Brexit: Employment Law changes
The impact Brexit will have on Employment Law has, until recently, been relatively unknown. Simon Jones lists the key changes employers will face to help businesses prepare and remain compliant.
Whatever your views of Brexit, one unintentional consequence of the debates over the last 4 years is that there have been no significant changes to Employment Law - giving employers a rare period of stability in the rules around employing people.
That all ends in April 2020, when several key changes are set to change the law. It’s worth pointing out that these arise primarily from the “Good Work” report commissioned by the previous Theresa May-led government. The thrust of all of them is to eliminate ‘loopholes’ that had allowed some employers to avoid giving certain categories of people who worked for them the rights that others enjoyed.
So, what exactly are these changes and what are the practical implications?
Firstly, there are changes to the Written Statement of Particulars (the document we commonly call the Employment Contract):
- It must be given to a new starter on the first day they work for you (not within 8 weeks, as currently).
- A written statement must be given to people classed as workers* even if they are not employees – although the statement need not be identical for a worker.
- It must clearly state the expected hours of work and how they can be varied.
- If you operate a probationary period, details must be specified (although a lot of written statements currently include this, it’s not a legal requirement at present).
- It must outline any training provided by the employer that is a requirement of the role.
In addition to the above points, an individual can now make an Employment Tribunal claim if you fail to provide a statement on time or if it doesn’t include the right information. Currently people can only make a claim about this if it’s part of a wider Tribunal claim.
(*If you’re not sure about the difference between an employee and a worker, there’s more information here).
Secondly, if someone’s weekly hours vary, the current method of calculating what they get paid (when on holiday) has been to take the average of the last 12 weeks worked. From April, you must take the average of the last 52 weeks when calculating holidays. The change has been brought in to assist those whose job is particularly affected by seasonal work (e.g. agriculture, tourism).
Thirdly, if your business uses agency workers, you may know that they have to be paid the same as your own staff if they are with you for more than 12 weeks, unless they are directly employed by the agency and paid by them at times when they don’t work (known as “the Swedish Derogation”). In April, this exception will be abolished – all temps must be paid at the same rate (and receive similar benefits) to your own staff. There are also new requirements for agencies.
Fourthly, if an employee has a child (under 18) who dies (or they suffer a stillbirth after 24 weeks pregnancy), then they are entitled to up to 2 weeks bereavement leave, which – if they have worked for you for more than 26 weeks – is paid at the same rate as maternity pay. The leave can be taken as 2 weeks together or in blocks of one week (e.g. if the funeral is delayed for some reason) but must be used within one year of the death.
Finally, if you employ contractors who trade through their own limited company, you will be required to decide if they should be paid through the payroll and have PAYE/National Insurance deducted – the so-called IR35 rules. You can use the CEST calculator to determine their status. Note that this change doesn’t affect very small firms (with fewer than 50 staff and a turnover of less than £10.1m). For more information on IR35 please visit Gov.uk.
In order to lessen the impact of Brexit across the business, make sure you stay informed and adhere to the new Employment Law changes. These changes will come into effect in April 2020, so it’s important you’re aware of the steps you need to take to remain compliant. Good luck!
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