Update on the Good Work Plan

In December 2018, the Government published its further response to Matthew Taylor's Review of Modern Working Practices. The 'Good Work Plan' is claimed to be the 'biggest package of workplace reforms for over 20 years', and contains a number of proposed changes to employment law to upgrade workers' rights. The Government also laid its first statutory instruments in line with the Good Work Plan.

The first change is intended to come into force from 6 April 2019, and will increase the maximum level of penalty for aggravated damages from £5,000 to £20,000. Aggravated damages can be awarded by the Employment Tribunal in discrimination cases where the actions of the employer have increased the injury caused to the Claimant. Currently these are only awarded in the most serious of cases though it is envisaged by the review that their use will increase and that guidance will be issued.

A number of further changes are intended to come into force from 6 April 2020, including:

Written Statements of employment particulars will have to be provided on the first day of employment and have to be provided to both employees and workers. 

Currently an employer has two months to provide written particulars of employment and only has to provide it to employees. The regulations also extend the mandatory information that has to be provided in the written particulars to include whether the employment is fixed term or permanent, the amount of notice each party has to give, details of sick pay and leave, probation periods, details of paid leave such as maternity, all remuneration, not just pay, training entitlement and specific days and time workers are required to work.

For those of you that use standard employment contracts already, you will most probably be providing this additional information which will be mandatory from 6 April 2020. You will just need to make sure that the contract/written particulars are issued on or before the start of employment.

If these additional details are not currently provided to those employed before 6 April 2020, any request for written confirmation of these terms has to be provided within one month of any such request being made.

Changes to the rules for calculating an average week's pay.

Currently, employers are required to look at the pay that workers have received in the previous 12 weeks to determine their average week's pay for the purposes of calculating holiday pay. The new legislation will require employers to look at the average pay over the previous 52 weeks for workers. This will then be used to calculate holiday pay. It is hoped that this will ensure that workers will receive holiday pay which is a truer reflection of their actual earnings particularly in seasonal and atypical roles where there are peak periods of work.

Removing what is known as the Swedish derogation to the Agency Workers Regulations.

Under the Agency Workers Regulations, agency workers are entitled to the same basic working and employment conditions as those staff employed directly by the employer after 12 weeks. The Swedish derogation allows employers to pay agency workers (including holiday pay) differently to direct recruits after 12 weeks if the agency worker has a contract of employment with the agency which provides for a minimum level of pay between assignments and which has been provided to them before they started work. This was found in the Taylor Review to be misused and preventing agency workers from receiving equal pay rights and so it is proposed that it will be repealed and no longer permitted after 6 April 2020.

Changes to threshold at which employers have to enter into negotiations about establishing workplace representatives.

Currently under the Information and Consultation of Employees Regulations 2004, employers are obliged to enter into negotiations about establishing workplace representatives if 10% of employees request it. From 6 April 2020, this will be reduced to 2% of the workforce to increase the reach of these regulations.

There are further proposals within the Good Work Plan, which as yet have no timescales for implementation. These include:

Employment status

The Government have committed to improving the clarity of the employment status tests. They also intend to align the frameworks for identifying employment status for employment rights and tax purposes in order to minimise the differences between the two systems.

Unfortunately, there is very little detail on how these proposals will be taken forward. However, the Government has indicated that definitions will place more emphasis on control and less on the notional right to send a substitute. It will be interesting to see how this is taken forward.

Certainty of work

The Government have proposed a right for atypical workers to request a more fixed working pattern from their employer after 26 weeks of service. Again, there are no details of how this mechanism would work, and what penalties there would be for breach of this right, and so it is unclear how effective such a right will be to guarantee hours for those on zero hours contracts.

Continuity of employment

Additionally, the period required to break continuity of employment will be increased from one week to four weeks, thereby allowing those who work intermittently for the same employer or associated employers to more easily access certain employment rights that require a level of continuous service, such as unfair dismissal and the right to a redundancy payment.

Pay

The Government intend to legislate to ban employers from making deductions from staff tips.

Enforcement of workers' rights

The Government have proposed a number of sanctions for employers who breach their responsibilities, including naming employers that are not paying their Employment Tribunal awards, placing an obligation on employment judges to consider the use of sanctions in cases of repeated breaches by the same employer, and bringing forward legislation to enforce holiday pay for vulnerable workers. It is also proposed that a new single labour market enforcement agency will be created to better protect vulnerable workers.

Recommendations not being taken forward

There are some recommendations from the Taylor Review that will not be taken forward, including the proposal to introduce a premium to the National Living Wage for non-guaranteed hours worked and the proposal for workers to be able to receive rolled-up holiday pay.

Next Steps

We will provide further updates on how the proposals are being taken forward in future bulletins. In the meantime, if you want to discuss making plans in advance of the legislated changes coming into force, please contact Kathryn Evens, Senior Associate, Catherine Turpin, Solicitor or your usual Foot Anstey contact.