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Prepare now for new work-place legislation coming into effect in October


15th August 2007

The key legislation which is coming into effect in October is:


1. Companies Act
Many important elements of the new Companies Act come into force in October 2007. These include new statutory rules on the responsibilities of company directors which will have important implications for directors of companies of all shapes and sizes. The new Act takes the most important common law principles and sets them down in legislation – the intention being to make the law more accessible to non-experts and in the process save companies the expense of buying in specialist advice from outside. The main common law-derived duties now set out in legislation include the fact that directors must respect the terms of their company’s constitution and act within their powers, they must avoid conflicts of interest and should not accept benefits from third parties.


2. Minimum statutory holiday entitlement increases to 24 days
From October 1, the statutory minimum leave entitlement will go up from 20 days to 24. In April 2009 the figure goes up to 28 days. Companies will still be able to offer payment in lieu of the additional holiday entitlements but only up to April 2009: after that date, the full entitlement must be offered. The new regulations will be extended to part-time workers on a pro-rata basis.


3. Upgrade to the National Minimum Wage Regulations
New regulations increase the rate of the national minimum wage on 1 October. The adult rate, for workers over the age of 22, goes up to £5.52 per hour.  The development rate, for workers between 18 and 21, increases to £4.60 per hour while the rate for 16-17 year-olds goes up to £3.40.