The Government has set out its vision for the future of the UK labour market in “the Good Work Plan”, which has been branded as “the biggest package of workplace reforms in over 20 years”.
The Good Work Plan has been formulated by the Government in response to an independent review into modern workplace practices known as the “Taylor Review”, which was conducted in July 2017 by the Chief Executive of the Royal Society of Arts, Matthew Taylor. The review outlined 53 recommendations which were put to the Government for implementation.
The Government accepted the majority of Taylor’s recommendations in principle and launched a number of consultations to consider how best to implement these proposals. In December 2018, in response to the Taylor Review, the Government published the Good Work Plan which sets out its proposals to upgrade the UK’s labour market based around three key themes: fair and decent work, clarity for employees and workers and fairer enforcement.
This article will consider the Government’s key proposals and the changes that employers will need to be aware of from 6th April 2020.
New right to a written Statement of Particulars
Currently, employees who have been continuously employed for one month or more must be provided with a written statement of particulars within two months of commencing employment. However, from 6th April 2020 this will become a “day one right” and all new employees and workers will have the right to a written statement of particulars (contract of employment) from their first day of employment.
The Good Work Plan also expands upon the information that must currently be provided in a statement of particulars, including details on things such as benefits, training and other types of paid leave.
Protection for Agency Workers
Currently, agency workers are entitled to receive the same rate of pay and basic working conditions as a permanent worker once they have attained 12 weeks’ continuous service in the same role. However the “Swedish derogation rule” provides agency workers with the option to opt out of the right to equal pay in exchange for a guaranteed level of pay between assignments.
As of 6th April 2020, this “opt out” will be repealed to guarantee equal wages for both types of workers. It is hoped that this will encourage more employers to offer permanent roles providing more certainty for these individuals.
Agency workers whose existing contracts contain a Swedish derogation must be provided with written confirmation by the agency that this will no longer have effect on or before 30 April 2020.
Paid time off is a basic protection that all workers are entitled to and many businesses are diligent in making sure that individuals exercise this right. However, some individuals do not fully understand their entitlement or feel as though they cannot request leave from their employer. In order to combat this, the Government plans to launch a campaign to increase transparency and understanding surrounding holidays and entitlement to holiday pay.
Further, from 6th April 2020 the holiday reference period for individuals who work variable hours at variable rates of pay will increase from 12 weeks to 52 weeks. This means that going forward employers must look back at the previous 52 weeks to calculate an individual’s average weekly pay for the purposes of entitlement to holiday pay.
The right to request a more predictable and stable contract
It is expected that the Government will introduce the right for all workers to request a more predictable and stable contract after reaching 26 weeks’ service. Essentially, the Good Work Plan suggests that a worker on a zero hours contract who generally works 30 hours per week would be entitled to request a contract to reflect this upon having reached 26 weeks’ service. It is hoped that this will address the problem of “one-sided flexibility” with some workers remaining on atypical, insecure contracts for prolonged periods of time.
The Taylor Review also made recommendations for a higher minimum wage rate for non-guaranteed hours or hours that were not agreed at least a week in advance. However, the Government has opted not to implement this recommendation.
Clarifying employment tests
The UK has a flexible labour market which is beneficial for both employers and employees. However, this has also complicated the way in which working relationships are determined and presently it can be difficult to determine whether an individual is an employee, a worker or truly self-employed. Various tests have been established over the years to help determine employee status, however the Taylor Review has called for more clarity around these tests.
At the moment, the Government’s proposals on this topic remain unclear. However, it has pledged to review the area and clarify employment status tests, which amongst other things, will provide more clarity for individuals in relation to employee and worker’s rights and their respective tax obligations.
The Taylor Review highlighted that the UK has some of the world’s strongest employment rights, but concluded that the enforcement of these rights needs to be improved. In this regard, the Government plans to roll out a programme of reform which will aim to make it simpler to bring tribunal claims and enforce awards.
This will be implemented via the Employment Tribunal Project and the Civil Enforcement Project. The Employment Tribunal Project will make it simpler for individuals to pursue Tribunal claims and the Civil Enforcement Project will provide information and guidance on how to enforce claims if awards are not paid. The Civil Enforcement Project includes the development of improved information and guidance for those who are considering taking enforcement action, making it available online as well as in the form of paper leaflets. This will explain more clearly, in straightforward language, the options available for users to enforce unpaid judgments and awards through different enforcement methods. It is expected that employers could see an increase in Tribunal claims following publication of the Employment Tribunal Project.
Implications of the Good Work Plan
It is clear that the Good Work Plan will bring about some important reforms to the employment sector, beginning with the changes that will roll out from 6th April 2020. Going forward, the Government has pledged to introduce legislation to improve clarity on the issue of employment status reflecting modern working practices. However, it remains to be seen exactly how the Government will address this pressing issue raised as part of the Taylor Review.