New right to a written statement of terms

Following the recommendations of the Taylor Review of modern working practices in 2017 (the Taylor Review), the Government published its Good Work Plan which introduces various changes aimed at enhancing the rights currently enjoyed by employees and to extend these improved entitlements to workers.

The emergence of a variety of new working patterns has led to increased scrutiny of employment status and a glut of case law on the subject (e.g. several cases involving Uber raising the question of whether its deliver drivers are genuinely self-employed or workers).  This derives from the fact that employment law provides an array of protections to employees that do not apply to other members of the workforce.

In simple terms an ‘employee’ is someone who works under a contract of employment, in the classic ‘master and servant’ relationship. It is a contract of service, where the employer is obliged to provide work and the employee is obliged to perform it. As an employee you are protected against unfair dismissal, discrimination and benefit from rights and entitlements under the Working Time Regulations, to name but a few statutory rights.

At the other end of the spectrum is someone who is genuinely self-employed, where there is no right to receive work, or to perform it if offered. Someone who is self-employed has the benefit of autonomy, but very little protection under employment law.

Somewhere in the middle is a ‘worker.’ This person has less autonomy than their self-employed colleague, but more than an employee. They are typically engaged under a contract of some sort, under which they have agreed to personally perform certain services in a prescribed manner. A worker does not have protection against unfair dismissal, but they cannot be discriminated against and they are entitled to things like paid holiday and the national minimum wage.

Currently, under section 1 Employment Rights Act 1996, only employees who have been continuously employed for more than one month, must be provided with a written statement of certain terms of their employment (known as a “section 1 statement” or “written particulars of employment”) by their employer within two months of employment commencing. Certain information must be provided to the employee in a single document including the names of the employer and employee, the employment start date and the date of any period of continuous employment, hours of work and pay and the interval of payment, holiday entitlement and holiday pay. At present, employers are afforded some flexibility as the remaining section 1 information can be provided at different times within the generous two-month timeframe.

From 6 April 2020, all new employees and workers will have the right to a statement of written particulars from their first day of employment and there will no longer be an exception to this entitlement for jobs lasting less than a month. Additional information will have to be included as part of the extended right such as details of any probationary period, the anticipated length of the job, provisions regarding certain types of paid leave (including maternity and paternity leave) and specific days and time of work (this list is non-exhaustive). More information must be included in a single document with a few limited exceptions including provisions concerning pensions, collective agreements and training requirements which may be provided separately or in instalments.

Under the current requirements the following particulars may be included in a supplementary statement – notice periods for termination by either party, terms relating to absence due to incapacity and sick pay, terms pertaining to the length of temporary or fixed-term work and any terms related to work outside the UK a period exceeding one month. However, once the new rules come into force, these will have to be provided in the principal statement.

The compensation available for failing to provide the required statement of particulars (currently up to four weeks’ gross pay) will not be increased under the updated requirements. Likewise, claims of this type will retain their limited scope as ‘piggyback’ claims only, meaning that workers and employees will only be able to pursue this type of claim alongside another substantive claim rather than as a standalone claim.

Given the new obligation to provide particulars on ‘day one’, employers should begin preparation of the revised statement of particulars during the recruitment stage, well in advance of the individual’s start date, to ensure compliance with the new timing requirement. Employers should also review their existing contract templates and check that these provide for every element of the new requirements.

Employers will also need to give careful consideration as to who might qualify as a worker. Unless the employer is entirely satisfied that the individual in question is in business on their own account or that they are a customer of the individual, it is advisable to treat the individual as a ‘worker’ and provide them with a statement.

It will be important for employers to distinguish between those who are employees and those who are workers to ensure that only individuals who are genuinely employees will benefit from specific employee protections (such as protection against unfair dismissal). Care should therefore be taken to issue contracts of employment only to employees and to use a separate template when issuing particulars for workers.

Although the right to receive the enhanced statement of particulars will only apply to new employees and workers whose start date is on or after 6 April 2020, existing employees (whose employment commenced on or after 30 November 1993 but before 6 April 2020) are entitled to request updated particulars if they wish and employers will be obliged to comply within one month of the request.

If existing workers do not currently have written particulars in place, it is prudent to issue them with these in line with the new requirements to avoid future disputes.

This article is from the winter 2019 / 2020 issue of Agricultural Brief, our newsletter for farmers, landowners and others involved in agriculture. To download the latest issue, please visit the newsletter section of our website. 

To keep up-to-date with the latest news, legal updates and seminar information, please register and select the areas that are of interest to you.