Section 1 of the Employment Rights Act 1996 sets out the minimum information that an employer must give an employee in relation to their working terms and conditions. Section 1 statements are generally given in the form of a contract of employment. Significant changes are being made to the rules on section 1 statements from 6 April 2020.
Following the Taylor Review in July 2017 and the Good Work Plan published in December 2018, critical changes are being made to the rules on section 1 statements. These will apply to any person starting work on or after the 6 April 2020. Existing employees can also request a new section 1 statement.
The key changes are as follows:
Extension to workers
The obligation on employers to provide a section 1 statement currently extends to all employees. The new rules require that employers provide a section 1 statement to workers as well as employees.
Day one rights
Currently, employers are obliged to provide the list of information set out in section 1 Employment Rights Act 1996 (ERA) within two months of the employee commencing employment. After April 2020, the section 1 particulars must be provided on or before the date on which employment starts (i.e. they become day 1 rights).
There are a limited number of exceptions where information can still be provided within 2 months of the start of employment and can be provided in instalments, if the employer prefers. These exceptions include information about pensions, collective agreements, any training entitlement (not including mandatory training, even if paid for by the worker) and information about disciplinary and grievance procedures.
After April 2020, the section 1 statement will need to contain the following additional pieces of information:
- Working schedule - the days of the week the worker is required to work, whether the working hours are variable and how any variation will be determined;
- Paid leave;
- Details of all remuneration and benefits;
- Probationary period (if applicable); and
- Any entitlement to training provided by the employer and whether this is mandatory and/or paid for.
The ERA allows a limited number aspects of the section 1 statement to be given in another reasonably accessible document, for example an employee handbook or Intranet. This will include, from April 2020, terms relating to incapacity and sick pay, any paid leave entitlement which is additional to annual leave and holiday pay (such as maternity and paternity leave), particulars of training provided by the employer, pension schemes, notice periods and certain information about disciplinary and grievance procedures. Therefore, technically, under the amended section 1, employers will be required to include details all other items in their section 1 statements (including, for example, all details of benefits).
No minimum service
Currently employers are obliged to provide employees with a section 1 statement where the employee’s employment is to continue for more than one month. After April 2020, there will no longer be a minimum service requirement and all workers will have a right to a written section 1 statement.
Under the existing law, employees can only bring a tribunal claim for the failure to provide a section 1 statement if they are also bringing another specified claim in the tribunal (including unfair dismissal claims). The compensation for failure to provide a section 1 statement is capped at four weeks’ basic pay, currently £2,100. As part of the government consultation, there was consideration as to whether there needed to be a stronger remedy in place. However, no changes are going to be made on this point in April 2020.
With less than six months to go until this new law comes into effect, employers would be well advised to start thinking about how they are going to prepare for and implement these changes. The most significant items to consider are the additional obligations to provide statements to workers and to provide statements on day one. These obligations apply to new joiners after 6 April 2020, but current employees can request to have a newly compliant statement as well, which must be provided within 1 month of a request.