HR Newsletter - January 2020
A fundamental part of the service(s) offered to all Black Mountain clients, is to provide timely updates to any changes in legislation that will affect the way in which you operate your business. As such, please find a summary of the key Employment Changes which will be implemented in the UK in April 2020.
With the move to exit the EU imminent we at Black Mountain have carried out a piece of work for our HR Admin clients which outlines the information they require to support those employees who need to apply for pre-settled or settled status. In addition, this includes a communication pack for their employees to ensure that all the current legislation in relation to right to work checks are being undertaken. Please contact your local HR Advisor should you wish to enquire about receiving this information.
THE GOOD WORK PLAN
The Good Work Plan becomes effective on 6th April 2020.
The creation and implementation of The Good Work Plan came about as a result of an independent review known as The Taylor Review of Modern Working Practices in July 2017. Several recommendations were submitted and after a number of consultations, the Government created The Good Work Plan which is their ‘vision for the future of the UK Labour market’.
So what changes are taking effect on 6th April 2020 and what does it mean for you?
Extension Of The Right To A Written Statement Of Particulars (Employment Contract)
Currently, employers must to provide a written statement setting out the basic terms of employment to all employees and workers whose employment lasts for 1 month or more and must be provided within 2 months of the start of their employment.
Under the Good Work Plan the statement must now be given by the first day of employment. In addition, the right to a statement of particulars has been extended to include all workers as well as employees. The legislation also requires additional information to be provided, including:
The days of the week the employee is expected to work (work pattern)
Whether days or hours are variable and if so, the basis on which they will be determined
All benefits provided by the employer
Probationary period details including conditions for passing and duration
Details of eligibility for sick leave and pay
Details of other types of paid leave including maternity and paternity leave
Details of all renumeration (not just pay) e.g. vouchers, lunch, health insurance etc
Details of training entitlement, mandatory training etc (including mandatory training that is not funded by the employer) This can be summarised and further details of exact training can be provided in a separate document but referred to in the statement
Increase in the period over which holiday pay is calculated
The calculation of holiday pay for employees who work variable hours and have variable rates of pay is due to change. Currently the holiday pay is calculated by averaging the number of hours worked over the previous 12 weeks. This is known as the reference period.
Under the new regulations, the pay reference period will increase from 12 to 52 weeks. For employees who have worked for their employer for less than 52 weeks, the reference period will be calculated as the total number of weeks they worked for the company. The change is designed to help even out the variation in pay for employees, particularly those in seasonal casual roles.
Increased protection for agency workers
The Agency Worker Regulations 2010 (AWR 2010) entitles agency workers to receive the same pay and basic working conditions as a permanent employee once they have completed 12 weeks’ continuous service working in the same role. The only time this is not applicable is if the agency worker opts out of this right and agrees to receive a guaranteed level of pay between their temporary assignments. This is known as the ‘Swedish Derogation model’ and currently provides an exemption to the right to equal pay.
Under the Good Work Plan, the Swedish Derogation model will be removed, and all agency workers will be entitled to equal pay to permanent employees. The 12 weeks’ continuous service criteria still remains. Additionally, there will also be an obligation to provide all agency workers with a Key Facts page providing information about their contract, pay rates and arrangements.
On or prior to 30th April 2020, agency workers whose existing contracts contain a derogation provision must be provided with a written notification by the agency that it will no longer have effect.
The Government has also announced other changes as part of the Good Work Plan, which currently have no implementation date confirmed. These are listed below:
Increase in the ‘break of service’ period
Currently, a break in service of at least 1 week or more is considered a sufficient gap to break continuity of service. (There are some instances where this is not applicable. Should you require further advice please contact Black Mountain.)
The Government has committed to increasing the gap required to break continuity of service to 4 weeks, making it easier for employees with variable working patterns to accumulate continuity of service.
Right to request a stable contract
The government has committed to introducing a right for all employees and workers to request a more stable working pattern (subject to having acquired at least 26 weeks’ continuous service).
In addition to the Good Work Plan, there are several other upcoming employment law changes which come into force in April 2020.
Parental Bereavement Law
The Parental Bereavement (Leave and Pay) Act 2018 is expected to come into force in April 2020. It will apply to all employees from the first day of employment and give bereaved parents the right to 2 weeks of leave following the loss of a child under the age of 18, or a stillbirth after 24 weeks of pregnancy. Bereaved parents employed with a minimum of 26 weeks’ continuous service will also be entitled to receive statutory parental bereavement pay. Those with less than 26 weeks’ continuous service will be entitled to take two weeks of unpaid leave.
Extension of IR35 to private sector
Tax legislation IR35 will be extended to the private sector from April 2020. Presently, the IR35 rules apply where an individual (the worker) personally performs services for another person (the client), through an intermediary (usually a personal service company - PSC), and if the services were provided under a direct contract, the worker would be regarding for tax purposes as being employed by the client. Currently it is the intermediary’s responsibility to determine whether IR35 applies.
From 6th April 2020, the changes to IR35 rules will apply to only medium and large and will be consistent with the changes that took effect in the public sector in 2017.
There’s an exemption for end-clients who are ‘small businesses’ as defined by the Companies Act 2006 which means meeting two or more of the following criteria:
Annual turnover is no more than £10.2 million
Balance sheet total is no more than £5.1 million
No more than 50 employees.
Where the end-client meets two or more of these criteria, responsibility for determining the IR35 status of a contract remains with the PSC and the changes do not apply.
The government has included clauses in the legislation to ensure medium or large businesses do not set-up arm’s length companies or subsidiaries to procure services from PSCs. The legislation will apply to the parent company based on the total amount of turnover and the total amount of the balance sheet total of the connected entities.
There’s no small business exemption for public sector organisations and the legislation will apply to all end-clients engaging PSC workers in the public sector.
Under the new rules, for all contracts entered into, or payments made on or after 6th April 2020, the onus will be on the end user client to make a determination. Responsibility for accounting for tax and NI will shift to the party who pays for the individual’s services, known as the ‘fee-payer’.
All medium and large size business should carry out an assessment to determine whether the hew rules under IR35 apply to their independent contractors and review the contracts and pay arrangements currently in place.
Changes to ICE (Information and Consultation of employees)
The Information and Consultation of Employees Regulations (ICE) applies to businesses with over 50 employees. The regulations give employees the right, subject to certain conditions, to request that their employer sets up arrangements to inform and consult them about issues in the company.
The requirement to inform and consult can be started by either a formal request from employees or by an employer choosing to start the process.
Currently at least 10% of the workforce must submit a request before an employer is obliged to take action. From April 6th, 2020, this percentage will reduce to 2% of the workforce, with the requirement that at least 15 employees make the request. All other conditions remain the same.
The Government is also currently undertaking 3 significant consultations which may result in further legislation. The consultations are due to complete in October 2020 with further information being made available as to which are to implement and when.
The proposals under consideration include establishing a right to reasonable notice of working hours, the right not to suffer any detriment for refusing work offered as unreasonable notice and the right to compensation when shifts are cancelled without reasonable notice.
Protections for unwell and disabled workers
This consultation includes a wide range of measures to reduce ill-health related job losses including the right for non-disabled employees to request workplace modifications, a review of statutory sick pay (SSP), automatic reporting of sickness absence to the government through payroll and co-funding of occupational health services for SME’s.
Changes to Early May Bank Holiday 2020
As a reminder to all clients, the Early May Bank Holiday has been moved back by 4 days for the whole of the UK to coincide with the 75th anniversary of VE Day. The Bank Holiday is traditionally held on a Monday but has been moved back to Friday 8th May 2020.
CHANGES TO STATUTORY PAYMENTS:
NATIONAL LIVING WAGE AND NATIONAL MINIMUM WAGE
Please note that changes to the statutory redundancy rate are not yet available. Once they are published, they will be communicated to all clients.
As a process, employers should start to review their current contracts and recruitment processes to ensure that they are fully compliant with all of the proposed changes. As your outsourced HR partner of choice, Black Mountain are reviewing all relevant documentation for all clients to ensure that the required legislative changes are in place in readiness for their implementation in April 2020.
Black Mountain will carry out a thorough review of company policies, handbooks and contractual documentation to ensure that they are compliant with the proposed changes. For all non-retained admin clients, we are able to offer the same service for an agreed fee.