The Good Work plan is a Government strategy which aims to improve the quality of work in the U.K. This will include a wide range of policy and legislative changes that employers, employment agencies and intermediaries need to keep a watchful eye on.
In simple terms there are 3 elements to the Good Work Plan:
- Fair and decent work;
- Clarity for employers and workers; and
- Fairer enforcement.
There are many important changes employers should watch out for.
The good news is, if you are subscribed to W&P’s policy update service all this work will be done for you in readiness for April 2020
Some of the important changes are…
Fair and Decent Work
For the first time the government is placing the same importance on the quantity and quality of work. This means that employers must ensure that work is fair and decent with a realistic opportunity for individuals to develop and progress. There are many elements to this but the message is clear: employers that transfer their business risk to their employees by issuing unclear or onerous contracts (known as one-sided flexibility) especially in respect of agency workers will face severe penalties under the new policy and legislation changes.
Naming and shaming employers
A small minority of employers continue to ignore or breach the terms of the tribunal award. So, a new ‘name and shame’ scheme has been introduced, which will name those Employers that have failed to pay Employment Tribunal awards within a reasonable time. This information will be made available to the public on the Governments website.
Ban on making deductions from staff tips.
Some employers deduct administration fees and adopt systems for managing tips such as TRONC schemes. This means that employees are not receiving the full amount of the tip which they rightfully deserve, which is unfair.
The Government will legislate to prohibit or limit this practice. It will be the responsibility of the employer to ensure there is complete transparency on how they handle and distribute tips. There is also plans that may forbid businesses from setting recommended tips to ensure businesses don’t benefit at the expense of their hard-working staff.
Stable and predictable contracts
Many organisations now use zero hours contracts, most offer these legitimately as it provides genuine business flexibility that’s gives them a commercial edge. The same applies to employees who like the freedom and flexibility to balance their professional lives with their personal lives. However, some organisations abuse the system and so employees who work regular consistent hours over many months may still not be able to get credit or a mortgage because a zero- hour contract has no guarantee of work where clearly one exists. Therefore, the Government plans to introduce new legislation where workers can request a more stable and predictable contract after 26 weeks of employment.
These requests would be dealt with similarly to a flexible working request, with the employer having three months to respond.
Extension of the lapsed time to establish continuity of employment.
In the Taylor report, Matthew Taylor identified that employees that work intermittently over time find it difficult to gain or access some employments rights. Currently a break of one complete week’s service ending on a Saturday, can sever continuous employment. However, under the new proposals this will be extended to four weeks. Employers will need to look carefully on how this could impact them, such as holiday pay entitlement & full employment rights etc.
Increased penalties for aggravated employment law breach.
The maximum penalty for aggravated breaches of employment law rose from £5,000 to a staggering £20,000 in April 2019. Aggravated features are defined as a breach of employment law and that breach has, “one or more aggravating features”. It suggests that organisations that have a dedicated Human Resources Department are more likely to be fined because they should know better. Another major feature asks: Was the breach malicious or deliberate? If it was the maximum penalty is likely to be applied.
Agency workers: the end of the Swedish Derogation.
The Swedish Derogation allows businesses to avoid giving pay parity after 12 weeks of continuous employment, which means agency workers are effectively being discriminated against because their pay is less than an employee. The government is bringing forward legislation to the repeal the Swedish Derogation and banning this type of contract from April 2020. This means that all agency workers, will be entitled to, “the same basic working and employment conditions” as if they had been recruited directly by the business.
There are currently 3 types of employment status: employees, workers or self-employed. However, defining this can be very difficult because there isn’t a clear definition to rely upon; a Tribunal will consider a series of tests to determine status.
The Government will bring in legislation to improve employment tests so there is a clear definition of the types of employment status. It is suggested that an online tool will be developed for employers and employees to use in order to determine employment status.
Terms and Conditions of Employment
Currently employers must provide a written statement of employment no later than two months after employment commenced. From April 2020 this will change to day one of employment and applies to all workers and employees. Employers will be required to provide “mandatory content” in the written statement including any additional information that may be contained in a staff handbook. There will be additional information over and above the mandatory information employers currently must provide, which is as follows:
- How the long the job is expected to last or the end date if a fixed term contract
- How much notice and employer and worker are required to terminate the agreement
- Details of eligibility to sick leave and pay
- Details of other paid leave such as maternity/paternity pay
- The duration and conditions of any probationary period
- All remuneration (not just pay) for example voucher schemes
- The specific days and times workers are required to work
If employers fail to provide a statement, they run the risk of being taken to an Employment Tribunal where up to four week’s pay could be awarded in compensation. Account needs to be made of the management time and legal fees involved as well, as preparing for any tribunal is time consuming and expensive.
Currently the reference period for holiday pay is based on a 12-week period. However, for seasonal businesses this may be detrimental to employees who work long hours during peak demand and fewer during times of low demand. To smooth this out the Government is proposing to extend the reference period to 12 months from April 2020
The Taylor review highlighted that awareness of entitlement remains one of the biggest barriers to individuals receiving the holiday pay they deserve. So, the government will introduce new guidance including real life examples to support the interpretation of holiday pay rules.
Voice and Autonomy
The Taylor review highlighted that for work to be fair and decent, workers must have a voice. Currently, if organisations wish to introduce major reforms or restructure their business they must consult with the workforce and get at least 10% to support it. The new legislation reduces this to just 2%, however the 15 -employee minimum threshold for initiating proceedings will remain.
There is no doubt that the Good Work Plan has far reaching implications for employers both in terms of their internal governance systems but also the potential commercial impact to their businesses.
All organisations need to start planning for this NOW. Employers should understand where their businesses currently sit in respect of employment law compliance and plan how these will need to be amended to meet the changes that are coming in April 2020 and beyond.
Most certainly all HR and Recruitment Policies and Procedures will need to be reviewed and amended to reflect the new Legislation, including staff handbooks & contracts of employment.
The good news is, if you are subscribed to W&P’s policy update service all this work will be done for you in readiness for April 2020.
Find out more about W&P’s Compliance Services here or call our team on 01305 767104.