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The Good Work Plan and Employment Reforms

Reasons to choose Wilson Browne

Touted as “the biggest package of workplace reforms for over 20 years”, what is the Good Work Plan about?

And, more importantly, how might it affect your business?

The Government published the Good Work Plan on 17 December 2018 in response to the Taylor Review which called for the Government to conduct a large review of workers rights and implement appropriate changes.

Since the Good Work Plan was published, a number of different consultations have taken place and further proposals have been made. As a result, some changes to rights have and are to be implemented by new legislation.

Information regarding the new legislation is set out in this factsheet along with guidance on how they may affect you and what you can do to get ready. The bulk of changes are yet to be finalised or legislated however, we have set these out for you to start thinking about and preparing for.

What’s in force now?

Naming scheme for non-paying employers

The government intends to name and shame employers who do not pay employment tribunal awards. Whilst employment tribunal decisions are currently published, this naming scheme (which will be similar to the breach of national minimum wage naming scheme) is intended to come to the attention of more people, increasing the reputational damage that employers may suffer.

(Please note that, whilst it is technically in force, at the time of this factsheet production there are ongoing delays with publishing names of those who have not paid under the scheme.)

The right to receive itemised payslips has been extended

All workers are now entitled to receive payslips that have been itemised. For example, payslips for workers paid an hourly rate, must include the number of hours work and different figures must be provided where an employee is paid a different rate of pay for different types of work.

Failure to comply can result in a monetary award being made.

Increase to the maximum penalty for an “aggravated” breach of employment law (came into effect on 6 April 2019)

The penalty has been increased from £5,000 – £20,000. When imposed, this penalty is payable to the Secretary of State and is in addition to any financial award that any worker may receive.

What comes into force on 6 April 2020?

Changes to contracts of employment obligations

There are three main changes in respect of s.1 written statement of terms, namely:

  • The right to receive an s.1 compliant written statement of terms is to be extended to workers, not just employees.
  • This document must be given to all workers by or on day 1 of their engagement (currently, it is to be issued to employees within 2 months of starting employment).
  • There is also additional information that must be provided in the statement.

Failure to comply can result in the Tribunal making a declaration for the written terms that apply to their employment as well as monetary awards in some cases.

Reference period for calculating holiday pay

The reference period for determining an average week’s pay will increase to 52 weeks. Failure to correctly calculate holiday pay can result in claims.

Repeal of the Swedish derogation

Agency workers who have completed a 12-week qualifying period are entitled to the same “basic working and employment conditions” that they would have been entitled to had they been recruited directly by the hirer. The current ‘Swedish Derogation’ exemption will no longer apply and organisations will have until the 30 April 2020 to write to all agency workers informing them of the change to their rights.

Failure to comply can result in Tribunal claims.

Key information documents for agency work-seekers

Employers will have to provide agency work-seekers with a key information document before agreeing the terms by which the work-seeker will undertake work. This document needs to include, among other things, information such as the type of contract that will be used and minimum rates of pay.

Failure to comply can result in financial awards.

Reduction in the Information and consultation threshold

The threshold for the number of valid employees required to request to set up information and consultation arrangements is being lowered from 10% to 2% of the total number of employees employed by the employer. There will continue to be the requirement for a minimum of 15 employees.

What’s on the horizon?

The Government has confirmed that legislation will follow in relation to a number of proposed changes. As and when the legislation is passed, we will issue updates. In the meantime the proposed headline changes are:

  1. The right to request a more stable contract – The Government has confirmed it will adopt recommendations to introduce the right for atypical workers to switch to a more predictable and stable contract after 26 weeks of continuous service. This would mean that if a worker tends to work 30 hours per week then they are entitled to request a contract that will guarantee them at least 30 hours a week of work. It is anticipated the legislation will make provision for employers to have a right of refusal.
  2. More clarity in respect of employment status – Legislation will be passed which is designed to improve the clarity of employment status tests to reflect the reality of modern working relationships and to minimise discrepancies between the approaches taken in respect of the tax position vs the employment law position. The Government has also stated it intends to develop an online tool to assist individuals in determining their employment status.
  3. Breaking continuity of service – The current gap of 1 week to break continuity of service is to be extended.
  4. Holiday pay enforcement – The HMRC’s powers to enforce payment of the national minimum wage is to be extended to the state in respect of ‘vulnerable workers’ holiday pay rights.
  5. Modernisation of the Tribunal Service – This is to reflect the Government’s intention to make it simpler for individuals to both bring tribunal claims and enforce any awards they are given. This is expected to further increase the number of claims made to tribunals.
  6. Tips and gratuities – The Government intends to ban employers from taking ‘administrative fees” or other deductions from staff tips.
  7. Introductions of sanctions for repeated breaches of the same issue – The Government is proposing to introduce additional sanctions if an employer is found liable for repeated breaches of the same employment breach, for instance, failure to give a worker statutory rights such as holiday. It also intends to introduce an obligation on tribunals to consider the use of the sanctions available for both repeated breaches and aggravated breaches.

So what should you be doing now?

In preparation of the changes coming into effect in April 2010, employers should be ensuring that:

  1. Written statements of terms contain as a minimum, the requisite information stipulated by the new legislation and processes are in place to ensure that these statements are issued on day one of the engagement.
  2. Systems are in place to ensure workers are paid in line with the right referencing period for holidays.
  3. Agency staff are issued with the correct information and access to week 12 rights.
  4. Review your workforce to ensure statements are issued to all who must be issued with s.1 statements – seek advice if there is uncertainty about an individual’s status and whether they qualify as either a worker or an employee.
  5. Review and revise any template documents (contracts and policies) or guidance in plenty of time so that you are ready and prepared for the changes in April 2020!!

This information is correct at time of publishing 2nd October 2019.

At Wilson Browne Solicitors, the employment team has experience in providing assistance and advice in relation to all aspects of employment law.

Jennie Jahina

Posted:

Jennie Jahina

Partner

Jennie is a Partner and Head of the Employment team.  A member of the Employment Lawyers Association, Jennie has 21 years’ experience and is an accredited CEDR Mediator. She acts for private sector organisations ranging from SMEs to multi-national companies and public sector organisations.