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The Good Work Plan
The Government has published its “Good Work Plan” which sets out employment law reforms on the horizon. This follows Matthew Taylor’s review of Modern Working Practices and his report published in July 2017.
The following changes will take effect from April 2020:
- The right to a basic written contract will be a requirement from day 1 of employment, for workers as well as employees. This replaces the current requirement, for employees only, to issue a contract within the first 2 months of employment. The basic contract will also need to include matters such as probationary periods and family leave, which do not currently form part of the minimum terms.
- The period for calculating an average week's pay will increase from 12 weeks to 52 weeks. This is a much fairer approach. It predominantly seeks to protect workers without normal working hours such as seasonal workers. It ensures that the calculation of their holiday pay reflects their working time over the course of the year rather than limiting it to the previous 12 weeks which may result in lower holiday pay – where they take holiday following a quieter period, for example.
- All agency workers will have the right to receive the same pay and basic employment terms (with comparable employees) after 12 weeks, even those employed directly by employment agencies. Currently, employment agencies can avoid equal pay requirements where there is an overarching contract providing pay between assignments (the so-called “Swedish Derogation” in the Agency Workers Regulations 2010
There are further proposals, with no timescale for implementation yet, which include:
- The right for zero-hour contract workers to request a more stable contract after 6 months engagement - for example, fixed working days or a minimum number of hours a week. This right may be subject to similar rules relating to flexible working requests where employees have the right to make a request, but there is no obligation on the employer to accept it, subject to fair consideration and good business rationale.
- The introduction of legislation to “improve the clarity of the employment status tests” so it is clearer whether individuals are employees, workers or self-employed. Currently, we rely on a number of tests established by the employment tribunals via case law. Recent cases which have hit the headlines include cases brought against Pimlico Plumbers and Uber. Any forthcoming legislation could be significant although, as acknowledged in the Plan, defining employment status and ensuring legislation is fit for purpose in an ever-changing gig economy is challenging.
- An increase in the period which can break continuity of employment from 1 week to 4 weeks, to make it easier for casual staff to acquire certain employment rights. In our current system, employment rights are earned over time and individuals who work intermittently for the same employer lose out. This change seeks to protect those workers whilst also adapting to modern working practices.
- Banning companies from exploiting their staff by making deductions from tips, where they form a significant part of staff income – particularly in the hospitality sector. The Plan acknowledges that more needs to be done to ensure that workers receive all tips customers leave for them.
It is important that employers take appropriate steps to prepare for changes due in April next year, and to keep an eye on any future implementation dates for the further proposals put forward by the government.
If you would like to discuss the matters in this blog with our Employment Team, please get in touch with Jennifer Mansoor.
Please note the contents of this blog are given for information only and must not be relied upon. Legal advice should always be sought in relation to specific circumstances.