June 26, 2019

The Good Work Plan – employment law overhaul or damp squib?

The government’s strategy is broken down into three main themes:

  • fair and decent work
  • clarity for employers and workers, and
  • fairer enforcement.

What does the plan mean in reality?

The Good Work Plan is the government’s published response following the Taylor Review, which was commissioned to examine the rights of employees and workers within UK labour law. A copy of the Good Work Plan can be found here.

The government has heralded the Good Work Plan as the “largest upgrade in a generation to workplace rights”. However, the only legislation changes that we know will definitely be implemented, involve a number of small, discreet changes rather than a radical overhaul of employment rights. And unfortunately, the Good Work Plan lacks any real detail about how the government will implement many of their more significant legislative commitments. The earliest we will see any further changes will be April 2020, which is a number of months away.

With the government’s focus being pulled towards the internal leadership debate and 31 October, it will be a waiting game to see when the government sets out the detail of the more significant changes, and their time frame.

Here is a flavour of some of the changes that will be coming into force, and some of the bigger proposals where we await the detail and proposed time frames:

The legislation now in force - Employers take note

Workers now have a right to a payslip

As of April 2019, all employers will be required to provide pay slips to not only employees but also workers, casual, zero hours and part-time workers. The new legislation requires employers to explicitly state the number of hours the individual is being paid for. If you fail to provide a payslip you may be subject to a fixed payment notice for non compliance.

Tribunal penalties for aggravated breach

From April 2019 the employment tribunal has been able to hand down financial penalties of up to £20,000 (the previous cap was £5,000) if the employer is found to have committed an aggravated breach. For example, the penalty might apply if an employer was motivated by malice.

Name and shame

As of December 2018 the names of employers who fail to pay tribunal awards will be published online. To trigger the publication of an employer’s name, individuals will need to file a revised penalty enforcement form.

Coming soon - the law from April 2020

Written particulars for all
After April 2020 all workers (not just employees) will be entitled to receive a document setting out the key terms of their contract from day one.

Calculating holiday pay
From April 2020 the reference period for calculating holiday pay will be increased from 12 weeks to 52 weeks. This will ensure that a worker’s holiday pay is a better reflection of their ‘normal’ pay, particularly where workers pay fluctuates significantly over the course of a year.

Specific protections for agency workers

Key facts page

All agency workers after April 2020 will have the right to be provided with a document containing the following information:

  • type of contract
  • their rate of pay
  • who is responsible for paying it
  • any deductions or fees that will be taken
  • any non-monetary benefits to which they will be entitled
  • any entitlement to annual leave
  • payment in respect of such leave, and
  • an illustrative example of what this might mean for their take-home pay.

This requirement will be enforced by the Employment Agency Standards Inspectorate.

Abolishing the Swedish derogation

The government has realised that it is rare for agency workers to have gaps between assignments. The government believes that some recruitment agencies are using the “Swedish derogation” to avoid pay parity between agency workers and direct employees if certain conditions are met, simply to reduce their pay bill. The government will repeal the Swedish derogation from April 2020, so that all agency workers will have a right to pay parity after 12 weeks.

For further information on the Swedish derogation, ACAS has drafted a helpful explanation, this can be found here.

Lowering the information and consultation threshold

The Information and Consultation of Employees Regulations give employees the right, subject to certain conditions, to request that their employer sets up or changes arrangements to inform and consult them about issues in the organisation. From April 2020, the threshold required for a request to set up information and consultation arrangements will reduce from 10% to 2% of employees, subject to the existing minimum of 15 employees.

Timescale not confirmed

Sadly the government has failed to give any real detail or timeframes for a number of their headline commitments. These include:

  • Producing a more robust legal framework to clarify an individual’s employment status that reflects modern working practices. They also seek to align definitions with status definitions used for tax purposes.
  • Giving casual workers the right to request a ‘more stable’ and ‘predictable’ contract after 26 weeks of service.
  • Making it easier for employees to show continuity of service and being afford additional employment rights.
  • Legislating to ban employers from taking “administrative fees” or other deductions from staff tips.
  • Increasing National Minimum Wage / National Living Wage rates for hours that are not guaranteed as part of the contract. Note that following advice from the Low Pay Commission, the Government will not be taking this recommendation forward. The Government has said it will be subject to further consultation.
  • Extending state enforcement of unpaid holiday pay, but only to "vulnerable workers' holiday pay rights". It does not say what is meant by "vulnerable", and has yet to identify which body will be responsible for enforcement.
  • The government has two ongoing projects, the Employment Tribunal Project and the Civil Enforcement Project, which aim to make it simpler to bring tribunal claims and enforce awards. This includes improved guidance on enforcement to explain more clearly the options available. The government also intends to “simplify the user’s journey” through an Employment Tribunal claim and to create a “seamless, end to end system” which guides users through each stage of the process.
  • Expanding the remit of the Employment Agency Standards Inspectorate (EAS) to cover umbrella companies. The role played by umbrella companies in relation to lower skilled, lower paid agency workers, is not always clear and transparent. EAS will focus on situations where agency workers are not being paid properly.
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