Is your contract of employment compliant?

The section 1 statement is the basis of all employment relationships and it is highly unusual that significant change arises in the law to affect this. However, in 2020 this is exactly what happened. With the return to more normal patterns of working, now may be the ideal time to review your contracts of employment to ensure that they meet the necessary up-to-date legal requirements.

Since the introduction of the 1996 Employment Rights Act, employers have been required to provide a certain amount of information to their employees within two months of commencing employment. This is often referred to as the ‘Section 1 requirements’ in reference to the section of the Act that brought it into law. It is common practice for this information to be contained within the contract of employment.

On 6th April 2020, the information required to be provided by employers under section 1 changed. The requirements for the statement have now been expanded to incorporate several additional points, the key components of which are highlighted below:-

The section 1 requirements have been extended to include workers as well as employees. Workers are defined as those individuals who undertake work or provide a service for benefit under a contract or otherwise and are not classified as self-employed.

Section 1 information must be provided either before or on the first day of employment.

The section 1 statement must additionally now include:-

• Details of the probationary period and subsequent review conditions
• Paid leave availability and conditions
• Details of all remuneration and potential benefits
• Greater detail on working hours and days and how variations may be determined
• Training entitlement and provisions

Whilst a claim for compensation for failure to issue a section 1 statement can only be made as a secondary claim to a primary employment tribunal claim, that does not mean to say that there will be no penalty imposed for that failure.  At present, the compensation for failure to provide a section 1 statement is four weeks of the employee or worker’s basic pay, capped at £2,100.

Of course, a s1 statement is only a statement of the key conditions of the employment and we would always recommend that employers put in place a full contract of employment in order to protect the business on a much wider range of issues, including protection of confidential information, limitation of liability for payments upon termination, restricting post termination activity and use of intellectual property, amongst many other things.  If you would like our assistance with drafting contracts of employment tailored to your business and staff, contact the Employment Team and we would be more than happy to help.