April 2020 Employment law update

  1. Calculating Holiday pay for workers with no fixed pay or hours

From 6 April 2020 the reference period for calculating holiday pay for workers with variable hours is increasing. Currently, where a worker has variable pay or hours, their holiday pay is calculated using an average from the past 12 weeks in which they worked. This reference period is being increased to 52 weeks.


If a worker has not been in employment long enough to build up 52 weeks’ pay data, employers should calculate based on the number of complete weeks’ data they have.


To prevent employers having to look back more than 2 years to reach 52 weeks’ of pay data, there will be a maximum period of 104 weeks. In this case the reference period is shortened to however many weeks are available in this 104-week period.

  1. IR35 liability postponed to April 2021

You may be aware that, due to economic measures introduced in response to the Covid-19 pandemic, the IR35 reform applicable to private companies is being postponed until 6 April 2021.


As a reminder, IR35 is the anti-avoidance tax legislation designed to tax disguised employment at a rate similar to employment. It will apply where contractors are employees in all but name (including contractors operating through an intermediary, such as a limited company, who, but for that intermediary, would be an employee of their client).


On 27 February 2020, HMRC confirmed in its compliance approach to the IR35 reforms that it will not open new investigations into tax years before 6 April 2020. We anticipate this will be updated to April 2021 to reflect the deferred start date. This is a welcome safeguard to those who do switch to an employed status from April 2021.


  1. Bereavement leave and pay

From 6 April 2020 parents will be entitled to parental bereavement leave.

Employees who are unfortunate enough to lose a child under the age of 18 (or who suffer a stillbirth from 24 weeks of pregnancy onwards) will be entitled to two weeks' leave. This can be taken in one block or as two separate weeks and can be taken at any point up to 56 weeks after the child’s death or still birth.

Bereavement leave will be eligible to all employees, there is no need for an employee to have been employed for a continuous period to qualify.

Employees may also qualify for statutory parental bereavement pay (SPBP). However, this will be conditional on a period of continuous employment (at least 26 weeks) and only applies to employees with average earnings in excess of the lower earnings limit (currently £118 for 2019/2020). SPBP will be calculated in the same way as paternity pay (the lowest of £148.68 for 2019/2020 or 90 per cent of average weekly earnings).

  1. Written particulars of employment

From 6 April 2020, employers must provide written statements to “workers” as well as employees. The rationale for the changes is to provide employees and workers with more job security.

Employers must implement the changes for all new employees and workers on the payroll, except genuine self-employed independent contractors (for the avoidance of doubt, new statements are not needed for existing employees or workers.).

Employers must provide the following additional information in their s1 statements: days of the week required to work (and whether days or hours may vary); paid leave entitlement other than annual leave and holiday pay (e.g. enhanced maternity/ paternity leave); any probationary period (including duration and any conditions); any training entitlement provided by the employer (including whether any training is mandatory and/or must be paid for by the worker).

New employees and workers are now entitled to the above information from day one of employment, rather than after a month.

However, certain terms can be provided in a supplementary statement if given within two months (e.g. pensions; collective agreements; non-mandatory training requirements and certain information about disciplinary and grievance procedures).

Where an employer fails to provide a section 1 statement or provides an inaccurate or incomplete statement, an employee may complain to an employment tribunal.

Where they have no other successful substantive claim, their sole remedy will be a declaration. Otherwise, an employee can “piggy back” a section 1 claim onto another claim (e.g. for unfair dismissal or discrimination). Provided another claim is successful (even if no compensation is awarded) the tribunal must make an award of the minimum amount (two weeks' pay) unless there are "exceptional circumstances" which would make such an award "unjust or inequitable" (section 38(5), EA 2002). The tribunal may award the higher amount (four weeks' pay) if it considers it just and equitable in all the circumstances.

  1. Agency workers

Currently, agency workers are entitled to be paid the same rates as permanent employees after 12 weeks, unless they are working under specific contractual arrangements under which they receive a minimum level of pay between assignments (known as the ‘Swedish derogation’ model).

From 30 April 2020, this distinction will be abolished and the right to comparable pay will apply to all agency workers after 12 weeks. By this date, temporary work agencies must provide agency workers whose existing contract contains a Swedish derogation provision with a written statement advising that, with effect from 6 April 2020, those provisions no longer apply.

In addition, temporary work agencies must provide agency workers with a “Key Information Document” including information on the type of contract, the minimum expected rate of pay, how they will be paid and by whom.


Cater Leydon Millard

26 March 2020

This briefing note provides general guidance only and expert advice should be sought in relation to any particular circumstances.