The summer holiday season for 2023 is fast approaching its end, and whilst it can be seen to many businesses as a quieter time, due to staff annual leave, it provides a great opportunity to turn to housekeeping and admin, which often falls by the wayside at other times of the year.
One of the key housekeeping jobs for employers is ensuring that their employment contracts and policies are up to date and reflective of the current legislation in place. This could mean an overhaul to ensure that there is clarity surrounding new legislation or implementing new policies to provide greater benefits to employees. We are here to help and have set out below the most recent amendments to legislation, proposed changes on the employment law horizon, as well as our general top tips on how to keep your employment contracts and policies looking great and in line with requirements.
Legislation which relates to employment is one area which seems to be everchanging and updating and it is why it is key for employers to keep their eyes peeled on the developments to ensure policies and contracts remain compliant. Falling foul of this could lead to complaints and in some cases, claims. In brief, some of the key updates of 2023 so far are:
- On 1 April there was an increase in the National Minimum Wage (“NMW”) – as employers will be aware, the NMW varies depending on age group, and so now the following wages apply:
- £5.28 for apprentices
- £5.28 for under 18s
- £7.49 for 18–20-year-olds
- £10.28 for 21–22-year-olds
- £10.42 for those aged 23 and over.
- On 2 April there was an increase in statutory sick pay, as well as statutory parental pay, and parental bereavement pay. Whilst all employers have the same statutory sick pay, the amount that is actually paid to an employee for each day they are absent from work due to sickness depends on the number of ‘qualifying days’ they work each week. The GOV.UK website has a very helpful ‘Statutory Sick Pay Calculator’ to help employers work out an employees sick pay: Calculate your employee’s statutory sick pay – GOV.UK (www.gov.uk). Parental leave pay has increased to £172.48 from the year before.
- On 6 April there was an increase in statutory redundancy pay caps which apply. The weekly pay is now capped at £643 (an increase of £71 on April 2022 cap), meaning that the maximum statutory redundancy pay an employee can receive is £19,420 (this would be if they had 20 years employment since the age of 41).
- The Employee Relations (Flexible Working) Bill achieved Royal Assent in July 2023 (although we will likely not see it come into force until Spring 2024) which means that employees will have greater flexibility over where and when they work. Workers now have the right to request flexible working from day one of their job and can make the statutory request twice within a 12-month period; employers will be required to consider the request and provide a reasonable and fair reason before rejection. It will encourage greater discussion between employers and their employees in respect of flexible working, which is now key in the modern-day workforce.
- In May the Neonatal Care (Leave and Pay) Bill, Protection from Redundancy (Pregnancy and Family Leave) Bill and Carer’s Leave Bill received Royal Assent; all providing greater protection for parents and carers. In brief, employed parents who have children admitted into neo-natal care will be able to receive up to 12 weeks of paid care leave; this is in addition to other leave and pay entitlements. There is also now an extension of protection to redundancy for pregnant women and new parents to cover pregnancy and the period of time after they return to work. Finally, the Carer’s Bill provides new entitlement for unpaid carers assisting those with long-terms care needs, to receive a week of flexible unpaid leave a year; this is to ensure that unpaid carers have a better balance between their employment and caring responsibilities.
There are several proposed bills which, if approved, will have a big impact on the employment and HR sphere. The main focal point this year has been on the Retained EU Law (Revocation and Reform) Bill; the Bill raised a number of concerns in relation to the impact on employers and employees alike, but what has been announced is that all EU law will remain binding on the UK unless the Government expressly provides its intention that it will not be binding. Some main changes resulting from this are to the Working Time Regulations, Transfer of Undertakings (TUPE) Regulations 2006 and Non-Compete Clauses. We wrote a comprehensive article on these announcements in May 2023: The Retained EU Law (Revocation and Reform) Bill – Key Update
Quick Top-Tips for Employment Contracts/Policies:
- Flexible working remains the norm for many since the Covid-19 pandemic, but it is still a key point to focus on in relation to employment contracts. It is paramount that contracts and policies are created and/or updated to reflect how flexible working is dealt with. Terms to check within the employment contract include the employees’ place of work, what hours they will be working, confidentiality, data protection, and how an employee will be managed. If an employee works remotely from home for 2 days a week, for example, it is best to define this as an express term to avoid any misunderstandings. When considering the use of flexibility clauses in contracts employers need to ensure that the changes are reasonable, that the employee is informed of the proposed change/s and that reasonable notice is provided. It is key to review and consult with employees on these changes/implementations, to reduce the risk of breach of contract claims and/or constructive dismissals.
- If there is a TUPE transfer, a contract can only be changed if the terms and conditions of the employee’s employment is improved, this may be by way of increasing their holiday entitlement, for example, or, if the business needs restructuring, which would be considered an economic, technical or organisational (‘ETO’) reason.
- Non-competes are a form of restrictive covenant, and they may be difficult to enforce if they are not drafted well – they must be clear, specific and time-restricted. They can be tricky clauses to incorporate and require some consideration. It is also worth noting the intention of the UK government to limit the length of non-competes to only being 3-months. It may be worth considering applying this update to contracts to pre-empt this change.
- Handbooks can be helpful tools to set out organisation policies, and they can be referred to in an employment contract. Handbooks may, for example, include a general employee handbook, which sets out the main policies and procedures which staff should be aware of when working for the organisation (such as dress codes), or disciplinary procedure and grievance procedure handbooks. It is typically recommended that these types of handbooks are only referred to in an employee’s contract, as opposed to be incorporated in, to allow for greater flexibility when changing the terms.
- When making changes to employees’ contracts, it is key to consider whether the changes could be deemed to unfairly benefit them at the expense of another, which could lead to a discrimination claim. For example, has an employer refused a request for flexible working for a female employee, but her male counterpart, with the same experience and the same role, been allowed the same request; this could give rise to a sex discrimination claim. As mentioned above, all requests/changes must be dealt with fairly and reasonably.
This is not a substantive list of what should be considered when drafting or updating employment contracts and/or policies but should provide some food for thought as we come to the end of the summer holidays. If you are an employer or employee needing advice on your contracts and/or policies, please do not hesitate to contact our specialist employment team at email@example.com, or by telephone.