Breaking | New laws around staff contracts

Kate Palmer - Associate Director of HR Advisory & Consultancy

February 03 2020

In April 2020, the rules around staff contracts will change.

It’s part of the UK Government’s Good Work Plan, the “largest upgrade to workers’ rights in over a generation”. And it could make a big difference to how you do business…

Here’s everything you need to know to be ready for the new laws.

How are contracts changing?

Technically, it’s not the contracts that are changing—it’s the statement of main terms and conditions. They’re very similar, but with an important distinction. 

A contract of employment is a broad legal agreement with your employee. It even covers implied or verbal agreements, such as a promise to allow flexible working or a pay rise.

A statement of main terms and conditions is a written document that you must give to your employees when they start working for you.

It covers your employees’ main conditions of employment and can form an important part of their overall contracts.

From April 2020, the laws around statements of main terms and conditions are changing in three important ways:

  1. You need to give your employees a written statement from day one of employment.
  2. You need to include more information in the written statement.
  3.  You need to give a written statement to workers.   

Read on to find out more.

1) Day one rights

Instead of having two months to give a new employee a written statement of main terms and conditions, from the 6th April 2020 you need to give it to them from the day they start working for you.

This new law aims to give people clearer information on their working conditions from day one of employment.

It’s good for bosses, too. More clarity helps to protect you from disputes or disagreements with your employee later on.

But the new law may require more admin on your side, especially as you now need to provide much more information on working conditions.

2) More info on working conditions

You need to boost the level of information in your statements of main terms and conditions to include:

  • Details on the eligibility for paid leave, such as sickness absence and maternity leave.
  • The duration and conditions of any probationary period.
  •  All payment and benefits.
  • The specific days and times your employee must work and whether their working hours are variable.
  • Any training entitlements.

If that looks like a lot of information, that’s because it is.

And while more clarity earlier on in the relationship with your worker is a good thing, it does mean that you need to be confident in the workplace policies you include in the written statement.

After all, it’s a legally-binding document. If you don’t follow the rules that you lay out, you risk an employee taking you to a tribunal or civil court for breach of contract.

If you’re a Peninsula client, then you don’t need to worry. You already have watertight workplace policies for your business, such as rules on maternity and sick pay. Plus, we write statements of main terms and conditions for your staff to reduce your time spent on admin and make it easy to hire new people.

And our services are particularly useful because more staff than ever now have the right to a statement of main terms and conditions. Here’s why…

3) Workers get a statement of main terms

You now need to give a statement of main terms and conditions to workers as well as employees.

If you’re confused about the difference between a worker and an employee, don’t worry. It’s a complicated area of employment law.

In short, an employee has a contract of employment with you. A worker doesn’t.

That means you and your employee have a “mutuality of obligation” towards each other. You need to give your employee work for set pay, and your employee needs to do that work. 

You don’t have this obligation to staff classed as workers. A courier on a zero-hours contract may count as a worker because they can accept or refuse any work that you offer.

Workers have fewer rights than employees, too. For example, a worker doesn’t get the right to statutory redundancy pay or a minimum notice period.               

As I said, it’s complicated. The important thing to remember is that from the 6th April 2020 you need to give all workers and employees statements of main terms and conditions.

And if you need any help classifying your staff’s employment status, call the Peninsula HR helpline on 0800 028 2420.

It’s not just contract rules that change…

Several Good Work Plan laws come into force in April 2020, including extra rights for agency workers and a big change in how you calculate holiday pay for some workers.

For a complete rundown of the new laws, call our HR helpline. If you’re a Peninsula client, you get 24/7 access to our team of employment law experts who help you to prepare your business to meet the legal changes.

And if you’re not yet a Peninsula client, don’t worry. You can still get a free advice call on how the new laws affect you. Call 0800 028 2420.

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