Last month the Government published the ‘Good Work Plan’ which proposes the introduction of many new rights for workers in addition to providing more clarity in relation to existing rights. The scope of the measures is so far reaching it has been described as "the biggest package of workplace reforms for over 20 years".
The implementation target for most of these reforms is 6 April 2020. The exception being that the maximum level of penalty that may be imposed by an Employment Tribunal will be increased from £5,000 to £20,000 for aggravated breach of a worker’s employment rights as of April 2019.
Written contracts for all
One of the most important new rights to be included is the extension of the entitlement to receive a written statement of particulars of employment to all ‘workers’. The current legislation limits this right to only “employees”.
Given that recent litigation in relation to the ‘gig-economy’ has shown that the definition of worker may be applied to a number of those currently described as being contractors or 'self-employed' it is likely that this will have a considerable impact.
The right to receive the statement of particulars will also be made a ‘Day 1’ right. The person engaged to carry out the work should receive the statement as soon as they start. In contrast, employers are currently only required to provide the employee with a written statement of particulars within two months of starting.
Additional information will need to be included in the statement too. This will include:
- The expected duration of the role or the end date of a fixed-term contract
- The notice required to terminate the contract
- Details of eligibility for sick leave and pay and maternity leave and paternity leave
- The duration and conditions of any probationary period
- Details about all remuneration - not just cash payments but also benefits in kind for example vouchers and lunch.
- The specific days and times that the work will need to be done
Holiday pay security
The right to paid holidays under the Working Time Regulations 1998 has generated a great of litigation and important changes are also planned for these rights too. Presently when calculating the holiday pay that is due for a worker with variable earnings the employer has to take an average of the pay received in the previous 12 week period. It is planned that from April 2020 the period to be taken into account in order to calculate their average pay shall be extended to a full year or 52 weeks.
This should lead to the holiday pay being the same no matter at what time of the year it is taken. Currently, individuals may not want to take their annual leave within the 12 week period following a particularly quiet period as it could result in lower paid holidays. Similarly, an employer may not want the workers to take leave immediately after they have been very busy and in receipt of increased payments due to overtime.
Encouraging consultation meetings
The Government wishes to encourage higher levels of employee engagement in businesses. It has therefore included in the draft legislation a requirement for a lower percentage of the workforce to request information and consultation arrangements. Employers will have to act if two percent of the workforce makes a request rather than as currently ten percent.
Better agency worker protection
Currently, agency workers may be given contracts which exclude the right to equal pay with the directly employed workers that the hirer has recruited. The exclusion will apply if the employment agency contract gives a right for the agency worker to continue to receive a minimum level of pay between assignments. This is known as the “Swedish derogation”. This has led in some cases to agency workers being engaged on long-term contracts on low pay with no gaps in assignments. The reforms will see this exclusion being repealed as of April 2020 which will mean that all agency workers will have the right to the same pay as directly recruited employees after being assigned to a hirer for at least 12 weeks.
Agency Workers under the Swedish derogation contract as at April 2020 will need to be given a statement informing them that they are entitled to the same pay and the Agency Worker will have protection against being dismissed by reason of this new right coming into force.
Further protection in the pipeline
Further Regulations are expected surrounding the other reforms that have been promised in the ‘Good Work Plan’ for which there is no implementation date as yet. These include:
- Amending the current legislation so that only a gap of four weeks or more will break continuity of service rather than as currently a gap of one week. This will mean many more individuals may be able to qualify for employment protection which often provides the employee is only eligible if they have worked for the same employer continuously for a number of weeks or even years.
- Introducing a right to request a more fixed working pattern for workers and employees after 26 weeks of service. These requests may be made by those on zero hours or flexible work contracts and could ask for a set number of hours or to fix the days on which they will work.
- Giving Agency workers the right to receive specific information concerning their contract, pay and deductions.
- Taking steps to help clarify employment status
- Introducing provisions to prohibit deductions being made from staff tips
- Creating an enforcement body to ensure rights to holiday pay and the rights of agency workers to protection are enforced.
Steps should be taken to prepare for these changes even though the implementation date for most of these reforms is not until April 2020. The more that a business is reliant on workers rather than employees with fixed hours then the greater the impact and the more that will be required from HR. All will need to ensure though that administrative systems will be put in place to ensure compliance with the new requirements surrounding written statements and the calculation of holiday pay.