The law on employment contracts is about to undergo its biggest overhaul for many years. Employers will have to review the content of all of their existing employment contracts to ensure they remain legally compliant. More of your staff will be entitled to receive a written contract too.
So, what’s actually happening?
Make sure you know the employment status of your staff!
Take the time now to review the nature of your working relationship with your self-employed contractors.
Recent cases with Uber and other gig economy employers – where their self-employed contractors have been found to be workers – show how easy it is to get employment status wrong.
Changes from April 2020?
Here are some of the main changes
Holiday Pay
When employees’ pay differs each week/month and you need to work out their holiday pay, you work out the average over 12 weeks.
What’s Changing?
You’ll need to work out the average over 52 weeks instead of 12. This could mean higher holiday pay for some workers
Employment Status
To determine whether someone is an employee, worker or self-employed, you need to consider the personal service, control, and mutuality of obligation tests.
What’s Changing?
The Government is to review the way that employment status is determined and may shift the focus of the current tests. Under any new rules, your self-employed contractors may no longer be self-employed.
Stable Contracts
Workers engaged in “unstable” or “unpredictable” contracts like zero-hours or variable hours had no power to require you to consider making the contract more stable.
What’s Changing?
These staff will have a right to request more stable contracts after 26 weeks and you will have a legal duty to consider them. You’ll be able to refuse the request on certain grounds.
Agency Workers
Agencies can engage agency workers on a specific type of contract (Swedish Derogation) which means the agency worker is not entitled to the same pay as the end user’s direct recruits after 12 weeks.
What’s Changing?
The type of contract will be banned to close the equal pay loophole so using agency workers will get more expensive. Agencies will have to give more information to agency workers about their terms. [1]
[1] Reproduced from Croner Taxwise