Back in 2017, the government published a review into working practices in the modern economy, called the Taylor Review. This made 7 key recommendations to promote ‘good work’. These were:
- Good work for all;
- Dependent contractor status (for the likes of Uber and Deliveroo);
- A National Living Wage;
- Avoiding increasing the cost of employing someone;
- Responsible corporate governance;
- Skill development for employees; and
- A healthy workplace.
Off the back of this, the Good Work Plan has been formed. It is important to stress that this is merely a plan at this stage. It has not yet been implemented, and there is no date set for its implementation.
The plan aims not just to maintain workers’ rights in this uncertain period where Brexit looms in the background, but to enhance them. In particular, the government has focused on the following areas:
Swedish derogation refers to an exemption which allows agency workers to be paid less than permanent employees in the same role. The Good Work Plan proposes to repeal this exemption in the future to ensure that agency workers will be paid the same for the same work.
There are two proposed changes in this area. First, the particulars of employment must be provided much earlier. At the moment, only employees with one month’s service have a right to a written statement of employment particulars (which must be provided within 2 months). The new proposal extends this right to workers from their first day on the job.
A second proposed change is that workers may request a more predictable and stable contract after 26 weeks. It appears that the mechanism for doing so will be similar to that for flexible working, and a worker could request a minimum number of hours or fixed working days. This would provide more clarity for workers on zero-hour contracts. However, it should be noted that the government is not proposing to ban zero-hour contracts in any way, shape or form.
The amount of time required to break a period of continuous service is proposed to be extended. Currently, a break of 1 week between ending a role with a company and then beginning a new role will break continuous service. However, the Good Work Plan proposes to extend this to 4 weeks to provide better protection for employees. Employers should bear in mind that this could mean that someone intermittently working once a month could therefore gain continuous service.
The Taylor Review highlighted that there were a number of employers and employees who were unclear on holiday pay entitlement. As such, new holiday pay guidance will be released which will provide examples and include a holiday entitlement calculator. In addition, the “reference period” for determining an average week’s pay for holiday purposes is proposed to be increased from 12 to 52 weeks.
Umbrella companies act as intermediaries between employers and workers, often being used as payroll for companies. However, this can create a level of uncertainty for workers as they may be unclear who their employer is and, therefore, struggle to enforce their rights. Therefore, the Good Work Plan proposes to regulate these companies more heavily, investigating and sanctioning them properly for breaches of workers’ rights.
There are major plans to invest in reforming the court and tribunal system to make it simpler for employees to pursue employment tribunal claims and allow easier enforcement of unpaid awards. In addition, where an employer is found to have breached its obligations the tribunal may impose additional penalties. Currently, a tribunal can award an aggravated breach penalty of £5,000. However, the proposal is to increase this to £20,000.
What does this mean for you or your business, and what should you be doing now?
Watch out for our employment updates because this plan will eventually be rolled out in changes to the current legislation. It is currently expected that the vast majority of proposed changes will be implemented by April 2020. Nevertheless, preparation for the above is key.
If you would like any further information on the issues raised above, please contact Heyma Holmes on 01242 248253 or email email@example.com.
The link to the report can be found HERE.
These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.