While 2019 is likely to be dominated by Brexit developments, it is also set to be an eventful year for employment law, as the Government implements its Good Work Plan (Department for Business, Energy and Industrial Strategy (DBEIS), 2018). Hailed as ‘the biggest package of workplace reforms for over 20 years', it is the culmination of the Taylor review into working practices in the modern economy, which made key recommendations to promote ‘good work’ (Taylor, 2017).
Background
In July 2017, the Government published the independent review Good work: the Taylor review of modern working practices, which looked into issues in the UK labour market, such as the implications of new forms of work, the rise of digital platforms and the impact of new working models (Taylor, 2017).
The review made 53 recommendations and in February 2018, the Government published a full response, the Good Work Plan, accepting the vast majority of the recommendations (DBEIS, 2018). Alongside the response, the Government also launched four consultations to seek stakeholder views on the approach to implementing changes to the law on:
The Good Work Plan draws on the feedback from these consultations and sets out the Government's commitment to improve working conditions for agency workers, zero-hour workers and other atypical workers in the UK economy. As the Taylor review identified, the British model of flexibility works well. However, the plan states that, as workers potentially benefit from the rise in more flexible and varied ways of working, it is imperative that the Government prevents erosion of the key protections that those workers should expect to be able to rely on.
The timetable for implementation of all aspects of the plan is not yet laid out, but, as 2019 progresses, we can expect to see more draft legislation being published, and it is likely that most of the changes will take effect in 2020. This article covers some of the main measures specified in the Good Work Plan.
Employment status tests
There is no question that existing employment status tests have contributed to a lack of clarity faced by individuals and employers. Recent cases on worker status involving ‘gig’ employers, such as Uber, Citysprint and Deliveroo, serve to illustrate this point.
In the Good Work Plan, the Government has recognised that having separate frameworks for determining employment status for the purposes of employment rights and tax makes it very confusing for individuals and employers. It comments that this can drive behaviour detrimental to workers and that it is also more likely to result in non-compliance from a tax perspective.
The Taylor review had recommended that renewed effort should be made to align the employment status frameworks for the purposes of employment rights and tax to ensure that the differences between the two systems are reduced to an absolute minimum. The Government agrees that this is the right ambition and plans to bring forward detailed proposals on how the frameworks could be aligned and do more to help individuals and businesses understand their rights and tax obligations in light of emerging business models.
This is an area that employers will want to monitor very closely. As recent case law has shown, it is notoriously difficult to determine whether an individual or self-employed contractor is a worker or an employee, and this can lead to significant business risk and exposure to claims for back payment of wages. The Taylor review had highlighted that an individual can have nearly every aspect of their work controlled by a business (from rates of pay to disciplinary action) and still be considered to be self-employed if a right for the individual to send a substitute to work in their place exists. The Taylor review recommended that the tests that determine whether someone is self-employed or has workers’ rights should place more emphasis on control and less on the notional right—rarely exercised in practice—to send a substitute, reflecting new business employment models. The government has agreed with this conclusion that businesses should not be able to avoid their responsibilities by trying to misclassify or mislead their staff.
Contracts after 26 weeks
The original proposal under the Good Work Plan was for workers to be given the right to request a more stable and predictable contract after 26 weeks in post. It was considered likely that this would be similar to the existing right to request flexible working and would be clarified in future draft legislation. However, in the Government's consultation on measures to address ‘one-sided flexibility’ in the workplace, which was published on 19 July 2019, it went further and stated that it would accept the recommendation made by the Low Pay Commission for workers to have a right to switch to a contract that reflects their normal working hours. There is no proposal to ban the use of zero hours contracts.
Continuity of employment
An increase in the time required to break continuity of employment from the current 1 week to 4 weeks is planned. Effectively, this could mean that someone intermittently working for an employer once a month could gain continuous service.
Continuous service is important because many employment rights are earned over time (for example, the right to claim unfair dismissal or a statutory redundancy payment). Those who work intermittently for the same employer may struggle to build up continuous service and can therefore find it difficult to gain, or access, some of these rights. At present, for calculating employment rights, a gap of 1 week in employment with the same employer can break what counts towards continuous service. The Government has said that, to reflect the changing world of work, it will legislate to extend this break to 4 weeks, allowing more employees to gain access to employment rights.
Information and consultation arrangements
The Government would like to encourage higher levels of employee engagement in business. Draft legislation has been issued to reduce the threshold number of workers required to request information and consultation arrangements from 10% to 2% of the workforce, with effect from April 2020.
By way of background, the Taylor review had highlighted that, for work to be fair and decent, both employees and workers must have a voice, and that high levels of engagement improve organisational performance and boost productivity. It examined the existing information and consultation regulatory framework and emphasised that, in order for the rights to be more accessible, the threshold of agreement required for information and consultation arrangements to be implemented needed to be reduced. Currently, a request to set up such arrangements requires at least 10% of, and a minimum of 15, employees to support it.
The government has stated that lowering the threshold required to set up information and consultation arrangements is an important step in improving their voice in the workplace. The 15-employee minimum threshold for initiation of proceedings will remain in place.
Ending the ‘Swedish derogation’ in the Agency Workers Regulations 2010
The ‘Swedish derogation’ excludes agency workers from the right to equal pay with permanent employees in the same role if they have an employment contract that guarantees pay between assignments.
The Agency Workers (Amendment) Regulations 2019 are due to come into force on 6 April 2020 and will remove this derogation from the Agency Workers Regulations 2010 to give agency workers a right to pay parity with permanent comparable employees after 12 weeks.
Workers' right to a written statement of terms
The Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018 are due to come into force on 6 April 2020. These bring in a right for workers to be provided with a written statement of terms on the first day of employment, rather than within the first 2 months, as required by the Employment Rights Act 1996. They also add to the amount of prescribed information that a written statement must contain and amend the Working Time Regulations 1998 to increase the reference period for determining an average weekly pay (for the purposes of calculating statutory holiday pay) from 12 weeks to 52 weeks. This will protect workers with no normal working hours whose pay fluctuates.
» The Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018 are due to come into force on 6 April 2020. These bring in a right for workers to be provided with a written statement of terms on the first day of employment «
It is worth noting that, from April 2019, all workers must be provided with an itemised pay statement. The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order 2018 will require itemised payslips to contain the number of hours paid when a worker is paid hourly.
The Government's current consultation on one-sided flexibility includes the Low Pay Commission's recommendations that workers be provided with the right to reasonable notice of their working hours, compensation for cancellation or curtailment of their shift without reasonable notice, and the right to a contract that recognises their normal working hours. The Government has stated that it will consider whether this additional information should be included in the written statement of terms following the outcome of the consultation.
Further consultation: proposals to support families
On 19 July 2019, the Government published Good Work Plan: proposals for families, setting out three separate consultations with the aim of better supporting parents to balance work and family life. Although these have been launched under the Good Work Plan banner, they are in fact new proposals not previously set out in the original Good Work Plan strategy document. The consultations cover:
The last of the consultations closes on 29 November 2019, but there is currently no time frame for when the government's response can be expected.
Improved enforcement measures
The Good Work Plan announced new measures, from April 2019, designed to improve enforcement, including a process for publishing the names of employers who fail to pay tribunal awards on time, and an increase (from £5000 to £20 000) to the financial penalties for employers who commit an ‘aggravated breach’ of employment rights.
What next
As the Government firms up its timetable for implementing the Good Work Plan and indicates the areas to which its focus will shift to next, now is a good time to identify which of the various measures will most impact on a business. By keeping an eye on the future, management will be in a good position to plan ahead and carry out any preparatory work to be able to meet any challenges that arise.