The Good Work Plan was published by the Government in December 2018. It presented the Government’s vision for the future of the UK labour market, which is:
“a labour market that rewards people for hard work, that celebrates good employers and that is ambitious about boosting productivity and earnings potential in the UK” (Good Work Plan, 2018).
In this Plan, the Government committed to a number of policy and legislative changes to ensure that: workers can access fair and decent work; employers and employees understand their employment relationships; and the enforcement system is fit for purpose.
A number of changes have already been implemented since the Good Work Plan was published, with a number that remain outstanding, some of which came into force in April 2020.
These are explored further in this article and it will be important for organisations to consider their impact.
Background to the Good Work Plan
In July 2017, the Taylor Review of Modern Working Practices was published, which was commissioned by the Government and led by Matthew Taylor. This review was based on the ambition that all work in the UK economy should be fair, with a realistic prospect for development and fulfilment.
This review investigated and reviewed issues in the labour market, including the:
- implications of new forms of work;
- rise of digital platforms; and
- impacts of new working models
Based on this review, 53 recommendations were made to the Government. The Government responded in February 2018 accepting the majority of these recommendations. The Government also initiated consultation to engage stakeholders in the process and to seek their view on the implementation process. The consultation focused on the following four key areas:
- Employment status
- Agency worker recommendations
- Increasing transparency in the labour market
- Enforcement of employment rights recommendations
The Good Work Plan draws on the feedback from the consultation and sets out the reforms that the government intends to introduce.
The Good Work Plan – what’s already been implemented?
In April 2019, the government implemented the following changes:
- The right to a payslip for all workers.
- Hourly paid staff are entitled to payslips stipulating their hours worked.
- An increase in the penalty for ‘aggravated breaches of employment law’.
For information regarding this, you can read the section on Changes to Employment Law in 2019 here – Employment Law changes: Past, Present and Coming up
Changes that came into force in April 2020
A number of changes stated in the Good Work Plan came into effect on 6th April 2020 and are important for employers to understand.
Written Statement of Terms and Conditions of Employment
The right to receive a written document setting out basic terms and conditions of employment has been extended to workers, as well as employees. This new entitlement means that workers will have more clarity regarding their contractual terms.
This written statement also needs to be provided to the new joiner on or before their start date, which is a change from the previous legislation which stated that the particulars should be provided within 2 months of a new employee’s start date.
This new legislation will not affect employees who joined your organisation prior to 6th April 2020. However they do have the right to request a written statement in line with the new requirements. Employers will have a deadline of one month to comply with this request.
Employers were previously able to include some information required in the written statement of employment particulars in the employee handbook or in separate policies.
However, since 6th April 2020, the majority of the information needs to be included in one ‘Principal Statement’. Employers also need to provide the following to comply with the new regulations:
- The days of the week that they are required to work.
- Whether working hours or days may be varied, how this can happen, and how this will be determined.
- All paid leave entitlement in addition to annual leave and holiday pay (including but not limited to paid parental leave and sick leave).
- All employee benefits and remuneration.
- Any probationary period, including duration and conditions.
- Training that the employer will provide.
- Any mandatory training that they must complete (including training that the employee will need to pay for).
For more details on the changes regarding issuing contracts of employment and the written statement of employment particulars, please see our in-depth article:
A guide to issuing contracts of employment and the written statement of employment particulars.
Agency Workers
Under the previous agency worker regulations agency workers were entitled to receive the same level of pay and basic working conditions as direct employees once they had completed 12 weeks’ continuous service in the same role.
However, there was an exemption to this law called ‘Swedish derogation’ in which agency workers could choose to opt out of this right and choose to receive a guarantee level of pay between their temporary assignments instead.
From 6th April 2020, this exemption was abolished under the Agency Workers (Amendment) Regulations 2019, and agency workers are entitled to equal pay in comparison to those directly engaged by the employer once they have satisfied the 12-week qualifying period.
Agency workers must then be provided with a ‘key facts statement’ setting out the terms under which they will undertake work, which should include the type of contract they’re employed under, the minimum rate of pay they will receive and details of any fees that might be taken.
Holiday Pay Calculations
Previously, the holiday pay reference period was 12 weeks. However, from 6th April 2020, this increased to 52 weeks. Employers are obliged to review the previous 52 weeks that a worker has been engaged and received pay, discarding any weeks not worked and where no pay was received, to calculate the average weekly pay.
For more details on holiday pay calculations, please see our article:
Changes on the Horizon
There are a number of changes stipulated in the Good Work Plan still to come, although implementation dates have not yet been set. We have summarised these changes below, for you to look out for in the future.
Right to request a more predictable and stable contract
This new right will mean that an employee can request a more stable and predictable contract after 26 weeks’ employment. Examples of what might be requested include a guaranteed number of hours and certainty around 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 hours contracts. An employer will have three months to make their decision on any such request.
Break of Continuous Service Period
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 workers 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) that require a particular length of service.
Staff Tips
Rules will be implemented to ban employers from making deductions from staff tips and, therefore, to ensure that tips are passed directly to the individual.
Holiday Pay
The government intends to support workers to understand their rights in relation to holiday pay, and to help organisations in calculating holiday pay. New guidance is also due to be introduced to simplify the holiday pay rules, and an online holiday pay calculator will also be setup.
Employment Tribunal Fees
Although reintroducing employment tribunal fees is not explicitly mentioned in the Good Work Plan, it is likely that the government will choose to take this action. However, it is not expected that the fees will be at a similar level to those in the previous regime.
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, regarding Uber drivers, Pimlico Plumbers and Deliveroo couriers), most would say that this is a much-needed area of review.
Further Changes in Consultation
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 there is an intention to reduce this to 2% (although the 15-employee minimum threshold will remain).
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.
Umbrella companies
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. The government proposes in the Good Work Plan to enhance enforcement of statutory holiday pay (and possibly sick pay) by giving enforcement powers to HMRC.
There will also be a state-led enforcement regime to assist vulnerable workers (although we wait to see who will be categorised as “vulnerable”).
If you’d like to discuss how these changes affect your organisation, please do not hesitate to contact our team.
