As legislation previously stood, employers were obliged to issue employees with a written statement of employment particulars within two months of their start date, if their contract lasts for one month or longer.
However, legislation in this area changed on the 6th April 2020 following recommendations in the Good Work Plan announced by the government in December 2018.
This included changes around when an employer must issue a contract of employment, who we should issue it to, and what it should contain.
This article contains information on the background to this change in legislation, as well as practical guidance about what employers need to amend in their processes to ensure you’re legally compliant and avoid risking tribunal claims.
When should a contract of employment be issued?
The written statement of employment particulars and the contract of employment – the previous position
As it stood, legislation dictated that employers had to issue a ‘written statement of particulars’ to employees within two months of them joining if their contract is due to last for one month or longer. This statement was stipulated in Section 1 of the Employment Rights Act 1996.
The difference between the contract of employment and the written statement of employment particulars is that the employment contract is a legal relationship between an employer and employee.
Employers often include the written statement of employment particulars in their contract of employment.
Previously, only “employees” were entitled to receive a written statement of employment particulars.
April 2020 changes to contracts of employment
Since the 6th April 2020, employers now have to provide a written statement of employment particulars on or before the start date. This also needs to be provided not only to employees, but also to workers.
More information on determining employment status can be found here: Employment status: employed or self-employed?
Also, there is no longer a requirement for a contract length to be one month or more. So, all workers and employees, no matter how long they are due to work for you, are entitled to receive a written statement of employment particulars or a contract of employment. Importantly, the contract or written statement needs to be made available to the employee or worker on or before their start date.
This new legislation will not affect employees who joined your organisation prior to 6th April 2020. However they do have the right to request a written statement in line with the new requirements. Employers have a deadline of one month to comply with a request.
What information needs to be included in the written statement of employment particulars or contract of employment?
Employers were previously able to include some of the information required in the written statement of employment particulars in the employee handbook or in separate policies. However, since 6th April 2020, the majority of the required information needs to be included in one complete document, which will be known as the ‘Principal Statement’. Most employers will choose to include this in their contracts of employment.
The current information required in the Section 1 Statement is summarised below:
- Names of the employer and employee.
- The date of commencement of employment and continuous service.
- The rate of remuneration and the interval at which this is paid (for example, weekly or monthly).
- Terms and conditions relating to the hours of work, holiday entitlement*, sick pay and pensions.
- The notice period that the employer and employee should provide to terminate the contract of employment.
- The job title or a brief description of the work the individual is employed to carry out.
- Where the employment is not permanent, the contract length and the end of the fixed term period, if relevant.
- The place(s) the employee will be required to work.
- The address of the employer.
- Any collective agreements which impact the terms and conditions of employment directly.
- Where the individual is required to work outside the UK for a period of more than one month, the period of time they are due to be abroad, their currency of remuneration, any additional remuneration and benefits to be provided and any terms and conditions relating to his return to the UK should be included.
*ACAS guideline in relation to holiday entitlement also specifically outlines that contracts of employment should include an explanation of how the entitlement is calculated if the employee leaves the organisation.
In addition to the above, employers will now also need to provide the following to comply with the regulations.
- A written job offer.
- Details of how the employee will be paid.
- The standards of behaviour it expects from its employees and what will happen if these standards are not met.
- The days of the week that they are required to work.
- Whether working hours or days may be varied, how this can happen, and how this will be determined.
- All paid leave entitlement in addition to annual leave and holiday pay (including but not limited to paid parental leave and sick leave).
- All employee benefits and remuneration.
- Any probationary period, including duration and conditions.
- Training that the employer will provide.
- Any mandatory training that they must complete (including training that the employee will need to pay for).
Employers will only be able to refer to their intranet, employee handbook or alternative policy for example, where it is deemed a ‘reasonably accessible’ place and where the following terms are referred to.
- Sick pay and procedures.
- Additional paid leave.
- Pension.
- Information on company disciplinary and grievance procedures.
- Training entitlement over and above mandatory training.
Exceptions to the rule
Employers are expected to provide all of the above information by day one of the employee or worker joining the organisation. However, there are still some exceptions which can be provided in a supplementary statement within two months of their start date. This exceptional information includes the following:
- Pension.
- Collective agreements.
- Information on company disciplinary and grievance procedures.
- Training entitlement over and above mandatory training.
If you don’t have any information relating to a “particular” that is required, this must be stated.
What are the risks of non-compliance?
Be mindful of this change in legislation and ensure your procedures make you compliant, otherwise you may be running the risk of employment tribunal claims, disgruntled members of staff and potentially grievances.
Employees and workers may be entitled to submit a claim against their employer if they have not provided a written statement of employment particulars within the legal time frame, or if they have not included the required information.
Currently, it doesn’t look like this will be allowed as a standalone claim, despite arguments in the Taylor Review. However, employees and workers will be able to make a complaint with regards to any wrongdoing from an employer in this area in tandem with making another substantial claim. This may then entitle them to compensation of between 2 and 4 weeks’ pay, capped at the statutory limit.
So, although the financial risks of employers not abiding by the changes in the Employment Rights Act are limited, complaints could become numerous considering the legislation covers workers since 6th April 2020.
In addition, we would advise that you review your contracts of employment carefully to ensure they do not run the risk of unintentionally writing in that an employee or worker is contractually obliged to something. For example, any wording used in a contract of employment in relation to training provided by the employer or enhanced maternity pay needs to be drafted carefully to ensure it has the intended consequence.
How to update your processes for the new legislation
So what practical steps can you take to ensure you’re compliant with the new legislation? Here are some of our suggested action points.
1. Review the status of employees and workers
Replacing the word ‘employee’ with ‘worker’ and vice versa on a written statement of terms and conditions seems simple at first glance. However, deciphering between the two statuses usually involves a number of factors and can be a fairly grey area.
We would advise that you review this for your workforce, and define who is a worker and who is an employee within the business. This will enable you to issue new joiners with an appropriate statement.
More information on determining employment status can be found here: Employment status: employed or self-employed?
2. Review your contracts of employment, policies and procedures and employee handbook
It will be necessary for employers to review the information you provide in your ‘principal statement’ to ensure this is compliant with the updated legislation. Many employers will write the written statement of employment particulars into their contracts of employment.
Consider also whether your staff handbook and policies and procedures need updating.
3. Review onboarding processes for new joiners
Review your onboarding processes to ensure you provide the correct information in your contracts of employment, in the right time frame and to the right individuals. To do so, ensure pre-employment negotiations around salary and other terms and conditions are finalised prior to an employee or worker’s start date. This will ensure that the new joiner’s statement can be drafted and provided to them by their first day, at the latest.
4. Introduce processes for existing staff
Although existing staff don’t have a right to receive the additional information automatically, they do have a right to request the information up to three months after their employment terminates.
We advise that you design a process to follow when you receive such a request from an existing member of staff. This will ensure that you’re able to promptly provide the additions no later than one month from the request.
5. Training for managers and HR professionals
In light of the changes in legislation, we recommend that you review the training requirement for your managers and HR professionals. This is to ensure they’re aware of the updated processes and legislation.
6. TUPE implications
For employers involved or due to be involved in any TUPE processes, you must be mindful of the additional information that should be received and provided as part of this.
We hope you found this article useful. If you’d like to discuss your HR requirements with our team of experienced HR consultants, please do get in touch.
