Updating your template contracts in light of upcoming changes

As readers will be aware, under Section 1 of the Employment Rights Act 1996 organisations are required to provide employees with a written statement containing certain basic terms of their employment.

Services
Employment
Type
Update

With effect from 6 April 2020, there are a number of substantive changes to:

  • the requirements regarding what information needs to be included in the statement,
  •  when organisations need to issue the statement, and
  • who is entitled to receive a statement (of some description).

This means organisations should be planning ahead now to ensure their template contracts are “section 1 compliant” for new recruits joining after 6 April 2020 and that they have the procedures in place to ensure the correct type of contract is issued, at the correct time.

Organisations will need to update their current template employment contracts so that new joiners – starting on or after 6 April 2020 – receive a contract which complies with the new legislation (and is therefore “section 1 compliant”). New contracts being issued (on or after 6 April 2020) to existing staff will also be caught by the new requirements.

For existing staff, the existing rules will continue to apply and there isn’t an immediate requirement to issue an updated contract. However, the transitional provisions mean that staff can request a contract which is in compliance with the new requirements  – if requested, an organisation has one month to provide this. Furthermore, the (existing) requirement to provide existing employees with a section 4 statement notifying them of any changes to their (“section 1 required”) written particulars still applies – after 6 April 2020, this will also bite if changes are made to any particulars covered by the new legislation (e.g. benefits).

In terms of timing, organisations will be required to provide written statements to new joiners on or before the first day of employment. There is no longer an exception for contracts of less than one month in duration. For some organisations, this may mean the on boarding process needs to be streamlined.

The obligation to provide a written statement previously only applied to employees – under the amended legislation, this will now extend to workers. This is a very significant change.  Clearly, organisations engaging both employees and workers will need to have (at least) two different template written statements (one applicable for employees and one applicable for workers) as the terms will differ. For example, the template for workers will not include a continuous service date. Inadvertently issuing the wrong form of written statement could lead to confusion or uncertainty over status and entitlements.

In terms of the additional information organisations will be required to specify, another key implication of the new legislation is that organisations will now need carefully to consider what benefits and training will be offered to new recruits before they start work. Organisations will need to ensure references to training and benefits are incorporated into the appropriate document (and at the appropriate time) in compliance with section 1, and that this is done in a way which causes no confusion as to the nature (and limits) of any entitlement, whilst also being expressed in line with the organisation’s values.  Organisations may wish to seek specific advice on these new provisions as it is anticipated this may be a challenging area.

The Employment Team is happy to advise on the upcoming changes to the requirements for written particulars and assist with any queries you may have – please get in touch with a member of the team or your usual advisor.


All content on this page is correct as of March 16, 2020.