Employment Statements: Are You Compliant?

This article serves as a reminder for employers of what documents they are required to have in place for their work force. Most employers will be aware of the need to provide their employees with a written statement of employment particulars but many will be unaware of a number of changes that were introduced in April 2020. These changes largely went unnoticed, coming a week after the first Covid lock-down and the furlough scheme were announced.

Two years on, it is worth reminding employers of these important changes as, in my experience, many are leaving themselves exposed, not just to potential claims for compensation but also, to the risk of employment tribunals deciding for them what their employment terms should be.

For the purposes of this blog a “written statement of employment particulars” will be referred to as a Section 1 Statement, as the right comes from section 1 of the Employment Rights Act 1996.

Who is entitled to a section 1 statement?

Prior to 6 April 2020, only “employees” had such an entitlement. From 6 April 2020 that right was extended to “workers” in addition to employees.

“Worker” status is a hybrid category somewhere between employment and self-employment and includes those who work under a contract, whether express or implied, oral or in writing, where an individual undertakes to perform personally any work or services for another party to the contract who is not a client or customer of any professional business being undertaken by the individual.

Whilst workers do not have protection against unfair dismissal, or the right to receive a redundancy payment, they do have important protections such as the right to paid annual leave, the national minimum wage and a right not to be subjected to workplace discrimination. The following have been found by courts and tribunals to fulfil the definition of “worker”: sub-contracted labourers in the construction industry; commission-only salesmen, doctors and dentists; salaried and fixed profit-share partners in a general partnership or LLP; actors; Uber drivers; plumbers; cycle couriers and foster carers. In addition, zero hours contractors and bank staff will almost certainly be deemed to be workers.

When must the section 1 statement be given

Prior to 6 April 2020 a Section 1 Statement could be given up to 2 months after the start of employment. However, for all new employees from 6 April 2020, the Section 1 Statement must be given not later than the first day of employment.

Must the section 1 statement be in any particular form?

Some of the particulars must be contained in a single document given on day 1. Others may be contained in a reasonably accessible document referred to in the Section 1 Statement, such as a staff handbook, and others may be given in instalments over the first two months of employment or engagement.

What particulars must be given in a section 1 statement?

The following particulars must be included in a single document:-

  • Names of the employer and employee or worker
  • Date when employment or engagement began
  • In the case of an employee, the date on which any period of continuous service began (taking into account any employment with a previous employer, for example, where employment transferred under TUPE)
  • The scale/rate of remuneration or method of calculating remuneration (including commission/bonus schemes whether contractual or otherwise)
  • Intervals at which remuneration is paid
  • Terms and conditions relating to hours of work, including normal working hours, days of the week when work is required and whether such hours or days are variable
  • Terms and conditions relating to holiday entitlement, including public holidays, holiday pay, the holiday year, arrangements for notification and approval of holiday and for carrying holiday forward to subsequent years
  • Length of notice to be given by either party to terminate the contract
  • Job title or a brief description of the work, the employee or worker is employed or engaged to do
  • Whether it is a fixed term contract and, if so, the date it is due to end
  • Any probationary period, including conditions and duration
  • Place of work or any terms as to mobility
  • Special conditions if the employee or worker is required to work outside the UK for more than a month
  • Details of any mandatory training and who is expected to pay for the training
  • Any other benefits provided by the employer, eg company car, car allowance, private healthcare, life assurance, permanent health insurance, etc

The following particulars may be contained in a reasonably accessible document (for example, in a staff handbook):

  • Terms and conditions relating to incapacity for work, including sick pay
  • Terms and conditions relating to other types of paid leave
  • Terms and conditions relating to pensions
  • Any non-mandatory training entitlement

Particulars that may be given in instalments over the first two months:

  • Terms relating to pensions
  • Any collective agreements or grievance procedures (including disciplinary rules and arrangements for an appeal)

What should happen if the particulars change:

Naturally, the particulars of employment may change from time to time. Where this happens, a Section 4 Statement must be given at the earliest opportunity and, in any event, not later than one month after the change takes effect. The Section 4 Statement must set out particulars of the change only. There is no need for a new Section 1 Statement to be issued or the change can simply be confirmed in a letter or even an email.

How are these rights enforced?

An employee or worker can make a complaint to an employment tribunal where the employer fails to provide a Section 1 or Section 4 Statement or where the statement is inaccurate or incomplete. There is a right to compensation (of up to 4 weeks’ pay), if the claim can be “piggy-backed” onto another complaint. However, potentially more important is the fact that the tribunal has the power to determine what particulars ought to have been included in the statement itself and this can have an impact upon the rights of the entire work force.

I recommend that all employers review their employment contracts and Section 1 Statements for their entire work force. Whilst many employers have written contracts in place, these are often incomplete or out of date and many categories of workers, such as zero hours staff, frequently slip through the net.

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