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. Katee Dias examines the main proposals.
Numerous employment law reforms were set out in the Good Work Plan, published in December 2018. 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 our work lives. Here we look at the three main strands of the proposed reforms.
Employment law reforms
Fair and decent work
The first section makes very tangible changes to the current law and introduces some entirely new entitlements. Highlights include:
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.
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.
This break period will be extended from one week to four weeks, helping 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.
Protecting agency workers
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.
Tips and gratuities
Rules will be implemented to ensure that tips are passed directly to the individual, rather than taken by the employer.
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 but we expect that from April 2020 this will be reduced to 2% (although the 15 employee minimum threshold will remain).
Clarity for employers and workers
In the second section there is a clear focus on improving communication and certainty in the working relationship. The main reforms include:
Employment status tests
There is a commitment to improve the clarity of the employment status tests for employee, worker and self-employed, although it remains to be seen exactly how and when this will be done. Given the large amount of recent case law (for example, about Uber drivers, Pimlico Plumbers and Deliveroo couriers), most would say that this is a much-needed area of review.
Statement of basic terms
From April 2020, it will not just be employees who are entitled to receive a written document setting out their basic terms, because the right will be extended to workers too. 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 but this will change to become a “day-one” right instead. This 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.
Key terms for agency workers
Employment businesses will be required to provide every agency worker with a document known as a “key facts page”.
This will need to include certain details, such as the type of contract they are employed under, the minimum rate of pay they will receive and details of any fees that might be taken. This will help agency workers better understand their basic terms, which can be especially difficult where intermediary umbrella companies are involved.
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.
In response to recent case law, there will also be a campaign to ensure that individuals better understand their rights and a new holiday entitlement calculator will be launched.
Promoting justice and protecting the vulnerable are the central aims of these reforms, which include:
Naming and shaming
Employers who do not pay the compensation awarded by an employment tribunal following a successful claim will now not only face potential enforcement proceedings (where a penalty notice can be issued of up to 50% of the unpaid award) but also the prospect of being publicly named and shamed.
The Employment Agency Standards Inspectorate exists to enforce agency worker rights. Its future remit will be expanded to allow it to cover umbrella companies too.
State enforcement of holiday pay
Currently, when an employer does not pay holiday pay correctly, the individual has to bring employment tribunal proceedings. In the future, there will also be a state-led enforcement regime to assist vulnerable workers (although we wait to see who will be categorised as “vulnerable”).
So, with the multitude of changes on the horizon as a result of the Good Work Plan, employers will want to start thinking practically about how it will impact them.