Getting ahead of the game – ensuring employment contracts are compliant

The current lockdown is undoubtedly a strange time for us all. However, it does offer an opportunity to pick up tasks that may otherwise have been pushed to the bottom of our to-do list. For many businesses, now is the time for planning for the future and taking whatever measures they can to ensure their business comes out of lockdown in the strongest possible position and well prepared for the future and opportunities that arise.

One project that employers may wish to spend time on is reviewing and updating their standard template employment contracts. New legislation came into force on 6 April this year which relates to the minimum contract terms to be included, who they must be issued to and the timing of issuing. Focusing on this now will ensure the contract is both up to date and legally compliant in preparation for the time when businesses are in a position to recruit and expand.

Section 1 of the Employment Rights Act 1996 sets out the minimum information that an employee must be given by an employer and details of when that information needs to be given (referred to below as a ‘statement of terms’). Following the Taylor Review in July 2017 and the Good Work Plan published in December 2018 the requirements under Section 1 have been updated to include new compulsory information that must be provided to employees and workers, new timeframes relating to when the information must be provided and new information confirming what must be included within the main statement of terms and what can be provided in another easily accessible document. It is therefore important to understand these changes, so that contracts of employment and engagement for all new starters reflects these changes.

While recruitment plans may not be a priority for many businesses right now, preparing for the future is key and this time may be well spent reflecting on the terms offered currently and thinking about changes they want to introduce to plan for the future. Once businesses have got to grips with the ways in which COVID-19 directly impacts them and adapted to this ‘new normal’, they may plan to permanently change working arrangements. This could involve making changes to existing contracts to provide for greater flexibility or new ways of working.

As well as updating contract to reflect general changes, one crucial change, referred to above, is that a statement of terms will need to be provided to both employees and workers who start work on or after 6 April 2020. Previously the right to receive a statement of terms was only available to employees. As new workers will now need written terms, many employers may not have a template worker contract they can use if it is not something they have issued before – so ensuring the correct templates are in place is more important than ever.

In addition, the statement of terms must be provided on or before the first day or employment (or engagement) rather than within the first two months of employment starting, as previously the case*. Many employers will already provide a statement of terms before employment begins but some may not be so organised. Having up to date documents prepared and ready to go will assist them with this new requirement.

* There are a few exceptions where certain information can still be provided within 2 months of the commencement date of the employment or engagement for example (but not limited to) information relating to disciplinary and grievance procedures and some information relating to training.

The statement of terms must now include additional information including amongst other things: confirmation of the length of a probation period (or confirmation that no probationary period is applicable); more detailed provisions in relation to working hours and whether working hours are variable; details of any training provided and who bears the cost of this training; paid leave arrangements; and details of all benefits. It may be that input is needed from a range of people within the business to ensure all the relevant information is being captured when considering what it is necessary to include within the statement of terms under these new headings.

Despite the fact the new legislation does not apply to written statements retrospectively, it is worth bearing in mind that existing employees have the right to request an updated statement in light of the changes. Upon receipt of a request, employers will have up to a month to provide a statement that complies with these new rules. Therefore, even if the business doesn’t envisage employing or engaging any new staff in the near future – it is a still advisable to be prepared in case any current employee requests an updated contract.

Get ahead by getting in touch now with myself or another member of the Moore Barlow Employment Team. We can help you understand these changes, update your employment documents and/or carry out a general review of your employment documentation.