The following guide looks at the three main strands of the Government’s Good Work Plan, including what steps UK employers should be taking to assess and amend their current working practices to ensure they are compliant with the law.
Background to the Good Work Plan
Having been invited to develop proposals to improve the working lives of UK citizens, an independent review of modern working practices within the UK was undertaken by a panel of industry experts, headed by Matthew Taylor, the CEO of the Royal Society for the Encouragement of Arts, Manufactures and Commerce.
In particular, the panel examined how employers can benefit from new technologies and emerging business models, whilst ensuring the protection of workers’ rights in the UK.
The Good Work Plan is the government’s response to the Taylor review and is said to constitute “its vision for the future of the UK labour market.”
Following various consultations launched by the government as to how to approach the issue of implementation of some of the 53 recommendations made by the panel, the Good Work Plan also sets out how the government proposes to put many of these recommendations into practice.
Within the Good Work Plan the Government commits to a wide range of policy and legislative changes, not least to ensure that workers in the UK can access fair and decent work, that both employers and workers have the clarity they need to understand their employment relationships, and that the enforcement system for non-compliance is fair and fit for purpose.
The overall aim of the plan is to strengthen employment rights and improve working lives within the UK. As such, the proposed reforms will impact on all UK employers, regardless of the size or nature of the business, or the number of workers employed.
In December 2018 the Government published a number of employment law reforms that it planned to introduce as part of the “Good Work Plan”. Many of these proposals come into force on 6 April 2020.
Main provisions of the Good Work Plan
There are 3 main strands within the Good Work Plan, each of which is dealt with in turn below, namely:
- Fair and decent work
- Clarity for employers and workers
- Fairer enforcement
Fair and decent work
The first section of the Good Work Plan is intended to reflect the government’s commitment that fair and decent work should be available to all, in particular by improving the rights of intermittent and atypical workers.
As such, one of the main proposals under the plan includes the right for those working variable hours to request a more predictable and stable contract. This is a brand new right that will enable individuals on casual or zero-hour contracts with more than 26 weeks continuous employment to request a guaranteed minimum number of hours, as well as some certainty as to the days on which they will be required to work.
This right is expected to operate in a similar way to the current right to request flexible working. In other words, even though the right is simply to request a more predictable and stable contract, with no automatic right to be granted this request, the employer must still handle the matter in a reasonable manner otherwise risk being taken to an employment tribunal.
Under the proposed changes, a more lenient approach will also be taken to any break in continuous service. Under the present law a gap of just a week can break an individual’s continuity of service, such that that person may never build up any significant length of service despite working regularly for the same employer on and off, for several months or even years.
However, under the proposed changes, the period required to break an individual’s continuity of service will be extended from one week to four weeks, thereby helping those who work on a sporadic or casual basis to qualify for greater employment rights.
These greater rights can include, for example, the right not to be unfairly dismissed which requires an employee to have worked continuously for the same employer for a period of not less than 2 years.
Other proposals for fair and decent work include the following:
Greater protection for agency workers – the removal of the opt-out provision after 12 weeks for agency workers to get a guaranteed level of pay in exchange for the same level of pay as a permanent worker, will ensure these workers receive equal pay.
The right to be involved in workplace discussions – a reduction in the threshold required for a request to set up collective information and consultation arrangements from 10% to 2% of the workforce, will give employees a greater voice in the workplace in relation to redundancy. The 15 employee minimum threshold for initiation of proceedings will, however, remain in place.
Ensuring tips and gratuities are passed directly to the worker – a prohibition on deductions from staff tips will ensure that tips are passed directly to the individual, rather than being taken by the employer.
Clarity for employers and workers
The second section of the Good Work Plan reflects the government’s commitment to bring about greater clarity in the law and within employment relationships, with much of the focus on improving communication and certainty within the working relationship for both employers and workers alike.
One of the key proposals here is the right of workers to receive a written statement of particulars containing the main terms and conditions of their employment. Under the present law, only employees are entitled to receive a written document setting out their basic terms, for example, relating to pay, hours and place of work. By extending this right to workers, this should bring clarity for many individuals regarding their contractual rights and obligations.
Further, employers currently have a period of two months in which to provide a written statement of particulars to employees, but this will change so that the document must be provided on day one. In this way, the parties will be clear from the outset as to the basis of their working relationship, and this will apply to both workers and employees.
The information to be included in the written statement is also being expanded. Under a new comprehensive statement of particulars, the additional information that an employer must provide to a new starter is as follows:
- How long a job is expected to last, or the end date of a fixed-term contract
- The duration and conditions of any probationary period
- Which specific days and times workers are required to work
- How much notice an employer and worker are required to give to terminate the agreement
- All remuneration, not just pay
- Details of eligibility for sick leave and pay
- Details of other types of paid leave, such as maternity and paternity leave.
Specifically for agency workers, the government plans to tackle the lack of transparency in their terms and conditions through the provision of a Key Facts Page. This will need to be a written document provided to each agency worker by the employment agency at the start of each assignment.
The Key Facts Page will need to include:
- The type of contract a worker is employed under
- The minimum rate of pay that they can expect
- How they are to be paid
- If they are to be paid through an intermediary company
- Any deductions or fees that will be taken
- An estimate or an example of what this means for their take home pay.
In this way, agency workers will be better able to understand the basis upon which they are employed, including who is responsible for paying them and what deductions they are making.
Perhaps, however, the main focus under section 2 of the Good Work Plan relates to clarification of employment status as between employees, workers and the self-employed.
In the UK it is an individual’s employment status that determines which statutory employment rights apply and how much tax they are required to pay. However, with the recent introduction of various new business models and employment practices, this has caused increasing confusion about the employment status of individuals.
In particular, it is accepted by the government that more guidance is needed for individuals to ascertain their employment status, with a test that reflects the reality of modern working relationships.
It is also accepted that having separate frameworks for determining employment rights and the payment of tax is especially confusing, where clearly legislative changes are needed to align the tests for determining status for employment and tax purposes.
Needless to say, this is a much-needed area for review, and whilst the government has committed to further align the employment tribunal assessment of employment status with that of HMRC, it remains to be seen exactly how the government will seek to address and resolve these issues.
The third section of the Good Work Plan reflects the government’s commitment to ensuring fair enforcement when the law is broken, and furthermore, that it remains fit for purpose within the modern labour market. Promoting justice and protecting the vulnerable are the central aims of these proposals.
In particular, in addition to the existing prospect of facing enforcement proceedings, where a penalty notice can be issued to up to 50% of the unpaid award, under new proposals employers who fail to pay a compensation award made against them in the tribunal will be publicly named and shamed.
Other proposals for fairer enforcement of employment rights include:
Expanding the remit of the Employment Agency Standards Inspectorate –an extension to the powers of the EAS Inspectorate here would be made to cover the enforcement of agency worker rights in relation to umbrella companies.
State enforcement for non-payment of holiday pay to assist vulnerable workers – new legislation would allow vulnerable workers who have not received their holiday pay entitlement to raise a complaint and the state enforcement body to pursue payment of arrears on their behalf.
When will the Good Work Plan proposals come into force?
Since the publication of The Good Work Plan, the government has introduced various statutory instruments to amend existing legislation to put its proposals into effect, namely:
- The Agency Workers (Amendment) Regulations 2019
- The Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018
- The Employment Rights (Miscellaneous Amendments) Regulations 2019.
With the exception of Parts 1 and 2 of the Employment Rights (Miscellaneous Amendments) Regulations 2019 that came into force on 6 April 2019, increasing the maximum penalty that employment tribunals can impose for aggravated breach of a worker’s rights from £5,000 to £20,000, the remainder of these statutory provisions will come into force on 6 April 2020.
Although not all of the proposals contained within the Good Work Plan are due to be implemented under these provisions, many of the key changes will take effect on this date.
Ensuring compliance with the new rules
As a UK employer looking to remain legally compliant, you will need to consider each and every element of the Good Work Plan, including exactly when and how each of these proposals are due to translate into UK law.
This should include identifying any areas of risk within your existing working practices and considering what changes may need to be implemented.
In particular, employers will need to review their current contracts and recruitment processes to ensure that more comprehensive information is included in any contract or written statement of particulars to be given to new starters. Procedures will also need to be in place to ensure that this documentation is issued on or before the first day of work for both workers and employees.
Needless to say, these changes represent a significant overhaul of UK employment law, and employers across the UK will need to be thoroughly prepared for the additional administrative and legal responsibilities.
Please note, given that the majority of the 53 recommendations made under the Taylor review are to be implemented in Spring 2020, the matters set out above are by no means exhaustive. You may, therefore, want to seek expert legal advice from an employment law specialist as to what specific changes will impact on your business and how practically these changes can be addressed.
DavidsonMorris are experienced employment law specialists, with expertise in supporting employers with strategic HR and employment legal risk management. We can provide guidance on what the Government’s latest proposals mean for your organisation, its policies, systems and workforce planning and management programmes.
If you have a question or need advice about the Good Work Plan and its implications for your organisation, contact us.
Good work plan: FAQs
What is the Good Work Plan?
The Good Work Plan is the Government's response to the independent Taylor Review of Modern Working Practices in July 2017. The Good Work Plan aims to ensure workers have a better understanding of their employment rights and relationships.
What is a worker?
A 'worker' is an employment status covering individuals who personally carry out work or a service for another party under either a contract of employment or any other contract.
When does the Good Work Plan take effect?
Key provisions of the Good Work Plan take effect in April 2020. Employers must comply with all the necessary requirements by this date.