Employment Law Update for April 2020

April is always a key time within the year where we see change to employment law.

Changes to written statement of employment particulars

There are 3 important changes that apply from 6th April 2020

  1. All “workers” employed on or after 6th April 2020 will be entitled to a written statement of employment particulars (the contract).
  2. Employees and workers must be provided with their written statement on or before their first day of employment.  This is a key change as it used to be within the first 8 weeks of employment. 
  3. There is additional information that written statements will need to contain:
    • Hours and days of the week the worker / employee is required to work, whether they may be varied and how
    • Entitlements to any paid leave
    • Any other benefits not covered elsewhere in the written statement
    • Details of any probationary period
    • Details of any training provided by the employer

Changes to holiday pay calculations

From 6th April 2020, the reference period to calculate a week’s pay for holiday pay purposes will be extended from the previous 12 weeks of work to the previous 52 weeks.

There has been lots of debate over the past couple of years with regards holiday pay and whether bonus and overtime should be included in the calculation of holiday pay.

Holiday pay should be calculated on the basis of the employee’s normal pay and recent case law means that where an employee normally works overtime, or gets paid a bonus such as commission, this should be included in the calculation of their holiday pay.

What does this mean???

Ultimately, it means that if an employee has worked a settled pattern of overtime over a period of time, payment for that overtime is pay that they normally receive and must therefore be included in holiday pay. Where there is no settled pattern of overtime, the employer should calculate average pay over a 52 weeks reference period leading up to the period of annual leave.

It will mean it becomes even more important for you to keep track of employees’ working time throughout the year. This includes overtime, to ensure they are correctly remunerated whilst on annual leave and in some cases, working out processes with third party payroll providers.

Increases in National Living Wage and National Minimum Wage

The following rates are effective 1st April 2020:

  • The National Living Wage (NLW) rate for workers aged over 25 years will increase from £8.21 to £8.72 per hour
  • The rate for workers aged 21 to under 25 years will increase from £7.70 to £8.20 per hour
  • The development rate for 18 to under 21 years olds will increase from £6.15 to £6.45 per hour.
  • The rate for under 18 years who are no longer of compulsory school age will increase from £4.35 to £4.55 per hour.
  • The apprentice rate will increase from £3.90 to £4.15 per hour.

We encourage you to assess the pay of your workforce to ensure that you are paying in line with the above rates.  Remember the risk for not complying is a fine of up to £20,000 and being named and shamed.

Increased statutory family and sick pay rates

Statutory maternity (SMP), paternity (SPP), adoption (SAP) and shared parental pay (ShPP) is expected to rise from £148.68 to £151.20 a week.  This increase normally occurs on the first Sunday in April, which will be 5th April.  The weekly rate for statutory sick pay will rise from £92.05 to £94.25.

Statutory sick pay (SSP) is due to rise from £94.25 to £95.85 from 6th April 2020.

Parental bereavement leave and pay

The Parental Bereavement Leave and Pay Act 2018 has now been passed by Royal Assent and is expected to come into force in April.

It will give all employed parents the right to at least 2 weeks’ leave if they lose a child under the age of 18, or suffer a stillbirth from 24 weeks of pregnancy. Employees with 26 weeks’ continuous service will be entitled to paid leave at the statutory rate (still to be confirmed) and other employees will be entitled to unpaid leave.

Changes to agency workers’ rights

There are three important changes to agency workers’ rights which will apply from April 6th 2020:

  1. Abolition of the Swedish Derogation (sometimes referred to as ‘pay between assignments’ contracts). Previously agency workers could agree a contract which would remove their right to equal pay with permanent counterparts after 12 weeks working at the same assignment. From 6th April 2020, these contracts will no longer be permissible, and all agency workers, after 12 weeks, will be entitled to the same rate of pay as their permanent counterparts.
  2. All agency workers will be entitled to a key information document that more clearly sets out their employment relationships and terms and conditions with their agency.
  3. Agency workers who are considered to be employees will be protected from unfair dismissal or suffering a detriment if the reasons are related to asserting rights associated with The Agency Worker Regulations.

Changes to ICE (Information and Consultation of Employees) Regulations

From 6th April 2020, there will be a reduction in the percentage of employees required to make a valid request for an agreement on the sharing of information and consultation within the workplace. Currently it is at least 10% of the workforce who must put in a request before an employer is obliged to take steps to comply with this right. This percentage will be reduced to 2%. The requirement that at least 15 employees make the request will remain.

National Living Wage – increase next year

You’ll know by now that each year the government announce increases to the National Minimum Wage and the National Living Wage. Predictions are in for what the new National Living Wage rate will be in 2019 and it’s a significant increase so worth planning for…..

What is the National Living Wage?

This is the rate that employers legally have to pay to their employees over the age of 25. It was first introduced in 2016 at £7.20 and resulted in significant costs to many employers.

Many people are still confused by the other term ‘Real Living Wage’. Just to clarify, this is the figure calculated by the Living Wage Foundation based on the real cost of living in the UK. It causes confusion but the main difference is that there is no legal requirement to pay the ‘Real Living Wage’.

What will the National Living Rate be next year?

The rate is currently £7.83. Phillip Hammond announced in the recent budget that the National Living Rate would be rising to £8.21 next year. This represents a 4.9% rise to the current rate and therefore one that employers need to start planning for.

(For information the real living wage has been announced as a 2.9% increase to £9.00 per hour except for London where it increases by 3.4% to £10.55).

Don’t get caught out

The next rise will take effect in April next year. Remember, employers who are incorrectly paying their staff below the minimum rates can be named and shamed and also fined up to 200% of the underpayment. Most employers caught by this in the past were as a result of simple errors and not deliberate attempts to underpay their staff.

Start planning

You know it’s coming and we recommend that you analyse your workforce now to assess the cost and plan for the increases.

Employment Tribunal Statistics

As people managers, it’s worth a look at these numbers to see what impact the abolishment of Tribunal Fees has had.

Tribunal Statistics April to June 2018

The Ministry of Justice has published statistics and here are the key figures:

  • the number of single claims lodged increased by 165% compared with the same quarter last year;
  • the number of single claims outstanding rose by 130% compared with the same quarter last year. HM Courts & Tribunal Service is in the process of recruiting more employment judges, which will help reduce the backlog in the medium to longer term;
  • disability discrimination cases had the largest average award (£30,700). Religious discrimination claims had the lowest average award (£5,100). The average award for unfair dismissal awards was £15,007.

Tribunal fees were abolished in July 2017 which means that there is no longer a fee to be paid for an individual to bring any type of claim to an Employment Tribunal and this is likely to be a major factor is the sharp increase in claims.

What does this mean for employers?

With the removal of tribunal fees, it is likely as a Company that you may receive more claims from employees/ex-employees than in previous years, as individuals are no longer put off making a claim because they cannot afford the fee. In addition, it could result in an increase in the number of spurious claims made as people can lodge a claim without any evidence to support their case.

Employers need to ensure that they are taking steps to prevent them being taken to tribunal initially. Providing the right documentation, having policies in place and following these procedures correctly will reduce the likelihood of facing a claim.

The reputational damage of ending up in front of an employment tribunal has become greater due to the introduction of decisions being published online. This lets anyone view the decision and the scrutiny of business practices normally carried out by a tribunal. Taking steps to prevent unlawful treatment in the business will reduce the many risks of going before a tribunal.

Disclaimer
The materials and content contained on this website are provided for general information only and should not be taken as legal advice or other professional advice. ConciseHR Ltd accepts no responsibility for any loss which may arise from reliance on information contained in this website.

Employment Tribunal Award Limits Increases

From 6th April 2018, the limits applying to various tribunal awards and other amounts payable under employment legislation increase, including the maximum amount of a week’s pay for the purpose of calculating the basic award for unfair dismissal and a redundancy payment, increases to £508, and the maximum amount of the compensatory award for unfair dismissal, which increases to £83,682.

Family Friendly and SSP Pay Rates Increases

Statutory maternity (SMP), paternity (SPP), adoption (SAP) and shared parental pay (ShPP) will rise from £140.98 to £145.18 a week from April.

Usually the rate increase would be from 1 April, but the statement to Parliament announcing the new figures suggests the date this year may be Monday 9 April 2018.

Statutory sick pay (SSP) is due to rise this month from £89.35 to £92.05.

The lower earnings limit will rise from £113 to £116.

National Minimum Wage / National Living Wage increases

The following rates are effective 1st April 2018:
• The rate for workers aged over 25 years (NLW) will increase from £7.50 to £7.83 per hour
• The rate for workers aged 21 to 24 years will increase from £7.05 to £7.38 per hour
• The development rate for 18 to 20 years olds will increase from £5.60 to £5.90 per hour.
• The rate for 16 to 17 year olds will increase from £4.05 to £4.20 per hour.
• The apprentice rate will increase from £3.50 to £3.70 per hour

7 Quick Tips – Conducting an Effective Appraisal and Setting Objectives

So it’s the beginning of the year and a good time to give some focus to your staff for the year ahead so that everyone is aligned towards achieving your business goals.

Appraisals are a great way to engage your employees which leads to them taking pride in their job and going the extra mile.

But why does the word ‘appraisal’ makes everyone groan?

Managers see it as an additional task to complete with much form filling. The staff themselves often dread the discussion particularly if they’ve had poor experiences of appraisals in the past where it has been purely a paper exercise of no value, or they’ve received criticism that they see as unjust.

So, here’s some advice by way of quick tips that will make conducting appraisals simple and effective for you and your managers.

1. Don’t obsess about having the perfect form – An appraisal is about reviewing objectives and setting new ones for the year ahead, reviewing competence and performance, and discussing training and development needs. So yes it may be useful to have a structured form to record the information, but as long as you write it down then this will suffice. There are many templates available on-line, but be careful not to download one that’s over complicated. Feel free to use our template:

Staff Appraisal Form

2. Do some preparation – it sounds obvious but often gets missed. For each person, you need to be ready to talk about the objectives you’re setting them (see 4. below) and be able to give them feedback on how they’re performing against their previous objectives (see 5. below). If they’ve had a previous review then take time to recap on this before your meeting. Think about talking to other managers or even customers, if appropriate, to get their perspective and feedback.

3. Listen to your employee – although you’ll have already prepared objectives and feedback, remember the appraisal is a 2-way discussion. Be prepared to listen to your employee about any ideas or concerns. Being involved in the objective setting will have a positive impact on your employee’s engagement with them.

4. Set challenging objectives for the year ahead – which align to the overall goals of your business. Think beyond just the day to day tasks of the role. When you set your objectives, ensure they are ‘SMART’:

Specific – state a desired outcome. What the employee need to achieve?
Measurable – how will you and your employee know when the objective has been achieved?
Achievable – is the objective something your employee is capable of achieving but also challenging?
Relevant – does the objective relate to those of your business?
Timebound – when does the objective need to be achieved?

5. Give constructive feedback and lots of praise where it’s due – telling people when they are doing a good job sounds so obvious, but is often overlooked. Yet receiving praise and endorsement that you’re doing well is a powerful motivator. Where you need to let your employee know about concerns with their work, competence or behaviour, make sure you provide specific examples to back up the criticism. This will help your employee understand your concerns and to be more accepting of the issue. Talk about ways that your employee can improve. Remember though, the appraisal meeting should not turn into a disciplinary meeting to address specific issues.

6. Discuss training needs and area for development – Discuss any training and development needs that your employee may need to support with achieving objectives, developing in their current role, or preparing for future roles in your organisation. Remember there are lot of ways to learn, not just attending training courses. Define how the training need will be met and set timescales for it being completed.

7. Write up and ongoing review – End the meeting by summarising the key points and actions agreed. After the meeting, write up your notes from the meeting on a template if you have chosen to use one. Let your employee review the notes and add any comments. And most importantly, agree when you will review the document again. It’s useful to have regular informal catch ups with your employees about their work, but you may want to have a more formal quarterly or 6 monthly review of the appraisal objectives. This will help both you and your employee to monitor whether he/she is on track with achieving the objectives, to agree any necessary changes and to align further support if required.

The Benefits in a Nutshell
• Your employee receives valuable feedback
• Your employee learns what is expected of him/her
• Your employee gains recognition for his/her efforts
• Problems are recognised and addressed
• Your employee can contribute to discussions about his/her training