What to watch for in 2020

Contracts must be issued on day one of employment (or before)
The government’s response to the Taylor Review of modern working practices requires, that from April 2020, employers must provide any new member of staff with a written ‘Statement of Particulars’ from the first day of employment. These statements are in effect the written contract of employment. This changes the current position which allows employers up to 13 weeks after the employee’s start date to issue a contract. While this change should be perfectly achievable for most situations, the changes also require contracts to be issued to ‘workers’ not just ’employees’. In other words, any casually employed staff must receive their contracts on, or ideally before, the first day of employment.

Probationary periods must be included in contracts
The government has also amended the legislation covering the content of the ‘Statement of Particulars’ which every employee or worker must receive on their first day of work. This now needs to include a statement explaining whether a probationary or trial period exists, how long this will last and any conditions which relate to it. The importance of this clause cannot be overstated. If it is worded incorrectly, then any dismissal during the probationary period may lead to a claim of breach of contract, even though a staff member may not be able to claim unfair dismissal.

Working hours must be clear
At the moment, some staff work variable hours, sometimes as part of a rota, and at other times very flexibly. Contracts are often written flexibly to reflect this. For example, ‘Hours of work are 35 per week, to be worked Monday to Saturday, as agreed with your manager’. From April, the Statement of Particulars will require a greater degree of clarity and certainty to be written within the statement (or contract). Employers will need to state the days of the week the worker is required to work and whether working hours or days may be variable, with details of how they may vary. Again, thought and care needs to be given to how this is worded.

Training which is required must be in the contract
There has never been a requirement for employers to include a clause about training requirements unless the contract was for an apprenticeship or traineeship of some sort. However, from April, employers will need to stipulate if training is required to be completed. This is not necessarily a bad thing. Councils requiring their trainee clerks to complete their CiLCA or, for grounds maintenance staff to complete health and safety qualifications will now need to include them in the contract. Staff who fail to achieve these qualifications within the time allowed may well find themselves at risk of breaching their contract.

Parental bereavement law
The Parental Bereavement (Leave and Pay) Act 2018 provides for at least two weeks’ leave for employees following the loss of a child under the age of 18 or a stillbirth after 24 weeks of pregnancy. Employees with 26 weeks’ continuous service will be entitled to paid leave at the statutory rate and other employees will be entitled to unpaid leave.

Changes to holiday calculations
From April, holiday pay for employees working irregular hours must be calculated using a 52-week reference period. The current period is 12 weeks. This means that if someone currently takes a holiday after a ‘quiet’ 12 weeks their pay will be lower than if they take their holiday after a ‘busy’ 12 weeks.

It’s a piece of legislation that allows HMRC to treat contractors and others working through a limited company or ‘personal service company’ as employees, who must be paid through PAYE if, in reality, they are working as employees (or workers).

IR35 applies to all employers – not just the public sector
What is IR35?
From 1 April 2020, the onus for deciding whether an individual should be treated as self-employed or a worker shifts to the employing organisation. This means that employing organisations must determine whether a worker is an employee or a contractor for tax purposes. Employers will have to issue a Status Determination Statement to their contractors, which makes their IR35 status clear and explains why. As long as employers support their decision with sufficient evidence and file the appropriate tax documents, they should avoid any penalties

How can you determine the IR35 status?
HMRC has updated its online assessment. Additionally, it has produced ‘supporting guidance‘. Employers are strongly advised to keep a copy of their reasoning (or determination) and if they conclude that an individual is a worker, pay them through PAYE!