Contracts of Employment – New Legal Requirements

With business pre-occupied with the impact of the coronavirus, many will have had little time respond to the changes impacting contracts of employment in April 2020.

There is currently an obligation to provide a written statement of particulars of employment to all employees within two months of commencement.

However, this statement will now have to be issued on day one.

Another important change is that it does not only apply to those who are labelled as employees. Other “workers” who perform a personal service even if they are not on payroll, will also have to be given a statement of terms and conditions.

In addition, more information has to be provided is as follows:-

The days of the week the worker is required to work, whether the days and working hours may be variable and how any variation will be determined.
Any paid leave to which the worker is entitled.
Details of any other benefits provided by the employer that are not already included in the statement.
Any probationary period, including any conditions and its duration.
Any training entitlement provided by the employer and including whether it is mandatory and/or must be paid for by the worker.

This information is in addition to over 20 items from identity of employer and employee through to applicable collective agreements which must be included in the statement of employment particulars. This link shows a complete list of the required particulars.

Information to be Provided

This means that the following information now has to be provided to employees in a statement of employment.

The identity of employer and employee.
Start date and period of continuous employment.
Pay (or method of calculation) and interval of payment.
Hours of work including normal working hours.
Holiday entitlement and pay.
Job title or brief description of the work.
Place of work.
Person to whom appeal on disciplinary and grievance decisions can be made.
Details of collective agreement (this should be provided within two months).
The days of the week required to work and whether working hours may be variable and how.
Any other benefits provided by the employer.
Any probationary period, including conditions and its duration.
Any training entitlement provided by the employer including whether any of it is compulsory and any part which the employer does not bear the cost of (two months).
Notice periods of termination by either side.
Terms as to length of temporary or fixed term work.
Terms relating to work outside the UK.

Some of the information required can also be provided in a separate document referred to in the main statement which include:

Terms relating to absence due to incapacity and sick pay.
Certain information about notice periods.
Certain information about disciplinary and grievance.
Terms as to pension and pension scheme.
Particulars of training provided by the employer (two months).
Particulars about the paid leave (other than provisions relating to holiday and sick pay).

This has to be in a reasonably accessible document.

The change may have an impact with existing employees if they request an employment statement of terms. If an existing employee asks for an employment statement it must include all the new details.

Employment Tribunals may Enforce

If an employee does not receive the required details they may go to the Employment Tribunal to get a declaration confirming their particulars or amending the particulars if they believe that they are wrong. There is also a possibility of compensation of two to four weeks’ pay in the event that another claim is also made. While, free-standing right compensation, a claim which will often be “thrown in” if an employee goes to the Employment Tribunal for some other reason.

Why is a contract review essential?

The extent of the changes means that all employers should be seeking a review of their Contracts of Employment from an expert.

It should be said that it is advisable to have your contracts reviewed on a very regular basis anyway because of changes to legislation and case law.

Employers should also review restrictive covenant clauses. These will only protect the employer if reasonable and suitable for the particular employee and situation. Standard clauses signed by someone when they entered employment may well not be applicable anymore in their new role. Also, if introducing clauses of this kind great care should be taken to ensure that a proper process is followed as it is usually necessary to provide for additional consideration.