Background
Back in 2016 the Government asked Matthew Taylor, Chief Executive of the Royal Society of the Arts, to undertake a review in to modern working practices in the UK. This was largely in response to a long line of cases challenging the status of workers within the growing “gig economy”. His report, the Taylor Review on Modern Working Practices, was published in July 2017 to much fanfare. Unfortunately however it received somewhat of a lukewarm reception with many feeling it did not go far enough and left a number of important issues unaddressed.
The Government’s response to the Taylor Review was to launch a number of consultations into various issues including employment status, enforcement of employment rights and agency worker rights amongst others. In December 2018 the Government published its long awaited response to the Taylor Review; the Good Work Plan. The Good Work Plan outlines the changes the Government proposes to make following the Taylor Review. Whilst there are some important changes lined up, key issues remain unresolved. For example, the much needed reform to the current employment status tests to make it easier for individuals (and employers) to correctly establish their status and associated rights. The Good Work Plan simply reiterates the Government’s commitment to legislating to improve the clarity of the employment status tests and to improving the guidance and online tools available to help people understand their status but provides no details of when this is going to happen or how they envisage making these changes.
Prospect, the leading trade union representing professionals in the UK, has dubbed it the “not good enough work plan”.
So what do employers and HR professionals need to be aware of?
Key proposals affecting you
- Extending break in continuous service
The Taylor review identified difficulties casual workers can have in building up sufficient continuous service to qualify for employment rights where they work intermittently for the same employer with only very short breaks between each period of work. In view of this the Government has confirmed that it is going to legislate to extend the break-in-service period from 1 week to 4 weeks. No date has yet been given for the implementation of this change. - Right to request a more stable contract
The Taylor Review was concerned that some employers abuse the use of flexible working arrangements and that they transfer too much of the risk of these arrangements on to workers. The Good Work Plan gives the example of workers who can remain on insecure contracts for a long time when their working patterns are actually the same as permanent employees who have fixed, regular hours.
In response to this the Government has confirmed its intention to address these concerns by giving workers the right to request a more predictable and stable contract from their employer. This means that after 26 weeks’ service workers will be able to request a more fixed working pattern for example a contract that guarantees the days of work or number of hours of work each week. Individuals who are happy to work varied hours each week will be free to continue to do so.
This will be a right to request a more stable contract which implies there will be grounds on which an employer can refuse. As yet no details of the process have been provided so we are not yet clear on the reasons employers may be able to give for refusing a request or when this change will take effect.
- Section 1 statement
Currently employers are required to provide employees with a section 1 statement within the first two months of employment. The statement sets out the basic terms of employment as required under the Employment Rights Act 1996. The Government has confirmed its intention to extend the right to a section 1 statement to all workers. In addition to this both employees and workers will have the right to a section 1 statement from day one.
This change will apply to new employees who begin employment on or after 6th April 2020 and for workers who begin their engagement on or after that date.
- Holiday pay rights
The Taylor review highlighted problems faced by some workers whose average weekly earnings vary throughout the year for example seasonal workers. At the moment, when calculating their holiday pay you work out their average earnings over the preceding 12 week period. The problem with this approach however is that it could mean the amount of holiday pay they receive is significantly less if they take holiday immediately after a period of reduced work.
In light of this the Government has confirmed it will extend the reference period to 52 weeks (or the full period of employment if individuals have less than 52 weeks) to give a more accurate representation of a typical weeks’ pay.
This change is due to come into force on 6th April 2020.
- Penalties for defaulting employers
The Government proposes to name and shame employers who fail to pay Employment Tribunal awards in an attempt to increase compliance. If an employer fails to pay an award when prompted they will go on a list for publication. This list will be updated every quarter and will apply to all Employment Tribunal awards registered with BEIS (Department for Business, Energy and Industrial Strategy) on or after 18th December 2018.
In addition to the above, the Government is also going to increase the maximum financial penalty for employers’ aggravated breaches of employment rights from £5,000 to £20,000.
