Another look at Section 1 statements
It has been over a year since the new Section 1 requirements came into force. Following on from our initial Employer Perspectives update in March 2020, this post looks at some frequently asked questions and practical tips on dealing with some of the more tricky requirements.
A quick recap of the law
The law requires that employers now provide written statements of key employment terms to employees and workers whose contracts started on or after 6 April 2020.
In particular, the statement should give detail in writing about any paid leave to which they are entitled; which days of the week they are required to work and, if there can be any variation to this, how that variation will be determined; details of all benefits that will be provided by the employer; details of any probationary period, including duration and any conditions; and any training entitlement provided, including whether it is optional/mandatory and how the cost of this training is to be covered.
This is a “Day 1 Right” and so employers will, in most cases, need to ensure that they are providing employees/workers with written particulars on or before the date on which work begins.
Frequently asked questions
1. Does the obligation apply retrospectively?
No, the obligation only applies to employment contracts entered into after 6 April 2020. However, there are instances where employers would need to provide a compliant statement to employees and workers whose contracts started before 6 April 2020. Firstly, these employees and workers are entitled to request a newly compliant Section 1 statement. If they do so, employers will need to provide this within one month of such a request. Secondly, if there are any changes made to any of the new information required to be given or the employee or the worker is re-engaged, then an updated Section 1 statement would also need to be provided.
2. If we include a statement specifying the training requirements, and these requirements subsequently change, do we need to issue an amendment each time this occurs?
If requirements subsequently change, this would technically require employers to issue new written statements. Under the Employment Rights Act 1996, if there is any change to any of the required statutory particulars of employment, the employer must give the employee or worker a written statement containing details of the change at the earliest opportunity and, in any event, no later than one month after the change. We understand that this can be onerous, particularly with large workforces, which is why we suggest taking the approach of listing the key mandatory training courses and then letting employees know further details will be provided regarding subsequent requirements.
3. What are the consequences for non-compliance?
Employees can only bring a tribunal claim for failure to provide a full section 1 statement if they are also bringing another specified claim in the tribunal, and that other specific claim is successful. The compensation for failure to provide a section 1 statement is capped at two or four weeks’ basic pay, currently £1,088 or £2,176, respectively.
Some practical tips
- Don’t forget that the workers are now entitled to a section 1 statement.
- Ensure that your contracts are compliant with the section 1 requirements – review and update your contracts of employment and worker contracts so that they contain all the information they need.
- In particular, consider whether there have been any changes to the key particulars since April 2020 (particularly as certain particulars may have changed as a result of Covid-19). Ask yourself whether you need to make any changes to any reissued contracts.
- Consider pragmatic options for the more burdensome provisions of section 1, as noted at 2 above in terms of training requirements.
It is likely that employers will continue to take a pragmatic view of section 1 requirements, given the low financial penalties. However, reputation as an employer that complies with the most basic of legal requirements is important, regardless of financial penalties. At a time when many clients are refreshing contracts to reflect post-COVID changes, this a good opportunity to ensure that your employment and worker contracts are section 1 compliant.