Slideshow

Six employment law changes you need to know about in April 2020

by Samantha Castle on 28th Jul 2020

It’s already been a busy few weeks in terms of employment law updates and the implementation of new (to the UK) initiatives such as furlough and government loans to businesses. However, employment law continues to evolve all the time and, with the new tax year starting today, 6th April, we will see new guidance for both employers and employees.

1. Vento bands

The presidents of the Employment Tribunal in England, Wales and Scotland have released new Vento bands (tiered values for compensation for damages payable for injury to feelings and psychiatric injury) in respect of claims presented on or after 6th April 2020. The new bands take into account changes in inflation:

  • A lower band of £900 to £9,000 (less serious cases);
  • A middle band of £9,000 to £27,000 (cases that do not merit an award in the upper band); and
  • An upper band of £27,000 to £45,000 (the most serious cases), with the most exceptional cases capable of exceeding £45,000.

These bands take account of the 10% Simmons v Castle uplift.

2. Extension of the right to a written statement of particulars of employment

Currently, employers must provide a written statement setting out the basic terms of employment to all employees whose employment lasts for one month or more. This must be provided within two months of the start of their employment.

Under new legislation, this statement must be given to the employer on or before day one of their employment. The right to a written statement of particulars has also been extended to include workers, as well as employees.

In addition to these employment law changes, the legislation requires additional information to be given, including:

  • The days of the week that the employee is expected to work
  • Any variation in days or hours worked and the basis on which they will be determined
  • All benefits provided by the employer
  • Details regarding the employees probationary period including the duration and the conditions that must be met for passing the probationary period
  • Details of mandatory training and training entitlement

3. Increase in the period over which holiday pay is calculated

Currently, holiday pay entitlement of a worker who has irregular working hours is calculated by averaging the number of hours worked over the previous 12 weeks (known as ‘the pay reference period’).

From 6th April 2020, the pay reference period will become 52 weeks. For workers who have been working for less than 52 weeks, it’ll be the total number of weeks worked.

This change is to ensure workers are not losing out where their working hours are subject to fluctuations, including seasonal variations.

4. Termination payments in Settlement Agreements (or otherwise)

At the moment, generally the first £30,000 of a termination payment (the lump sum payment made as a result of the termination of a person’s employment) is free of tax and no National Insurance contributions will be due on any part of the payment whether or not it exceeds £30,000.

From 6th April, all termination payments that are chargeable to income tax, including those payments over £30,000, will be subject to the employer’s (Class 1A) National Insurance contributions. Employers therefore need to consider the extra cost of settlement when making ex-gratia offers in excess of £30,000.

5. Increased protection for agency workers

Currently, agency workers are entitled to be paid the same rates as permanent employees after 12 weeks, unless they are working under specific contractual arrangement under which they receive a minimum level of pay when they are between assignments (this is known as the ‘Swedish derogation’ model).

From 6th April 2020, this distinction will be abolished. The right to comparable pay will apply to all agency workers after 12 weeks.

The government has also introduced an obligation to provide agency workers with a Key Facts document. This will set out their employment relationships and terms and conditions with their agency. It also provides basic information about their pay rates and arrangements.

Agency workers considered to be employees will also be protected from unfair dismissal or suffering a detriment if the reasons are related to asserting rights associated with The Agency Worker Regulations.

6. Parental bereavement leave

The Parental Bereavement Leave and Pay Act 2018 has now been passed by Royal Assent. It will be coming into force on 6th April 2020.

This Act will give all employed parents the right to two weeks’ leave if they lose a child under the age of 18, or suffer stillbirth from 24 weeks of pregnancy. Parents will also be able to claim pay for this period, subject to meeting eligibility criteria.