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What are the key April 2020 Employment Law changes?

11th Mar 2020 | Employment
What are the key April 2020 Employment Law changes?

Calculation of holiday pay – reference period


From 6 April 2020, the 12-week reference period for calculating holiday pay for workers or employees whose hours of work or remuneration fluctuates will be extended to 52 weeks.  This is for the purposes of calculating statutory holiday pay (i.e. the first 20 days for a full-time worker or employee).  The calculation does not need to be applied in respect of holiday entitlement over and above the statutory entitlement.


The purpose of the extension of the reference period to cover the 52-week period (or as many weeks as the employee or worker has been employed/engaged, if less than 52 weeks) is to ensure that workers who do not have a regular working pattern throughout the year are not disadvantaged by having to take their holiday at a quiet time of the year when their weekly pay might be lower.

As a reminder, the overarching principle when it comes to pay during periods of holiday is that pay should correspond to "normal remuneration", so as not to discourage workers from taking leave.


There have been a number of cases dealing with different payments including commission, bonus, overtime, etc. which have all concluded that, if these payments are paid regularly, they will usually need to be factored into holiday pay calculations in respect of holiday under the Working Time Directive (WTD) (i.e. the first 20 days for a full-time worker or employee).


We recommend that employers take steps to prepare for the change as soon as possible to ensure that their pay systems and processes are compliant with the requirement to calculate holiday entitlement as above in good time.


Written statement of terms


With effect from 6 April 2020 there will be changes to what information the employer will be required to provide employee and from when. Currently, employers must provide an individual with a written document which complies with the provisions of section 1 of the Employment Rights Act 1996 within two months of them commencing work for the employer.


From April, employers will be required to provide a written statement of terms on or before the first day of employment to both employees and workers. Except in some limited circumstances, this only applies to new employees and workers employed or engaged on or after 6 April 2020.


These written statements of terms must include:

⦁ the days of the week the worker will be working and whether working hours or days may be variable, with details of how they may vary

⦁ any entitlement to paid leave, including maternity leave and paternity leave

⦁ any additional remuneration or benefits

⦁ any probationary period, including relevant conditions and duration

⦁ any training provided by the employer which the worker is required to complete and any other required training that the employer will not pay for


We recommend that employers review and update their existing template contractual documentation and review recruitment processes to ensure that contractual documentation is prepared and issued to employees and workers on or before the first day of employment.




The Off-Payroll Working Rules (commonly known as IR35) are designed to address individuals deliberately paying reduced income tax and National Insurance Contribution (NIC) liabilities by engaging with employers through Personal Service Companies (PSC).


This can create what HMRC call “disguised employment”. If it were not for the intermediary PSC, would the individual be viewed as an employee and taxed as such? This is the vital assessment employers will have to undertake at the outset of any relationship with contractors and reassess for any contractors currently engaged. The test for IR35’s application is multi-factorial and similar to the test to determine employment status.


Employers should have carried out an initial assessment to all current engagements they have with contractors. Thought should now be turning to how to communicate the changes with your engaged contractors.


The exception to the change will be “small” businesses. A small business is defined in the Companies Act 2006 as a business which meets at least two of the following conditions in the relevant year:

⦁ Turnover of not more than £10.2 million

⦁ Aggregate assets on the balance sheet of not more than £5.1 million

⦁ Not more than 50 employees


For any assistance with these changes or further information on anything within this article, please do get in touch with us: call 0191 211 7777 or email [email protected].

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