Latest insights from our experts
Government’s Good Work Plan – the most significant reform in 20 years?
The ‘Good Work Plan’
Following the Taylor Review of employee and worker rights, the Government has published a ‘Good Work Plan’ which it bills as the biggest reform in employment law in 20 years. The stated aim is to not only maintain but also enhance workers’ rights following Brexit. Draft regulations were laid before Parliament on 17 December 2018 and are scheduled to come into force on 6 April 2020 – although the regulations are not yet settled in law so may change.
The proposals contained in the regulations
Key proposed changes are:
1) The ‘Swedish Derogation’ will be abolished. This is where workers are directly employed by an agency, rather than the end user, which effectively exempts them from rights under the Agency Workers Regulations. This reform will mean that in no circumstances can agency workers receive less pay than their permanent counterparts.
Employers may see the cost of agency workers rising as a consequence.
2) Employers will be required to provide all workers with a written statement of particulars on or before their first day of employment. Currently, employers have up to 2 months to provide a written statement of particulars to employees whose employment will last for more than a month. The Government explicitly states that this written statement is to include details of rights such as eligibility for sick leave and pay and details of other types of paid leave, such as maternity and paternity leave.
We advise employers to ensure that all paperwork, including the written statement of particulars, is sent out (and ideally signed and returned) prior to the new worker’s first day. This is best practice and avoids a number of issues that may otherwise arise where a worker is allowed to start work before contract terms have been finalised.
3) Where a Tribunal concludes that an employer has breached any workers’ rights and considers there are aggravating features, a penalty of up to £5,000 may be payable to the Secretary of State. This maximum penalty will increase to £20,000.
Whilst this penalty is rarely imposed, we now see savvy claimants threatening to ask the Tribunal to award such sums, with a view to applying pressure on the respondent to settle a claim.
4) When calculating holiday pay, the reference period will be increased from 12 weeks to 52 weeks. The purpose of this is to ensure that atypical or seasonal workers are getting a fair amount of holiday pay. This may prove rather a mixed blessing to workers:
4. a) Focussing on 52 weeks may benefit workers taking holiday at a slack time of year; however
4. b) Workers taking holiday at the end of a busy period may find themselves being paid less.
Employers should ensure their holiday pay calculations will comply with the new rules in time for the change on 6 April 2020. If a change is necessary, inform your workers in advance.
5) Length of continuous employment determines entitlement to various employment rights, such as the right to a redundancy payment or to claim unfair dismissal.
Currently, a break of one week will usually break continuity. This will increase to four weeks. The purpose of this is to ensure that more workers have certain employment rights.
Employers should ensure that accurate records are kept of periods of employment. Casual employees in particular, may now have greater rights – so, be very careful before assuming that employees who work irregularly don’t have these rights.
Perhaps not surprisingly, we are not persuaded these reforms are really the biggest thing in employment law in the last 20 years. However, some of these changes could have a real impact on employers. While April 2020 may seem a long way away, it is never too soon to review your practices, especially around issuing contracts, calculating holiday pay and how you manage casual employees. If you need to make changes, it may be better to plan to introduce these over the next few months, rather than having to make far-reaching changes just before the deadline.