Good Work Plan – Update
A number of proposals are put forward and three pieces of legislation have passed related to the Good Work Review. A brief summary of the proposals and legislative changes are below.
The most recent update outlines five ‘foundational principles’ related to work quality:
- fair pay
- participation and progression
- wellbeing, safety and security
- voice and autonomy
Accordingly, all proposals are structured around those five principles.
The government will:
- legislate to give all workers the right to request a more stable contract.
- extend the time required to break a period of continuous service to make it easier for employees to access their rights.
- will legislate to ban employers from making deductions from staff tips.
- set out the specific information that agency workers must be given to help them make informed choices about the work they accept.
- work to ban the use of pay-between-assignment contracts as a means to avoid agency workers’ equal pay rights.
- align the employment status frameworks for the purposes of employment rights and tax.
- legislate to improve the clarity of the employment status tests, reflecting the reality of modern working relationships.
- legislate to prevent businesses from avoiding their responsibilities by misclassifying or misleading their staff.
- extend state enforcement, on behalf of vulnerable workers, to underpayment of holiday pay. (part of a previous government commitment)
- we will increase state enforcement protections for agency workers where they have pay withheld or unclear deductions made by an umbrella company.
- legislate to increase the maximum level of penalty that Employment Tribunals can impose in instances of aggravated breach to £20,000.
- legislate to create an obligation on Employment Tribunals to consider the use of sanctions where employers have lost a previous case on broadly comparable facts.
- bring forward legislation to introduce a right for all workers to request a more predictable and stable contract.
- legislate to extend the relevant break in service from one to four weeks, allowing more employees to gain access to employment rights.
- bring forward legislation to repeal the Swedish derogation and ban the use of this type of contract to withhold agency workers’ equal pay rights.
- legislate to lower the threshold required for a request to set up information and consultation arrangements from 10% to 2% of employees. The 15 employee minimum threshold for initiation of proceedings will remain in place.
- legislate to require all employment businesses to provide every agency worker with a Key Facts Page. This will include: the type of contract a worker is employed under, the minimum rate of pay that they can expect, how they are to be paid, if they are paid through an intermediary company, any deductions or fees that will be taken, and an estimate or an example of what this means for their take home pay.
- launch an awareness campaign, targeted at both individuals and employers, to boost awareness and understanding to help ensure all workers are benefiting from their paid entitlement to leave.
- introduce new guidance, including real life examples, to support the interpretation of holiday pay rules. This will be accompanied by an updated and improved holiday entitlement calculator and we are exploring the option of a new holiday pay calculator.
- legislate to extend the holiday pay reference period from 12 to 52 weeks. However, we will go further and set out in the next section other measures we will take to ensure vulnerable workers receive their holiday pay.
- provide new guidance to Employment Tribunal providing examples of how current powers (such as aggravated breach penalties, cost orders, and uplifts in compensation) can be best used.
- bring forward legislation to facilitate the use of sanctions in cases of repeated breaches by the same employer and place an obligation on employment judges to consider the use of these sanctions.
- introduce legislation to expand the remit of the Employment Agency Standards Inspectorate to cover umbrella companies.
- bring forward proposals in early 2019 for a new, single labour market enforcement agency to better ensure that vulnerable workers are more aware of their rights and have easier access to them and that businesses are supported to comply.
Thus far three pieces of legislation have passed. A brief summary of each is below.
The Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018 3 come into effect 6 April 2020 and offers the following changes to working.
- Makes the right to a written statement of particulars of employment a day 1 right. (Part 2)
- Some latitude is available provided the ‘majority’ of working particulars are provided on day 1.
- Changes the way annual leave is calculated. (Part 3)
- Where a worker has been employed by their employer for at least 52 weeks, the reference period is increased from 12 weeks to 52 weeks.
- Where a worker has been employed by their employer for less than 52 weeks, the reference period is the number of weeks for which the worker has been employed.
- Makes further modification to non-remunerated weeks in calculating holiday pay.
The Employment Rights (Miscellaneous Amendments) Regulations 2019 4 come into effect in two stages.
- increase in financial penalties at Employment Tribunal come into effect 6 April 2019 (Part 2).
- modifications to recognize different worker types (worker vs employee, worker’s contract vs contract of employment) come into effect 6 April 2020 (Part 3).
- lower the threshold required for a request to set up information and consultation arrangements from 10% to 2% of employees come into effect 6 April 2020 (Part 4).
The Agency Workers (Amendment) Regulations 2019 5 come into effect 6 April 2020 and
- provides a right for the agency worker to the same basic working and employment conditions as the agency worker would have been entitled to if they had been recruited directly by the hirer. (Regulation 5).
- requires a temporary work agency to give a written statement to the agency worker where the temporary work agency and the agency worker have entered a permanent contract of employment (Regulation 4).
- provides the right not to be unfairly dismissed or subjected to a detriment for a reason relating to the Regulations. (Regulation 5).
- makes the Regulations applicable to Crown employment, the armed services, the House of Lords, the House of Commons and the police service, with certain qualifications. (Regulation 6)
Arguably, the most far-reaching and impactful of these regulations (so far) is The Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018 and DLP expects many of our clients will be affected by this new annual leave calculation. While the legislation provides a benefit for workers this could have a significant impact on SME profitability.
As always, DLP will keep abreast of any additional action taken based on these proposals and keep our clients informed of any changes that may affect them. Should you have any questions feel free to reach out to our help line.