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Published 18 December 2018
Yesterday the Government published "The Good Work Plan" which sets out how it will implement 50 out of the 53 recommendations of the Taylor Review of Modern Working Practices. It confirmed that it intends to introduce a number of legislative changes designed to improve protection for agency workers, zero-hours workers and others with atypical working arrangements.
The key proposals are:
Swedish derogation: The Government has confirmed that it will repeal the ‘Swedish derogation’, which gives employers the ability to pay agency workers less than their own workers if the agency workers have a contract of employment with the agency.
Holiday pay: The Government intends to increase the reference period in calculating holiday pay from 12 weeks to 12 months. It will also bring forward legislation to implement state enforcement of holiday pay. This will allow vulnerable workers who have not received their holiday pay entitlement to raise a complaint and the state enforcement body to pursue payment of arrears on the worker’s behalf, backed up by financial penalties.
Written statement of terms and conditions: The Government has said it intends to give all workers (rather than just employees) the right to a written statement of rights on their first day of work (rather than within two months). It is also expanding the information required. This will include, amongst other matters, details of eligibility for sick leave and pay and details of other types of paid leave.
Employment status test: The Government accepts the Taylor Review’s recommendation that there should be legislation to streamline the employment status tests so they are the same for employment and tax purposes. This is perhaps the most significant development but there is very little detail on how this will be achieved. The Government also promises to do the near impossible and legislate to ‘improve the clarity of the employment status test". Although before doing this it has commissioned independent research to find out more about those with uncertain employment status, to understand how best to support them when bringing forward legislation.
Continuous service: It will also increase from one week to four weeks the period required to break continuous service for the purpose of accruing employment rights. So someone who works for an employer on a casual basis once a month may be able to build up the necessary length of service to claim unfair dismissal and redundancy pay rights.
Zero hours contracts: The government is proposing a right to request a fixed working pattern for those who do not have one, after 26 weeks' service. However, many Unions have criticised this proposal to request a more stable contract as having no teeth because it is only a right to request - so employers are not necessarily obliged to agree to what is requested.
Information and consultation arrangements: The threshold required to request the set up information and consultation arrangements will reduce from 10% to 2% of employees. This may lead to more requests.
Staff tips: There will be a ban on employers making deductions from staff tips.
Strengthening the enforcement of employment tribunal awards: The Government has said it will name and shame employers who do not pay Employment Tribunal awards. This is being implemented now; the Department for Business, Energy and Industrial Strategy (BEIS) announced a naming scheme on 17 December 2018. Awards registered with BEIS on or after 18 December 2018 are in scope for naming.
The Government also indicated it will quadruple the maximum Employment Tribunal fine for employers who are demonstrated to have shown malice, spite or gross oversight in breaching employment rights from £5,000 to £20,000. Importantly it will legislate to create an obligation on Employment Tribunals to consider the use of this sanction where employers have lost a previous case on broadly comparable facts.
Additional State enforcement: The Government will bring forward proposals in early 2019 for a single enforcement body to ensure vulnerable workers are better protected. There will also be greater regulation of "umbrella" companies.
Whilst the Government claims it is the biggest reform of employment law in 20 years, some of the proposals are merely tinkering round the edges. Despite this, there are some proposals such as the changes to holiday pay, continuity of employment, and the alignment of the employment tests for employment and tax purposes which may have a bigger practical impact.
Many reports have talked about legislation on these reforms being introduced. However, importantly the Government has not provided a timetable for most of these proposals, so we do not know when they will come into effect. In fact, given the current political climate it is unclear which of these changes, if any, will make it through Parliament before the next general election.
In July 2017 Matthew Taylor published his review which looked into the issues in our labour market. The review made 53 recommendations to government. (see our alert here) In February 2018 the government published a full response, accepting a vast majority of the recommendations. Alongside the response the government also launched 4 consultations to seek views on the approach to implementation. (See our previous alert here). The Good Work Plan draws on the feedback from these consultations.
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