
a. Identify and catalogue current engagements and contracting terms.
b. Decide a process for making determinations of whether IR35 applies.
c. Decide your response. Some examples of strategies that could be adopted include:
i. Continue the existing arrangement with the tax and NICs consequences;
ii. Amend standard terms used with PSCs;
iii. Consider fully outsourcing; or
iv. Bring contractors onto the payroll as employees.

Supreme Court
Leave to appeal to the Supreme Court has been refused in the case of Hextall V Chief Constable of Leicestershire Police. This means that the Court of Appeal’s decision stands that it was neither direct or indirect discrimination, nor a breach of the equal pay sex equality clause, for an employer not to pay enhanced shared parental pay of an amount equivalent to the enhanced maternity pay available to female employees.

Of interest – Vegan Discrimination
Casamitjana v League Against Cruel Sports – An employment tribunal has held that ethical veganism is a protected characteristic and that therefore employers can be liable for discriminating against vegan employees. Although this decision does not create a binding precedent, it was the foreseen outcome and is generally regarded as being representative of the courts general approach. In response to this decision, the Vegan Society has published guidance for employers to help them avoid discrimination claims. Get it here

Coronavirus
Acas is currently reviewing its advice daily and we are very much aware that by the time this newsletter is circulated, the position may have changed. Therefore, the safest option is to refer you to the latest guidance here or give us a call.

Therefore, the safest option is to refer you to the latest guidance here:

Acas
https://www.acas.org.uk/coronavirus
Government information
https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19

Get in touch
If you would like more information on the content of this article or employment law generally, please contact Melanie Rowe on 07854 029922 or by email at melanie.rowe@murrellassociates.co.uk