29th January 2019

Employment Law – The Good Work Plan

Following on from recommendations from the Taylor Review of Modern Working Practices, the government has announced the introduction of the Good Work Plan, setting out details of what the government describes as “the biggest package of workplace reforms for over 20 years. There is a particular focus on vulnerable workers, including agency workers, casual workers and zero-hours workers which we expect to have a big impact on the health care sector.

For the first time, the government has outlined plans for an equal focus on quantity of work to the quality of work. Previously, the main focus has been on the quantity of work, but we are now at highest rate of employment that we have ever seen.

We have summarised the key proposals below.

 

Fair and Decent Work

The government have paid particular attention to all work being fair and decent, which they have defined as:

  1. Satisfaction;
  2. Fair pay;
  3. Participation and progression;
  4. Well-being, safety and security; and
  5. Voice and autonomy.

The Taylor Review raised an issue of “one-sided flexibility” in the relationship between employers and workers. The government will introduce legislation to give rights for all workers to request a more stable contract after 26 weeks’ service. The process for this would be similar to that of a flexible working request.

The government is also expected to increase the period of time required to break continuous service from one week to four weeks. This will make it easier for casual employees to gain employment rights such as the right not to be unfairly dismissed.

The “Swedish Derogation” in regulation 10 of the Agency Workers Regulations 2010 allows an employer to avoid giving agency workers pay that is equal to their comparable direct recruits if they have an employment contract which entitles the worker to pay between assignments. As the employment rate is currently at a high level, the government believes that agencies are abusing the ‘Swedish Derogation’ and using these contracts to simply reduce the pay bill. Abolishing pay between assignment contracts will ensure that agency workers have a right to equal pay after 12 weeks.

The government is also set to introduce legislation to ban employers from making deductions to staff tips.

 

Clarity

The Taylor Review considered employment status and criticised the current test for focusing too heavily on rights that are rarely exercised in practice, such as the right to send a substitute. It was recognised that the test should place more emphasis on control. The government is committed to legislate to improve the clarity of the employment status test but we are yet to see how it intends to do so. The government has also voiced intentions of creating an online tool to help people determine their employment status more simply.  

Workers will receive the right to be provided with a written statement of terms on or before their first day of employment. Currently, this must be provided within eight weeks of the worker commencing employment. Agency workers must be given a “Key Facts Page” with information about their contract. This will improve transparency and clarity for workers.  

At present, the reference period for calculating an average week’s pay is 12 weeks. This is set to increase to 52 weeks. Workers will benefit from this as they will no longer be disadvantaged if taking a holiday during a quiet period of business.

 

Fairer Enforcement

The Good Work Plan confirms the ongoing work towards making tribunal claims simpler to bring and making it easier to enforce awards. The government plans to publicly name and shame all employers who fail to pay tribunal awards made against them.

The government has recognised that sanctions available to the employment tribunal are not used as widely as they could be, and will provide new guidance on how they can be used. The government will also be increasing the maximum penalty for an “aggravated” breach of employment law from £5,000 to £20,000. Employers found to liable for repeated breaches will face an additional sanction.

The government also intends to introduce a single labour market enforcement agency to ensure vulnerable workers are more aware of their rights and have easier access to them. The agency will also support businesses to comply.

The government plans to extend enforcement strategies to be used for holiday pay, it is already in place and working successfully for enforcing the national minimum wage.

 

What next?

Following publication of the Good Work Plan the government has published a number of draft regulations. We expect to see the implementation of the promised improvements throughout 2019 and 2020. We can however be assured as the Prime Minister says we will not only maintain workers’ rights as the UK leaves the EU, but enhance them.

*All information is correct at the time of publishing

Napthens LLP

Employment Law Specialists

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