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Is Now A Good Time To Update Your Employment Contracts?

Reasons to choose Wilson Browne

April is a popular time for pay rises as it typically marks the beginning of the financial year for many companies.

It’s also the time when there’s a clearer picture of financial performance over the past 12 months so decisions about how to allocate their resources, including salary increases for their staff for its next financial year can be made.

Documenting pay increases

Do you have to issue a new employment contract when increasing an employee’s pay?

No – you do not have to issue a new contract; a simple letter to the employee outlining their new increased salary will do. That’s even if your contracts are not s.1 compliant.

However, given that any contract of employment predating 6 April 2020 is unlikely to be legally compliant, this may be a good time to review and issue new compliant contracts. This can tie in with the salary increase notification which can often make for an easier roll-out exercise.

What changed in April 2020?

On 6 April 2020, the information that employers are now required, by law (Section 1, Employment Rights Act 1996) to provide in writing includes:

  • the days of the week the worker is required to work, whether the working hours may be variable and how any variation will be determined;
  • any paid leave to which the worker is entitled (such as maternity or paternity leave);
  • any other benefits provided by the employer that are not already included in the statement;
  • any probationary period, including any conditions and its duration; and
  • any training entitlement provided by the employer, including any training that is mandatory and any training that the worker must bear the cost of.

What if my contracts don’t contain this information?

 It is important to note the changes to the law in 2020 was not retrospective. Except for limited circumstances, organisations are obliged only to issue compliant contracts to employees and workers who were engaged on or after 6 April 2020.

If you have any questions regarding how to update your employment contracts to ensure they are s1 complaint, feel free to give us a call on 0800 088 6004 for a non-obligatory free initial consultation.