The Good Work Plan: 12 months on, has it delivered its promises?
The Good Work Plan (GWP) was a government policy paper put together following a nationwide review of working practices. It was pitched as proposing the most radical change to employment law in 20 years and centred around the three main themes of fair and decent work, clarity for employers and workers, and fairer enforcement.
Another main objective of the Good Work Plan was to enhance the position of zero hours workers to better protect them with several recommendations, including considering a higher rate of national minimum wage for hours not guaranteed by an individual’s contract.
12 months on from its introduction, we speak to our employment law advisor, Anna Nelson, to review the implementation of the Good Work Plan and ask if it has delivered what it set out to do.
The introduction of the Good Work Plan aimed to enhance the position of ‘zero hours’ workers to make things fairer. Has this been the case so far?
Anna: “There were three main recommendations made in the GWP relating to zero-hour workers. These were; consideration of a higher rate of the national minimum wage for hours not guaranteed by an individual’s contract; the right for individuals working under zero hours contracts who had been in post for 12 months to request a contract that guaranteed hours which better reflected the hours they worked; and for any casual work contract – the rule providing that continuity was preserved if there was less than a week’s gap – should be increased to one month, as casual workers find it difficult to accrue certain rights because of gaps in service.
“However, not all these recommendations have come to fruition. The government decided not to take forward the proposal of a higher rate of national minimum wage for hours not guaranteed by a contract. Following the Department for Business, Energy and Industrial Strategy consulting on zero-hour workers having the right to request a contract which guarantees hours which more accurately reflect their actual working hours, this has not yet come into legislation.
“Looking at the continuity of service recommendation, the government has said it intends to legislate to extend the gap required to break continuity from one week to four weeks, but as yet, the timescale for this is unknown.
“Ultimately, we haven’t seen any tangible or legislative change to the rights of zero-hour workers because of the Good Work Plan yet. If the proposed legislation does come into place, it would go some way to protecting workers on zero-hour contracts, particularly those people that actually tend to work very regular hours.”
What other kinds of changes have employers have had to make as part of the Good Work Plan?
Anna: “Following the GWP, the government legislated to amend the reference period for calculating an average weeks’ pay for the purposes of calculating holiday pay from 12 weeks to 52.
“This change was made to account for seasonal overtime in holiday pay calculations because, when holiday pay was based on 12 weeks, a worker’s holiday pay could vary significantly depending on the time of year when they took the holiday.
“Another significant change was the additions required in the written statements of terms for employees and workers employed or engaged after April 2020. Employers now have to include more information to make the document as useful as possible – and the statement of terms document must now be provided on day one, whereas previously employers had two months until they legally needed to provide it.”
Have these changes to written statements of terms helped offer additional protection to zero hours workers?
Anna: “Including these points hasn’t directly provided extra protection as such, but it has provided clarity and certainty to workers on their terms of employment.
“Before the GWP, the statement of terms only had to be provided to employees, not workers. Workers’ rights and entitlements can be confusing and sometimes slightly unclear, so the requirement to give them this information immediately should help improve their awareness of their rights.”
Is there a particular sector or industry that will have been more affected by the Good Work Plan?
Anna: “Considering the legislative changes that have been introduced, the most affected industries will be those that are seasonal and employ seasonal workers, such as construction and retail.
“This is because these are the industries where the holiday calculations are likely to have changed most substantially, and they are also more likely to use casual workers to cover busy periods, meaning they now need to ensure that each worker is issued with a statement of terms on day one.”
Are employers that have not made the required changes following the GWP leaving themselves at risk?
Anna: “If a business has not started using the 52-week reference period to calculate holiday pay, it could face deduction from wages claims where workers have been underpaid on annual leave days. Workers can claim backpay for up to two years for these types of claims, so this could potentially be very costly.
“Making sure the required updates to statements of terms – which are usually included in the contract of employment or workers agreement – is also especially important. An employee or worker cannot bring a claim for these not being provided on its own, but if they bring another successful claim in tribunal – for example unfair dismissal or unlawful deduction from wages – they can tag on a claim for failure to provide a correct statement of terms and receive an additional compensation payment of up to four weeks’ pay.”
In summary, do you think the Good Work Plan has been successful in its objectives?
Anna: “Although the government’s commitments under the Good Work Plan were fairly extensive, the actual legislative change that has been made to date is relatively minimal. Clearly, the government has had other pressing matters to deal with over the last year or so, and perhaps over the next few years we will see other changes come into force as part of the GWP, but as yet, I don’t believe the Good Work Plan has made a significant impact.
“One of the key points highlighted in the GWP was the government’s commitment to refining employment status tests, however the proposed strategy for achieving this still remains unclear.
“Although we have seen key case law come through this year, namely the Supreme Court’s judgement that Uber drivers are classed as workers rather than self-employed, we still do not have any concrete guidance on this and so it remains an area of great uncertainty.
“We are also awaiting changes to the rights of zero-hours workers, which was another focus point of the policy paper, but another area in which we are yet to see any change.
“If the government does see through the commitments it made in the Good Work Plan, this could have a significant impact on the so-called gig economy, where there are still plenty of zero-hours workers and question marks over employment status.
Author: Anna Nelson, Employment Law Advisor at Howarths