Close

18th December 2018

Legal Issues – The Government’s Good Work Plan

In July 2017 Matthew Taylor and his team published their review of working practices in the UK. The review made a number of recommendations on employment law issues under four broad themes, namely employment status, rights for atypical workers, holiday and sick pay and legal enforcement.

In February 2018 the government released an initial response to the Taylor Review, pledging to make a number of legislative developments to protect the rights of workers. Around the same time, a number of consultations were launched by the government to get views on other potential improvements.

We now have the ‘Good Work Plan’ (GWP), a report from the Secretary of State for Business, Energy and Industrial Strategy. The GWP sets out in more detail the changes that the government intends to make to employment law. There are three key areas of focus in the report: fair and decent work, clarity for employers and workers, and fairer enforcement.

Fair and decent work

The GWP highlights that some employers may abuse casual / zero-hours contracts. To provide a safeguard against such practices, the government will allow employees and workers with more than 26 weeks’ service to request a fixed working pattern, e.g. for a minimum number of hours or work on particular days.

The government will also abolish the ‘Swedish derogation’, which currently allows employment agencies to avoid the equal pay provisions of the Agency Workers Regulations by employing workers directly and paying them between assignments. The government states that its research into the Swedish derogation showed that the loophole is being exploited in many instances.

The treatment of tips has been a hot topic in recent years, particularly in the hospitality sector, with complaints being made that employers are withholding tips or making deductions from them, often under the guise of administrative charges for processing the payments. In response to this, the government will make it unlawful for employers to make deductions from tips.

Clarity for employers and workers

It has been almost impossible to miss the media attention given to cases on employment status, such as those involving Uber, CitySprint and Addison Lee. In those cases, the tribunals had to consider whether those working under self-employment contracts were actually workers entitled to basic rights such as holiday pay.

Making that determination has generally involved a multi-factorial consideration of issues such as the contract in place and the arrangements in practice, with one often contradicting the other. With this in mind, the GWP states that new laws will be created to make it easier to establish employment status and make it more difficult for employers to avoid their responsibilities, although the actual detail of that legislation appears yet to be decided.

The government will also change the rules on the provision of contracts. At the moment, employees must be given a written statement of the terms and conditions of their employment within two months of their start date. When the new laws are in place, both employees and workers will be entitled to such a statement, which will be due when they begin working. There will also be more information required in the statement, such as entitlements to family-related leave.

Another issue that has been prevalent in the employment tribunals is holiday pay. The GWP highlights that some workers may be disinclined to take holiday as they are not aware of their rights, and in response the government will issue additional guidance and tools to combat this.

In addition, the reference period for calculating a week’s pay (generally used for those without fixed hours) will be increased from 12 weeks to 52. That change is being brought in to ensure that workers are not financially penalised for taking holidays after quieter periods of work.

Fairer enforcement

The government wishes to crack down on employers refusing to pay compensation to claimants. As well as ‘naming and shaming’ such employers, the maximum penalty for an aggravated breach of their obligations will be increased from £5,000 to £20,000.

Further sanctions will be made possible against employers who repeatedly breach their obligations, and duties will be placed on employment judges to consider the use of such sanctions.

The government also wants it to be easier for workers to be aware of their rights, and as such is proposing to create a new labour market enforcement agency to act as a single point of contact for individuals and employers.

What’s next?

When the Taylor review was published it was clear that the recommendations would lead to significant developments to employment law.

The GWP highlights the extent of the changes to be implemented, which should give a great deal more protection to individuals in the world of work. Of course, the flip side of that coin is that there will be many more obligations for employers to consider throughout the employee/worker lifecycle.

Given the seemingly endless Brexit quagmire, it is not yet clear how far up the government’s agenda these proposals are, but it seems likely that the coming years will be transformative for employment legislation. In the meantime, if you have any questions on any of the issues mentioned in the above article please contact Seanpaul McCahill.

18th December 2018