Changes to Section 1 Statements - are you ready?

Are you ready for the changes to section 1 statements?

by Eleanor Rhodes, Capsticks

The Government has introduced a number of important changes to the minimum written terms that all employers must provide to workers and employees in England and Wales.  The changes will come into force on 6 April 2020.  These minimum written terms are required by the Employment Rights Act 1996 and are often referred to as “section 1 statements”.

What information must be included in a section 1 statement?

• the names of the employer and employee;
• the date the employment starts and period of continuous employment;
• pay (or method of calculating it) and interval of payment;
• hours of work;
• holiday entitlement and pay;
• the employee's job title or a brief description of the work;
• notice periods;
• place of work;
• certain information on disciplinary and grievance procedures; and
• whether there is a contracting-out certificate in force under the Pension Schemes Act 1993.

The following information can be provided within the two months of the start of employment / engagement:

• terms relating to working outside the UK for a period of more than one month;
• terms as to length of temporary or fixed term work;
• pensions; and
• collective agreements.

Changes to the information included in section 1 statements

In addition to the existing written terms which must be provided in a section 1 statement, from 6 April 2020 employers will also need to provide the following information:

• the days of the week the employee or worker is required to work, whether the working hours are variable and the detail of any variation;
• any paid leave to which the employee or worker is entitled (such as maternity or paternity leave);
• whether a probationary period applies, its duration and any conditions attached;
• any other benefits provided by the employer that are not already included in the section 1 statement; and
• any training provided by the employer, and whether any part of that training which the employee or worker is required to undertake must be paid for by the employee or worker.

Employment status

Employers are currently required to provide this information to employees, but after 6 April 2020, the right is also to be extended to workers.

Timing

The current requirement is that section 1 statements must be provided within two months of the start of employment or the worker’s engagement.  From 6 April 2020, section 1 statements become a “day one” right for employees and workers meaning that the statements must be provided on or before the first day of employment / engagement.  Some information can be provided within the subsequent two month period, e.g. signposting an employee or worker to where the disciplinary and grievance procedure are available.

Application

The changes are not retrospective, and only apply to new recruits who commence on or after 6 April 2020.

How can employers prepare for the changes?

Ensure that contracts for all workers and employees who commence employment / engagement on or after 6 April 2020 include the new changes. Employers should be mindful when making changes to contracts, to ensure that non-contractual terms are not inadvertently converted to a contractual term.

• Update HR professionals and managers so that they are aware of the change and implementation date and do not use old version statements in error;
• Take the opportunity to carry out a wider review and update of your organisation’s template contracts to ensure that they are fit for purpose;
• Take timely advice on any specific issues that might arise within your organisation as a consequence of these changes e.g. how to address variable shift patterns in the statement for shift workers on variable rotas.

What happens if an employer doesn’t comply?

Employees and workers cannot bring freestanding claims for a failure to provide a compliant section 1 statement.  However if an employee or worker brings a successful claim in the Employment Tribunal on different grounds (for example for unpaid wages, discrimination or unfair dismissal), and they successfully establish that they have not been provided with a compliant section 1 statement, the employee or worker may be awarded an additional 2 to 4 weeks’ pay.  Any award is subject to a cap, which is currently £525 per week but will increase slightly on 6 April 2020.

Although the financial penalty for breaching this requirement in one case is relatively low, there is a risk that if a large workforce brought claims as part of other group litigation, the overall costs could be significant.