Last reviewed 21 August 2019

In the last few months of the May premiership, there was a flurry of proposals and consultations on issues in employment law. Many of these proposals and the consultations set out in the Government’s Good Work Plan are to take forward the recommendations detailed in the 2018 Taylor Review of Modern Working Practices. The Good Work Plan is intended to “significantly change the enforcement landscape”.

In this two-part article, Stuart Chamberlain, author and Senior Employment Law Consultant at Croner-i, examines the key points of the legislation, consultations, and various proposals, drawing out their implications for employers.

Legislation in place

Legislation to reduce the thresholds of support for information and consultation rights

The Taylor Review highlighted the need for workers to have a voice, noting that high levels of employee engagement improve organisational performance and boost productivity.

Following the publication of the Good Work Plan, the Government introduced regulations to lower the threshold required to set up information and consultation arrangements from 10% to 2% of employees. This will come into effect from 6 April 2020.

Holiday pay — raising awareness

The Good Work Plan accepted the recommendations of the Taylor Review on holiday pay, especially the need to accommodate seasonal variation. The Government introduced the following draft legislation.

  • 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 fewer than 52 weeks, the reference period is the number of weeks for which the worker has been employed.

The Taylor Review proposal on rolled-up holiday pay for “dependent contractors” was not accepted. These changes are to take effect from April 2020.

The Department for Business, Energy & Industrial Strategy (BEIS) launched a holiday pay awareness campaign in March 2019.

Agency workers

The Swedish derogation

The Good Work Plan stated that there is clear evidence that workers are not benefiting from the opt-out known as “the Swedish derogation”. This opt-out is to be scrapped on 6 April 2020 and agency workers will no longer be excluded from the equality provisions of the Agency Workers Regulations. This will guarantee equal wages with those of comparable permanent workers for all long-term agency workers.

Temporary work agencies are required to inform agency workers that they have the right to equality of treatment from 6 April 2020. This statement must be given by 30 April 2020.

Specific information to be given

The Good Work Plan provides that agency workers will need to receive “key facts” information, including who is responsible for their employment, any element of pay from an intermediary, any fee and relevant benefits.

Employment businesses are required, therefore, from 6 April 2020, to issue agency workers with a “key information document”. This document must include information such as the type of contract the work-seeker will be engaged under, the rate of remuneration and holiday entitlement, as well as details of deductions and fees payable.

The Employment Agency Standards Inspectorate (EAS) will be responsible for ensuring the new requirement is complied with.

Extension to workers of statement of rights on appointment

At present an employer is required to issue new employees with a Written Statement of the Terms and Conditions of Employment within two months of starting work.

The Good Work Plan states that all employees and workers will be entitled to a Written Statement of Terms from day one of employment. Legislation to this effect will come into force on 6 April 2020.

This statement will set out enhanced information such as:

  • how long the job is expected to last (or end date of a fixed-term contract)

  • how much notice is required

  • details of eligibility for sick leave and pay

  • details of other types of paid leave (eg maternity/paternity leave)

  • duration and conditions of any probationary period

  • remuneration (not just pay)

  • which specific days and times workers are required to work.

The regulations provide that employers can decide to issue the Written Statement of Particulars in instalments, provided all are issued within two months.

Since April 2019, all workers are already entitled to a written payslip.

Legislation to increase the maximum level of penalty imposed by employment tribunals in cases of aggravated breach

The Good Work Plan stated that the Government proposes to increase the maximum level of penalty that employment tribunals can impose in instances of an aggravated breach from £5000 to £20,000. There will be a new obligation on tribunals to consider the use of sanctions where employers have lost a previous case on broadly comparable facts; this came into effect on 6 April 2019.

Government responses to consultations

Enhanced redundancy protection

Under present legislation, an employer must offer a woman on maternity leave a suitable alternative vacancy — if one is available, and she should be given priority over all other employees at risk of redundancy. This protection also applies during adoption, shared parental leave and paternity leave

In July 2019, the Government announced its response to an earlier consultation on extending redundancy protection for pregnant women and new parents. This proposes:

  • to extend the redundancy protection period for six months once a new mother has returned to work

  • to afford the same protection to those taking adoption leave

  • to extend redundancy protection for those returning from shared parental leave. However, the Government is to consult further with stakeholders on the design of this protection over coming months.

The Government confirmed that paternity leave does not justify equal treatment as it is confined to two weeks. A pregnant woman will be protected, therefore, from the time that she notifies her employer of her pregnancy. The Government announced that it will be implementing these changes “when Parliamentary time allows”.

If these proposals do come into law, it will mean a substantial increased length of time for which women will have enhanced rights during a redundancy situation. It could have considerable impact in female dominated workforces — a larger pool of women would be entitled to a suitable alternative position.

Non-disclosure clauses

The Government has now published its responses to the consultation on the use of confidentiality clauses (sometimes referred to as non-disclosure agreements ( NDAs)), particularly when settling discrimination and harassment claims. It has confirmed its intention to take further action.

The response to consultation on confidentiality clauses recognises that there are legitimate reasons for including them in employment contracts and settlement agreements. However, they should not be used to silence victims of discrimination and harassment. In particular, the Government intends to legislate to:

  • ensure that confidentiality clauses cannot prevent someone from making a disclosure to the police, or to regulated health and legal professionals who owe the individual a duty of confidentiality

  • require confidentiality clauses to set out their limits clearly, so individuals understand when they can still make disclosures to other people

  • make it compulsory for individuals to receive advice on the nature and limitations of any confidentiality provisions before they can enter into a binding settlement agreement

  • introduce enforcement provisions for confidentiality agreements that do not meet the new requirements.

The Government is not planning, however. to introduce mandatory wording for confidentiality clauses. Instead, it will work with stakeholders to produce guidance on drafting confidentiality provisions.

Again, the required legislation will be brought forward “when Parliamentary time allows”.

In the meantime, as this measure is likely to come into force, employers are advised to review any standard form confidentiality provisions in contracts of employment or settlement agreements before the proposals become law.