The world we live in is changing and as it does the law needs to keep up, and in some instances take the lead. This is clearly the case with the employment law changes that are due to come in from April 2020.
They are a direct result of the Taylor Report ; an independent review of modern working practices by Matthew Taylor who in 2017 considered employment in the ‘gig’ economy.
The government’s response was the Good Work Plan which set out several changes that we will start to see become law from April 2020.
So, let’s look at two of the changes that will impact all employers.
1. Written Statement of Terms
This is the requirement to provide employees with details of the terms of their employment in writing. The current legislation allows employers up to 2 months to provide this information.
From April 2020, the written statement will have to be issued on the first day of employment (or before). Further the right will be extended to ‘workers’ and not just employees.
This is good news and bad news for business.
It will be bad news for any employer who does not currently issue written terms on day one of employment. They will now have to change their processes around new starter to ensure documents are issued, and this will an additional administrative burden. This will especially be the case where the organisation has lots of workers (or casuals); where there may be a high turnover; or the use of seasonal staff. The Hotel industry is one such industry that has all of these. Many will therefore need to review how they do things.
However, it is a burden that will reap benefits and, if set up correctly, can be managed without additional resource or cost (and can even be automated ).
The good news comes from the fact that this change will help create greater clarity from the outset of the employment relationship. I have seen many examples where a lack of written terms has led to unnecessary misunderstandings and even conflict, (which has been to the detriment of both employer and employee). So, I welcome this change.
There are also additions to the information that must be provided, including items such as mandatory training and probationary periods. So employers do need to check that any written statement includes the correct information.
Going beyond legal requirements.
But I would go a step further. While the written statement will provide certain information (and hence more clarity), just meeting your legal requirements does little to protect the needs of the business and provide flexibility. Employers should therefore take this opportunity to issue a full contract of employment to employees (and a more detailed agreement to workers), that will include all the items required under the written statement and additional terms to provide greater protection.
The written contract of employment is a key document in the employment relationship. When there is a dispute, the first question is normally ‘what does the contract say’ and it is the contract that either allows you to do something or restricts you! I am sure you would prefer to have as many options as possible in any situation and having a solid contract of employment is essential if you want to achieve this.
2. Holiday Calculations (Variable Pay)
A further change is around the calculation of a week’s pay for holiday pay purposes, where an employee or worker has variable pay.
Currently holiday pay is based on the average pay for the 12 working weeks before the holiday. From April this reference period will move to 52 weeks (i.e. average pay for a year).
This seems a sensible change as it will iron out any seasonal fluctuations.
The downside is around the need to calculate holiday over a 52-week period, together with the fact that the need to calculate average holiday has increased following recent change in case law.
Over the last couple of years the case law on holiday pay has clarified that any regular additional payments, including regular allowances, voluntary or compulsory overtime, have to be taken into consideration when calculating holiday pay.
The hotel industry will have been affected by this change as they generally have flexible working (and variable pay) arrangements.
The Good Work Plan is about modern working practices, but this does not have to be at odds with the need for businesses to have the flexibility and protection required to support the commercial needs of the business in any situation.
Managed correctly the two changes outlined above can be of benefit to both employers and employees.
Paula Fisher, founder of online HR platform www.yourhr.space