Now You Must Give ALL Your Workers And Employees A Section 1 Statement24th Feb 2020
From April 6 2020 you as an employer must provide ALL your employees and workers with a section 1 statement – not just employees. You must provide it on day one of the employee/worker starting.
A section 1 statement details the minimum written terms that all employees (and soon all workers) in England and Wales are entitled to under the Employment Rights Act 1996.
Previously, employers had to provide all employees with a section 1 statement within two months of them starting work. But from April 6 2020, all employees and workers must have a section 1 statement from day one. It is their legal right.
What Is A Section 1 Statement?
A section 1 statement is a written statement of particulars for an employee/worker. It includes basic essential details such as:
- the name of the employer/business
- the name of the employee/worker and their job title
- a description of the work they will be expected to do and the start date
- if a previous job counts towards a period of continuous employment/work, the date the period started
- how much and how often an employee/worker will get paid
- hours of work (including details about overtime, working on Sundays or at night)
- any training requirements
- absence procedures
- holiday entitlement (and whether that includes public holidays), holiday pay
- where an employee/worker will be working and whether they might have to relocate
- if an employee works in different places, where these will be and what the employer’s address is.
As well as the principal statement, a written statement must also contain information about:
- how long a temporary job is expected to last
- the end date of a fixed-term contract
- notice periods
- collective agreements
- pensions (whether there is a contracting-out certificate in force under the Pension Schemes Act 1993)
- who to go to with a grievance – and how to complain about how a grievance is handled
- how to complain about a disciplinary or dismissal decision.
The statement does not need to contain information about sick pay, disciplinary/dismissal and grievance procedures. But it must say where this information can be found.
Who Is Affected? Who Will Have These New Rights?
All employers will be affected by the changes – no matter how small your business or how few employees/workers you have.
All employees and workers will have these rights. The self-employed will not.
In theory the changes are not retrospective. They will apply only to new hires on or after April 6 2020.
But in practice, ANY worker hired before that date will be able to ask for a section 1 statement (and you must provide it within one month).
Penalties For Non-Compliance
Employees who are denied their right to a section 1 statement can complain to an employment tribunal.
The issue is one of strict liability. The tribunal must fine the employer two weeks’ wages (unless there are exceptional circumstances which would make such an award unfair).
The tribunal can award four weeks’ wages if it considers this fair. A week’s pay is capped at the statutory rate (currently £525 but likely to increase in April 2020).
Multiply those fines by the number of workers affected and what started out as a clerical oversight can suddenly turn into a very expensive error.
Employees And Workers Abroad
Will any of your team have to work overseas for more than a month? If so, you must detail in their section 1 statement:
- how long they will be abroad
- which currency they will be paid in
- what additional pay or benefits they will receive
- any terms relating to their return to the UK.
You can provide this information in a separate document.
If you send an employee/worker to another country in the European Economic Area (EEA) then you must obtain the terms and conditions that are that country’s legal minimum for:
- working hours and rest breaks
- holiday entitlement
- minimum pay (including overtime).
Why Are These Section 1 Statement Changes Happening?
They are coming in as a result of the government’s Good Work Plan that was published in December 2018.
Changes under the Good Work Plan also include amended rules on holiday pay, equal pay for agency workers and tougher penalties at employment tribunals.
What Should Employers Do?
Review your existing section 1 statements. Furthermore, review the section 1 statement information contained in your existing employment contracts; make sure everything is up to date ready for April 6 2020.
Be prepared for any existing employees and workers who have not received section 1 statements to exercise their new rights.
Start work on this now. The administrative burden is likely to be much greater than you expect!
Other Important Considerations
Now is a good time to remind you that employees need not have a written contract to be considered as employees under the law. A contract can be oral/verbal – or even simply ‘implied’ by the nature of the working relationship.
Employee status depends on three key factors:
- The person must do the work – they cannot send someone in their place
- The employer is obliged to provide the work; the employee is obliged to accept the work
- The employer has some control over how the employee does the work.
Workers are people who work for you but do not meet these ‘employee’ criteria and are not self-employed. Workers do not have as many rights as employees but they do have some, including:
- protection from unlawful discrimination
- entitlement to the National Living Wage and National Minimum Wage (and protection from unlawful deductions from wages)
- protection under health and safety regulations
- the right to join a union.
Get Expert Legal Advice On Employment Law
Employment rights are a complex area of the law. Getting your paperwork right as an employer is absolutely vital if you are to avoid unwittingly falling foul of regulations.
Our employment law solicitors can draft section 1 statements for you and amend your contracts to ensure they contain the correct mandatory information.