Business, Employment Law

The end of Employment Law as we know it? The Good Work Plan and what you need to know about it.

Our team of specialists are ready to help your business today

Published in December 2018, the Government’s Good Work Plan was billed as proposing some of the most radical changes to employment law in a generation. The policy paper circled around three main themes: fair and decent work; clarity for employers and workers and, fairer enforcement and set out numerous employment law reforms which promised to be revolutionary in nature.
In spite of the initial fanfare of the Good Work Plan’s introduction, there are still no fixed dates for the implementation of any reforms and with the ongoing Brexit negotiations still at the fore, an introduction any time soon seems unlikely. The headline commitments are outline below, but at present there are no specific requirements for employers to make any adjustments to their current practices. That said, the Good Work Plan does seek to improve upon and clarify “best practice” and we would not seek to advise an employer against implementing measures which seek to reflect the intention of the Good Work Plan.
Fair and Decent Work
It is this section of the Good Work Plan which proposes the most tangible changes to the current law and seeks to introduce some brand new entitlements for workers. If and when there are any changes to the law in this regard introduced then Howarths will advise accordingly.
Highlights of the proposals include:

  • Right to request a more predictable and stable contract

This new right will mean that an employee can request a more “predictable and stable” contract after 26 weeks of employment. Employees may be able to request a guaranteed minimum number of hours and certainty as to the days on which they will be asked to work.
This new right is proposed off the back of recent high profile cases involving zero hours workers and will seek to address some of the shortcomings with this form of contract. It seems likely that these type of request will be dealt with in a manner similar to existing practice relating to flexible working requests with employers being given a broad scope to make a refusal.

  • Break in continuous service

Presently, a gap of just one week (that includes two Saturdays, oddly enough!) is sufficient to break an individual’s continuity of service. As highlighted by the Taylor Review, this current provision means that, in spite of providing service to an employer for months or even years on a more ad hoc basis, individuals can never obtain continuity of service.
It is proposed that the current break period be extended from one week to four weeks to make it easier for those who work in a more casual or sporadic way to secure the benefits which continuity of service bring. Although there is no apparent downside to this proposal, it remains to be seen how many individuals will actually benefit from this proposal given that continuity of service is only relevant to employees. Most individuals working intermittently with gaps of up to four weeks are unlikely to be able to attain employment status and therefore benefit from this proposal.

  • Protecting Agency Workers

Currently, after 12 weeks of service an agency workers is entitled to receive the same level of pay as a permanent workers unless the agency worker opts out of the right and elects to receive a guaranteed level of pay between their temporary assignments.
This opt out is referred to as the “Swedish Derogation” but because it can leave agency workers financially worse off, the Good Work Plan proposes its abolition in April 2020.

  • Tips and Gratuities

Rules will probably be implemented to ensure that tips are passed directly to the individual employees, rather than to the employer and to prevent deductions being made from any tips or gratuities made.

  • Information and Consultation arrangements

Presently, at least 10% of a workforce is needed for a successful request from employees to be given the right to be involved in workplace topics including redundancy proposals but this is expected to reduce to 2% in April 2020.
Clarity for Employers and Workers
The focus of this section of the Good Work Plan is on improving communication and certainty in the working relationship. The main reforms which have been proposed include the following.

  • Employment Status Tests

Again, off the back of several high profile cases regarding employment status, the Government has pledged a commitment to improving the clarify of the current employment status tests for employees, workers and the self-employed.
In Howarths’ view, this is the most significant proposal the Good Work Plan makes and if legislation to provide a clear definition of the different categories of individual is introduced, it make cause some controversy. The current proposal is to place greater emphasis going forward on the degree of control exerted by the employer and to move focus away from personal service and contractual substitution rights.
Most employment lawyers would argue that this is certainly an area which needs review however at present, in spite of a comprehensive consultation into this area of employment law there are no details as to how this clarity is going to be provided. Although we can hope for legislation, it is likely that the Government will only seek to provide some codification of existing case law principles but we await further detail with bated breath!

  • Statement of basic terms

From April 2020, it will not just be employees who are entitled to receive a written statement of the particulars of their employment: the right will also be extended to workers. Employers will also have to issue contracts on the first day of employment, instead of issuing before the expiry of the current two month window.
This measure will ensure that both parties are clear from the outset as to the terms of their relationship and going forward, contractual documentation will need to include additional information including details of paid leave entitlements and probationary periods.

  • Key terms for agency workers

As well as providing employees and workers with additional clarity, employers will also have to afford agency workers a similar right. It is proposed that employers will have to provide every agency workers with a document likely to be known as a “Key Facts Page”. This document will have to include details including the nature of the contractual arrangement in place; the minimum rate of pay which they will receive and any fees or deductions to which they may be subject.

  • Holiday Pay

The reference used to calculate holiday pay will be extended from 12 weeks to 52 weeks. This will be of most benefit to those individuals who currently work variable hours because currently, a worker may get different rates of pay during holidays taken, depending on how many hours they worked in the three months leading up to the leave.
Fairer Enforcement
The third and final section of the plan focuses on the promotion of justice to ensure that the most vulnerable members of the workforce are protected. These central aims are hoped to be achieved through the implementation of the following.

  • Naming and Shaming

Although this practice already occurs in some cases, the Good Work Plan proposes that all employers who do not pay the compensation awarded by an Employment Tribunal following a successful claim will face both enforcement proceedings and the prospect of being publicly named and shamed.

  • Umbrella Companies

Umbrella companies have long been eyed with a certain amount of suspicion when it comes to the treatment of individuals who provide services thereunder and going forward the remit of the Employment Agency Standards Inspectorate will be extended to cover these types of companies.

  • State Enforcement of Holiday Pay

Currently, when an employer does not pay holiday pay correctly, the aggrieved individual has to bring Employment Tribunal proceedings. In future, there will be a state-led enforcement regime to assist the (as yet undefined) “vulnerable”.

© 2022 Howarths UK