January 30, 2020

What’s occurring? Key employment law changes in 2020

Royal Mencap case: putting sleep-ins to bed?

The Supreme Court will make a final determination on whether “sleep in” shifts are working time for the purposes of the National Minimum Wage. The hearing is listed for 12 and 13 February 2020.

Last year the Court of Appeal ruled that sleep-in staff are only entitled to the National Minimum Wage when they are awake and “available” to work but providers have been left in limbo since permission was granted for an appeal against the judgment.

The implications of the ruling will be significant. If the national minimum wage applies to sleep-in shifts, there is estimated to be a £400 million sector-wide liability which, if enforced, could lead to a serious risk of mass insolvencies and significant harm to the financial viability of the sector.

We will update you on the outcome as soon as the judgment becomes available.

National Living Wage rise

From 1 April 2020, the new minimum wage rates are:

  • National Living Wage for ages 25 and above: £8.72 (up 6.2%)
  • National Minimum Wage for 21 to 24-year-olds: £8.20 (up 6.5%)
  • For 18 to 20-year-olds: £6.45 (up 4.9%)
  • For under-18s: £4.55 (up 4.6%)
  • For apprentices: £4.15 (up 6.4%)

The government has pledged a National Living Wage of £10.50 for those aged over 21 over the next parliament, which equates to a 27% increase on the current National Living Wage.

Care staff are undoubtedly deserving of a significant pay rise, but it is essential that the pay rises are accompanied by sufficient increases in local authority fee rates. You should be gearing up for fee negotiations with funders now to ensure that these increased staffing costs are reflected in your fee rates.

The Good Work Plan

The Good Work Plan, the government’s policy paper in response to the Taylor Review, sets out what the government described as “the biggest package of workplace reforms for over 20 years”.

The key reforms due on 6 April 2020, are as follows:

Employment contracts

1. Obligation to provide a statement containing the particulars set out in section 1 of the Employment Rights Act to workers as well as employees. At present, the entitlement only applies to employees.

2. There will no longer be a minimum one-month service requirement before a worker or employee is entitled to receive a written statement of particulars. They must be provided on or before the first day of employment.

3. Requirement for additional particulars in the statement of terms including:

  • the days of the week the worker is required to work, whether the working hours or days may be variable and how they may vary;
  • any paid leave entitlement which is additional to annual leave and holiday pay, such as maternity leave or paternity leave;
  • details of all additional remuneration and benefits;
  • any probationary period, including any conditions and its duration; and
  • any training entitlement provided by the employer, including whether any training is mandatory and/or must be paid for by the worker.

These additional requirements will only apply to engagements starting on or after 6 April 2020. However, from that date, existing employees may request a written statement complying with the new requirements, which will need to be provided to them within one month.

Holiday pay reform

Holiday pay for staff who do not have fixed hours or pay (including those who work overtime or receive shift premiums) must be based on “normal remuneration”, rather than contracted hours.

Normal remuneration is currently calculated using a 12 week reference period to determine an average week’s pay. However, from 6 April 2020, the reference period will increase from 12 weeks to 52 weeks.

The government is aware that significant numbers of employers are still not calculating holiday pay correctly (and this is also our experience) with many racking up tens of thousands of pounds of potential liability. If you are not already compliant you need to think carefully about how you become so and we are here to help if you need it. We can support you with an audit of your current arrangements, so please do get in touch.

Staff agencies

The "Swedish derogation" in the Agency Workers Regulations 2010 (which currently allows employment businesses to avoid pay parity between agency workers and direct employees if certain conditions are met) will be removed.

With the current high rate of employment, the government says it is rare for agency workers to have gaps between assignments, and some agencies are using these contracts simply to reduce the pay bill. This is a big factor in the government’s intention to repeal the Swedish derogation, meaning that all agency workers will have a right to pay parity after 12 weeks.

By no later than 30 April 2020, temporary work agencies must provide agency workers whose existing contracts contain a Swedish derogation provision with a written statement advising that, with effect from 6 April 2020, those provisions no longer apply.

Key Information Documents will have to be provided to agency work-seekers containing prescribed information including the type of contract, the minimum expected rate of pay, how they will be paid and by whom (for example, by an intermediary or umbrella company), any deductions or fees that will be taken, any non-monetary benefits to which they will be entitled, any entitlement to annual leave and payment in respect of such leave, and an illustrative example of what this might mean for their take-home pay.

This requirement will take effect from 6 April 2020 and will be enforced by the Employment Agency Standards Inspectorate.

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