Last reviewed 1 April 2021
Opeyemi Ogundeji, researcher and employment law writer at Croner-i, explores the Good Work Plan in detail, touching on the changes that have happened and those yet to come.
The Good Work Plan has been said to be one of the “biggest shake ups of employment law in a generation”. Its reform policies, a series of measures put into place to improve working conditions for employees, have affected most, if not all, employers in the UK. Although the changes affect employers in England, Wales and Scotland, currently, there are no plans to make corresponding changes in Northern Ireland.
In April 2020, a significant number of new laws came into effect as part of the plan and more are expected at some point in the future. Now, one year later, let’s take a look at how the plan came to be, the changes that happened on 6 April 2020 and what employers can expect in the future.
In July 2017, Matthew Taylor, a former Labour Party policy advisor, published a report into modern employment practices, entitled Good Work: The Taylor Review of Modern Working Practices. Taylor had been asked to undertake a review with the aim of making recommendations for ways to offer more protection to those who do not work within the standard structure of permanent employment.
Taylor’s findings outlined that bad work generates costs for society, with low quality work and weak management being a major stumbling block for national productivity. In particular, the Review examined the “gig economy” in detail, outlining how people in work were losing out due to unclear employment status, lack of economic security, poor flexible working practices, and poor enforcement of existing rights.
The Review concluded by listing 53 recommendations for changes in employment law which were considered by the Government, forming the basis of the Good Work Plan.
The Changes so far
Statement of main terms
The Good Work Plan brought significant changes to the law on statements of main terms. Since 6 April 2020, employees have been entitled to receive the statement “not later than the beginning of their employment”. This effectively means the statement must be given from day one of their employment. “Workers”, a broader category than “employees”, also have a legal right to receive a statement of main terms, including zero-hour workers, casual workers, etc. However, a statement provided to workers needs to be tailored in accordance with the specific features of a worker arrangement.
The list of information that must be included in the statement has also been extended. Statements given to any employee or worker who started work on or after 6 April 2020 must include:
the terms and conditions relating to work will extend to cover terms relating to normal hours of work, days of the week the worker will be required to work and whether these days/hours may vary
terms relating to other forms of paid leave such as family-friendly leave
details of other employee benefits, not just those relating to pay, such as benefits in kind or financial benefits
terms relating to probationary periods including those in relation to length and conditions
details of training provision and requirements.
Information and consultation procedures
Where an employer has 50 or more employees, its employees are able to require the employer to implement information and consultation procedures if a request carries sufficient support. Previously, 10% of the workforce had to be behind the request, subject to a minimum of 15 employees.
Since 6 April 2020, the minimum employee threshold has been reduced to 2%, however, the minimum 15 employee threshold will remain in place. This change means that a lower level of support is required to force employers to implement information and consultation procedures. A request of this kind does not apply to any information and consultation requirements which are provided for under separate legislation, eg in relation to redundancies and TUPE.
Since the introduction of the Agency Workers Regulations 2011, agency workers who work on an assignment for 12 weeks or more are entitled to the same treatment as permanent staff at their end user organisation to respect of basic pay, etc. Previously, those agency workers employed on contracts known as the Swedish Derogation Model (also known as “pay between assignments” contracts) were excluded from the equal pay requirement.
Since 6 April 2020, the use of Swedish Derogation Model contracts was banned, closing the current equal pay loophole, meaning it is now no longer lawful to engage an agency worker on a Swedish Derogation Model contract. Anyone employed on this type of contract on this date had to be provided with a statement by 30 April 2020 explaining the effect of the ban on their pay.
In a separate move, all agency workers must now be given a key information document which explains their engagement including:
the type of contract the worker is employed under
the identity of the employment business
the minimum rate of pay they can expect
how they are to be paid and by whom
any deductions or fees that will be taken
an estimate or an example of what this means for their take home pay
details of annual leave entitlement and pay for this leave.
The document, which must be no longer than two pages of A4 paper and written in clear English, must be given to the agency worker before the terms under which they work will be agreed. This change also took effect on 6 April 2020.
Not all of the changes laid out by the Government have been implemented or given a date for implementation, these are as follows.
Period required to break continuous service
Current law states that one week “ending with a Saturday” is required between two contracts of employment to break continuous service, eg to prevent the service accrued under the first contract being added to that served under the second. This often means that casual employees are unable to accrue the length of service required for some employment rights, eg protection against unfair dismissal, requesting flexible working, etc.
The period of time required to break service will be extended from one week to four weeks. This means that it will be easier for casual employees to add together service from one period of employment to another when they are re-hired quickly after their last contract ended.
Greater protection for women in redundancy situations
Currently, women on maternity leave have more protections than their colleagues in a redundancy scenario. They must be offered a suitable alternative role, where one exists, above all other employees. Essentially, women on maternity leave are entitled to first refusal of the other role.
The Government is considering extending this protection to cover a longer period of time. The extra protection would begin to apply at the time the employee informed her employer of her pregnancy, and would end six months after her return from maternity leave. It is also proposed to extend the same protection to employees returning from adoption leave and shared parental leave.
Identifying employment status
The Government will take measures to improve the clarity of employment status tests which are used to determine whether someone is an employee, worker or is self-employed.
The aim is to reflect the reality of working relationships and to prevent employers from being able to misclassify or mislead their workforce over their real status. It is likely that more emphasis will be placed on the degree to which an employer controls aspects of the work done and less emphasis will be placed on the ability to send a substitute in their place. In addition, the Government will seek to align the employment status frameworks for the purposes of employment rights and tax.
Other upcoming changes
In addition to the three upcoming changes discussed above, the Government is also looking at making changes to:
a zero-hour (or variable) worker’s right to switch to a more stable contract
offer workers protection over the tips they earn during their shift.
What does all this mean?
The Good Work Plan has already brought about significant changes for employers’ businesses and has meant adjusting business practices in order to keep in line with the law. Employers are reminded that the changes that have taken effect from 6 April 2020 should be seen as a permanent change to the way their working relationships with staff is conducted.
That said, employers should also keep in mind that there are further changes that may come into effect later this year or sometime in the near future, meaning keeping up to date with government guidelines on this should be prioritised.