Traditionally, developments in employment law take effect in April of each year. This April, some of the incoming changes are underwhelming:
- Statement of main particulars of employment
All employees are currently entitled to receive a statement of main particulars of employment within 2 months of starting work, containing particulars as prescribed by sections 1 to 3 of the Employment Rights Act 1996. From 6 April, this right will be extended to workers as well as employees and must be given before the first day of employment. The extent of the particulars to be provided will be widened but not substantially. In practical terms, any well-informed and sensible employer will already be providing contracts to workers and employees, before they start work, that may cover the requirements that are coming into effect in April, so the changes are not ground-breaking.
- Agency workers
In respect of agency workers, the “Swedish derogation” in the Agency Workers Regulations 2010, which allows employment businesses to avoid pay parity between agency workers and comparable direct employees where the agency workers receive pay between assignments, will be removed. April will herald a new requirement for agency work-seekers to be provided with a “Key Information” document which will include information on the type of contract, the minimum expected rate of pay, how they will be paid and by whom. This is an extension to rights to receive information and written terms of engagement from the employment business that an agency work-seeker already has under sections 13 and 14 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003, so again, not a substantial change and only of interest to the recruitment industry.
- Information and consultation
The threshold to request workplace information and consultation arrangements under the Information and Consultation of Employees Regulations 2004 (“the ICE Regulations”) will be lowered from 10% to 2% of employees, subject to the existing minimum of 15 employees. The ICE Regulations apply only to employers with 50 or more employees.
- Calculation of holiday pay
The reference period for determining an average week’s pay (for the purposes of calculating holiday pay) will be increased from 12 weeks to 52 weeks.
- Taxation of termination payments
Currently an ex-gratia termination payment is tax-free up to £30,000 and any excess subject to income tax only, not NICs. NICs will be applicable to the excess from 6 April.
Of greater significance are the following changes:
- Off-payroll tax rules in the private sector
The most significant employment-related development scheduled to occur on 6 April, subject to the passing of the Finance Bill 2020, is the introduction of the off-payroll tax rules in the private sector. Payments to workers supplied to large and medium-sized companies by certain types of prescribed intermediary (including personal service companies (PSCs)), will be treated as employment income and subject to income tax and NICs. Broadly speaking, the entity contracting with the PSC (such as the end-user client or the last agency in a longer supply chain of intermediaries before the PSC) will be primarily responsible for applying PAYE deductions and, more significantly, for paying employer’s NICs. There is a huge shift in the burden of establishing whether a worker supplied by the PSC is providing services that are “deemed employment” and in responsibility for employer’s NICs, both of which currently rest with the PSC itself.
- Parental bereavement leave and pay
The introduction of a whole new category of family-friendly leave is expected on 6 April entitling employees who lose a child under the age of 18 to 2 weeks paid statutory leave.
Future potential developments
We are expecting judgment in 2020 on a number of interesting cases including:
Various claimants v WM Morrison Supermarket: This case was heard in the Supreme Court in November 2019. Morrisons has been held liable by the Court of Appeal for unauthorised and criminal data theft and disclosure by a rogue employee, despite the fact that the ICO’s investigation into this case found that Morrisons had not breached the Data Protection Act and was not fined. The Court of Appeal judgment makes Morrisons liable for thousands of claims for compensation from the data subject employees whose data was stolen. We wait to see if this finding will be upheld.
Uber BV and others v Aslam: This case is expected to be heard by the Supreme Court in July and will hopefully advance our understanding of the definition of worker status and self-employed status.
We are also expecting an Employment Bill in 2020 which may introduce significant developments such as flexible working as a default position and redundancy protection for pregnant women and women on maternity leave. No draft legislation has yet been proposed.
Could be an interesting year if you like that sort of thing.
This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.