In December 2018, the Government set out the reforms it planned to introduce as part of the Good Work Plan; its response to the Taylor review. Here I examine the main proposals and implications.
The Good Work Plan promised an ambitious programme of work to deliver on the Government’s “vision for the future of the UK labour market” and has already led to changes in legislation (right to payslips for all workers, naming and shaming employers who do not pay tribunal awards). While Brexit appears to have delayed the formal introduction of any legislation, the overall aim of the plan is to strengthen employment rights and improve working lives.
The Taylor Review, in particular, focused on the implications of new forms of work, the rise of digital platforms and the impact of new working models and addressed worker status, holiday pay rights, agency workers, tribunal and state enforcement and much more.
To help employers prepare, I have summarised the current state of play and outlined practical workplace implications in the table below.
Please note some areas are still subject to Government consultation.
Legislate to improve the clarity of the employment status tests; consider how tax and employment status can be aligned; provide better guidance
No immediate change – we expect further consultation on the status proposals
Any change is expected to focus on the degree of control exercised over workers and the reality of substitution clauses. This could have a significant impact on employers with casual, flexible workforces
Agency workers (AW)
After 12 weeks of service, an agency worker is entitled to receive the same level of pay as a permanent worker, unless the agency worker opts out of this right and instead elects to receive a guaranteed level of pay between their temporary assignments (often referred to as “the Swedish derogation”).
This opt-out will be removed (proposed to take effect in April 2020) because often agency workers are financially worse off taking the Swedish derogation route.
This has the potential to add costs for employers using agency labour
The reference period used to calculate holiday pay will be extended from 12 weeks to 52 weeks, which is an important development for those who work variable hours. Currently a worker may get different rates of pay during holidays taken, depending on how many hours they worked in the three months previous.
Employers will need to ensure their records are kept back to at least 52 weeks.
For workers, it will allow greater flexibility in choosing when to take holiday, particularly for those in seasonal or atypical roles that limit some workers from benefiting from their full holiday pay entitlement.
Pregnancy and maternity leave
Extend redundancy protections to pregnant women, maternity returners and potentially beyond (e.g. to those taking shared parental leave)
Awaiting the Government’s response to a recent consultation
If adopted, employers will need to give wider redundancy protection.
Right to request a more predictable and stable contract
This new right will mean an employee can request a more predictable and stable contract after 26 weeks of employment.
Examples of what might be requested include a guaranteed minimum number of hours and certainty as to the days on which they will be asked to work.
No immediate change – consultation required first.
This new development will predominantly benefit individuals who are employed as casuals or on zero-hour contracts. An employer will have three months to make their decision on any such request.
Break in continuous service
Presently, a gap of just one week can break an individual’s continuity of service. Therefore, despite regularly working on and off for the same employer over a long period of time, an individual may not build up any significant length of service.
No immediate change – consultation required first.
This will help those employees who work on a sporadic or casual basis to qualify for more employment rights (such as the right not to be unfairly dismissed or the right to statutory maternity pay), which require a particular length of service.
Information and consultation arrangements
Information and consultation arrangements give employees the right to be involved in workplace discussions about an agreed list of topics, such as redundancy proposals.
Currently, support from at least 10% of the workforce is needed for a successful request, however, this will be reduced to 2% (although the 15-employee minimum threshold will remain).
Statement of basic terms
A day one right for all workers to receive more detailed particulars of their terms and conditions
This is a new entitlement that should bring clarity for many workers regarding their contractual terms.
Employers currently have two months in which to provide the written particulars to their employees. A “day-one” right will ensure that both parties are clear about the main contractual terms from the outset of the relationship.
Further, additional details will need to be included in the documentation, such as details of any paid leave (like maternity or paternity leave), the duration and conditions of any probationary period and information about entitlements to any benefits.
Employers should review and update their standard contracts for workers and employees.
From April 2020, employers must ensure contracts are issued before or by day 1 of employment.
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