Employment Law Update: ‘The Good Work Plan’

Primary interest
Legal issues

This article gives an overview of the government’s Good Work Plan, identifying the key areas that are likely to change in employment law and actions that organisations could be taking to get ready for these changes.

What is the Good Work Plan?

At the end of last year, the Government published it’s Good Work Plan, which sets out its vision for the future of the UK labour market. The plan was published as a response to the Taylor Review of Modern Working Practice. The plan focuses on the following themes for reform of working practices:

  1. Providing fair and decent work;
  2. Providing more clarity for workers and employees;
  3. Providing fairer enforcement.
Who will it affect?

As the vision for reform to working practices is quite broad, it will affect most organisations and people working within them or for them, including employees, workers, agency workers, those on fixed-term contracts, and those who you may believe are self-employed but who may be termed ‘workers’ or ’employees’ under the revised employment test.

What are the key areas that will change and what actions should we take to prepare?
Employment Status

Currently there is a different test of whether someone is ’employed’ for tax purposes and employment law purposes, which is quite confusing. The government intends to refine this so that the two tests are more similar. This will include a new ’employment status online checker’. This will be of significance to those organisations using ‘self-employed contractors’.

Action: make a list of those who you believe are self-employed and take advice on whether they should be considered ‘workers’. 

Rights for workers to request a predictable and stable contract

Those on zero hours contracts will have the right to request a more fixed working pattern, which they will be able to exercise after 26 weeks of service.

Action: make a list of those staff on a zero hours contract and their length of service. Take advice on whether they should be offered contracts with more regular hours, in the form of either a fixed term or permanent contract. 

Written terms of employment

Employers currently have a legal duty to give written terms of employment to all employees within 1 month of them commencing employment. Two changes are expected. Firstly, this will now be extended to workers as well as employees. Secondly, the period will reduce so that it will be required to be given on the first day of their employment or service.

Action: Check that all employees have written terms of employment and make a list of any workers who will need these too. Check this guidance from ACAS for what is required to be given as written terms of employment.

Continuous employment

Continuous employment is when an employee has worked for one employer for a period without a break. This is important as it gives rise to certain employment rights such as redundancy or maternity rights. Currently the ‘break’ is 1 week. This will be extended to 4 weeks.

Action: Check your contracts and personnel details, especially details for casual staff and make a note of when they started working for you and what periods of break in service they have had so you can easily see who has accumulated continuous service. 

Ban on deductions from staff tips

The proposal is that employers will no longer be permitted to deduct administration costs from staff tips.

Action: If you presently make these deductions, review your budget and how else you may be able to cover administration costs.

Holiday Pay

The reference period for holiday pay is likely to be extended from the current 12 week period to a 52 week period. This is likely to impact employers who employ seasonal staff, who are likely to therefore accrue more holidays under the extended reference period.

Action: Identify any seasonal or term-time workers and calculate what their holiday entitlement is likely to be under this increased reference period so you can budget for this additional cost.

The Swedish Derogation will be removed (Agency Workers)

This will mean that employers will no longer be able rely on a legal loophole, which currently allows them to pay agency workers less.

Action: Check whether you are currently employing agency workers and whether it is equal pay to your full-time staff. If not, calculate what the increase will be and budget for this.

Fairer enforcement – Employment tribunals

If there is an aggravated breach of employment law, the new legislation will allow the employment tribunal to fine an employer up to £20,000 (currently £5,000 for aggravated breaches).

Action: Review and update your employment practices. You can do this through RVA Safe and Sound. 

Further information

The government has not yet confirmed when the changes are likely to be implemented, but it is expected that this may be from April 2020.  RVA will continue to keep you updated as information is released. You can also access the government site here.

If you would like advice on contracts or employment practices within your organisation, you can contact Herjeet Randhawa, RVA Advice Worker on 0118 9372 273 or herjeet.randhawa@rva.org.uk. You can also find more information about the RVA Advice Service here.