Last reviewed 23 January 2019
The Government announced the “largest upgrade in a generation to workplace rights” upon release of its Good Work Plan in December 2018.
Following an independent review carried out by Matthew Taylor, published as the Good Work: the Taylor Review of Modern Working Practices in July 2017, recommendations were made to ensure “good work” was a key consideration of modern ways of working. A full review of these recommendations was carried out by the Government, who confirmed in early 2018 that it had accepted nearly of these with some enhancements in certain areas. A new plan was announced with four consultations subsequently released to seek views from interested parties on how these measures should be adopted.
The new Good Work Plan sets out the Government’s final response to 53 recommendations on workers’ rights, enforcement and ensuring clarity for employers and workers. As a next step, the plan sets out the mechanisms to be used to take these measures forward, with a raft of new legislation announced. Finalised and draft regulations have subsequently been published containing further details on implementation.
Under the heading “Improving clarity” the Government announced it would be extending the statutory right to receive a written statement of main particulars to those with ”worker” status. Under the Employment Rights Act 1996, only ”employees” are legally entitled to receive a written statement setting out the terms and conditions of their role. The draft Employment Rights (Miscellaneous Amendments) Regulations 2019 confirm that this new right for workers will be introduced from 6 April 2020. Businesses that employ those with ”worker” status will need to ensure they are providing those members of staff with a written statement of terms to avoid breaching their rights.
As well as widening entitlement, from 6 April 2020 the information that is legally required to be included within the statement will be extended to cover: details relating to sick leave and pay; details of other types of paid leave; the duration and conditions of any probationary period; all forms of remuneration such as benefits in kind; and any indication of the days and times workers may be required to work. The time period to provide individuals with this statement will also be significantly reduced to make this a day-one entitlement. This means businesses that normally make use of the current two-month window to provide the statement, even though employees become entitled to the document once they reach one month’s service, will need to update their internal practices. Although more time will be spent on administrative matters prior to the individual’s first day of employment, providing the document immediately avoids the risk of businesses forgetting to supply such a statement, especially where their staff turnover is high.
Although employment rights are determined based on the employment status of an individual, it has long been recognised that the identification of status is difficult for both parties. There are significant grey areas, numerous definitions contained within legislation and tests which can be used in practice; although whether these have been correctly applied will usually only be confirmed upon consideration by an employment tribunal. To address this uncertainty, the Government has confirmed it will introduce legislation to clarify employment status with no date for implementation yet announced. Whether further legislation is the appropriate method, and will introduce the necessary clarity for businesses considering the question of status, will be examined closely in the future.
Significant changes to the contractual arrangements businesses can adopt with agency workers have also been confirmed. The Good Work Plan and the draft Agency Workers (Amendment) Regulations 2019 prohibit the future use of ”Swedish derogation” or ”pay between assignment” contracts. Under these types of contracts, agency workers are employees of the employment business and receive consistent pay even when they are not undertaking an assignment. It is believed, however, that these contracts are exploitative as they exempt the agency worker from their right to receive equal pay treatment once they reach 12 weeks’ continuous service within an assignment. Businesses will no longer be able to use these contracts from 6 April 2020, and they must provide a written statement to any agency workers employed in this way by 30 April 2020 explaining that they are now entitled to equal pay treatment after an assignment lasts 12 weeks. Although this change will only affect businesses that operate these contracts, all agency workers will have a future right to receive a “key facts page” which sets out important information relating to matters such as pay. The Government is yet to confirm the specific details to be contained within the page, or any potential implementation date, but businesses will be required to communicate with third-party hirers to receive accurate information, before providing a further document to their agency staff.
Amendments to enforcement strategies have also been announced. With effect from 18 December 2018, businesses who fail to pay claimants their tribunal compensation awards can be ”named and shamed” by the Department for Business, Energy & Industrial Strategy (BEIS). In a similar method to the current National Minimum Wage (NMW) “naming and shaming” initiative, claimants can report businesses that have not paid compensation. The BEIS will issue a naming notification letter to the business and, unless valid representations are received, the business will be included on a public list released by BEIS. This has the potential to create a significant reputational risk for businesses that do not comply with tribunal pay awards. Additionally, from 6 April 2019, the fine for an aggravated breach of worker rights will quadruple from £5000 to £20,000 creating a substantial penalty for organisations that commit a repeated breach of their staffs’ rights.
Further changes to be introduced under the Good Work Plan include:
Introducing legislation to provide a right for all workers to request a more stable contract once they reach 26 weeks’ service. Although little detail is known about this new right, it is likely that businesses will be required to handle this request in a reasonable manner, in a similar fashion to flexible working requests. While potentially providing greater certainty, businesses with staff on flexible contracts will experience a time cost in handling, and considering, such requests.
Extending the time period required to cause a break in service from one week to four weeks. This will provide more members of staff with continuous employment where they undertake intermittent work for the same employer, making it more important for businesses to accurately record any periods of work carried out.
From 6 April 2020, the reference period for calculating holiday pay for variable workers will increase from 12 weeks to 52 weeks resulting in a fairer calculation for those with fluctuating working periods. The enforcement of holiday pay will also move from employment tribunals to a state enforcement body, making it more likely that businesses will face a proactive review of their holiday pay practices.
The threshold to be reached before employers can be requested to set up information and consultation arrangements will be reduced from 10% to 2% of the workforce. With effect from 6 April 2020, this change will make it easier for employees to set up formal communication arrangements which businesses will have to comply with.