From 6 April 2020, the information which has to be provided to employees in writing when they start employment is changing. Written information will also have to be given to workers for the first time. Employers should start reviewing their contracts now to ensure they are compliant with the new rules.
The changes to the written particulars that must be given to employees at the start of employment ("Section 1 Statement") result from the government's response to the Good Work Plan in which it agreed that workers should be given greater clarity and transparency on certain terms relating to their working relationship. However, whilst the aim is clear, some of the legislative changes are not, which gives rise to some uncertainty and risks for employers. We are expecting government/Acas guidance on these new requirements which will hopefully give employers greater clarity on what is expected of them.
The key points to note are as follows:
- Extension to workers: The obligation on employers to give employees a Section 1 Statement will be extended to workers engaged on or after 6 April 2020 i.e. anyone who has contracted to do work personally for the employer but are not running their own business;
- Additional particulars: The following additional particulars will need to be included in the Section 1 Statement to any employee/worker starting work on or after 6 April:
- Any terms and conditions relating to hours of work, including relating to normal working hours, the days of the week the employee is required to work, and if these hours or days are variable, how they will vary;
- Any terms and conditions relating to paid leave other than holiday and sick leave. This information can be set out in another "reasonably accessible" document provided it is referred to in the principal document;
- Particulars relating to any other benefits provided by the employer that are not set out elsewhere in the Section 1 Statement. This information must be set out in the principal statement. It is not clear, however, how much detail needs to be provided. For employers that offer benefits that are more generous than the statutory entitlements, the requirement to include all terms and conditions in the principal document could make the contract long and unwieldy and employers may consider summarising them in a schedule. In addition, employers will need to take care to ensure that the drafting in relation to any non-contractual benefits is clear so as to reduce the risk of them becoming contractual inadvertently;
- Particulars relating to any probationary period, including its conditions and its duration; and
- Particulars relating to training including (a) any training entitlement provided by the employer, (b) any part of that training entitlement which the employer requires the employee to complete, and (c) any other training which the employer requires the employee to complete and which the employer will not the bear the cost of. Items (b) and (c) must be provided in the principal document although item (a) can be set out in another reasonably accessible document provided it is referred to in the principal document. "Training entitlements" is not defined so it is not clear how this should be distinguished from training more generally. It is hoped that the government/Acas guidance will provide some clarity on this.
- Existing employees: There is no obligation to provide a new statement or the additional particulars to existing employees (defined as those employed between 30 November 1993 and 6 April 2020). However, if an existing employee requests an updated statement on or after 6 April 2020, they will need to be provided with the updated statement within one month of their request. They will also need to be notified of any changes to their particulars (including the additional particulars from 6 April 2020) within one month of the change if they have not previously requested an updated Section 1 Statement;
- Day 1 right: The entitlement to a Section 1 Statement will become a "day 1" right therefore removing the current qualifying period of one month's employment;
- By no later than the first day of employment: All the written particulars will need to be provided no later than the beginning of employment with the exception of information relating to pensions, collective agreements and non mandatary training entitlements, which can be provided later but in any event by no later than 2 months from the beginning of employment; and
- In a single document: All the written particulars will need to be set out in a single document other than information relating to sick leave and pay, any other paid leave, pensions, non mandatory training entitlements and disciplinary and grievance procedures, which can be set out in another "reasonably accessible" document provided they are referred to in the principal statement.
Where an employer fails to provide an employee/worker with a Section 1 Statement or it is incomplete or inaccurate, the individual can seek a declaration from the employment tribunal requesting it to confirm the particulars as they stand or to amend and substitute other particulars as it considers appropriate.
An employee/worker can also make a claim to the employment tribunal for compensation for breach of the Section 1 requirements. However, such claims cannot be brought as a standalone claim; the individual must have been successful in bringing another claim (e.g. unfair dismissal). In addition, where the employer has rectified the breach before tribunal proceedings have begun, no compensation will be available. The maximum compensation available in any event is 4 weeks' pay capped at the statutory limit (currently £525 per week).
As a result, for employers who do not strictly satisfy the requirements of a Section 1 Statement, the risks may be relatively low.
It is hoped that the anticipated government/Acas guidance will give employers greater clarity on what is expected of them. In the meantime, employers can start preparing for the changes now by taking the following steps:
- Assessing the employment status of the individuals they are planning to recruit on or after 6 April 2020 to determine whether they are entitled to a Section 1 Statement; and
- Reviewing and updating their contracts for compliance with the new requirements. In doing so, it would be prudent to maintain separate contracts for employees and workers to reduce the risk of inadvertently granting workers the same rights as employees.
Summary of Section 1 Statement requirements
The table below sets out all the written particulars that will need to be included in the Section 1 Statement from 6 April 2020. The text in bold sets out the additional particulars.