The Matthew Taylor Review delved into modern working practices, with a particular focus on the so-called ‘gig economy’. We outline the 9 key implications of the Good Work Plan for employers.
The gig economy is not without its supporters however, with some arguing that the flexibility of this form of employment being an ideal arrangement for some workers and businesses.
In response to the Taylor Review, the government published the Good Work Plan in December 2018 outlining a series of proposed changes to employment law with the aim to improve workers’ rights. Business Secretary Greg Clarke said, “Focusing on issues like employee engagement, fairness and inclusion boosts productivity as well as being the right thing to do.”
So how exactly will this new legislation affect employers if successfully implemented? We give what we think are the key takeaways from the Good Work Plan for businesses.
- Employees and workers entitled to a statement of particulars at appointment
Currently workers are entitled to the key terms of their contract in writing within the first 2 months of work. The Good Work Plan proposes new legislation that will entitle workers to this document on the first day of their job, which must include information such as start and end dates, holiday and sick pay allowance and working hours.
The Good Work Plan also calls for improvements in the clarity of employment status tests, however there is little information on how this will be implemented
- Removal of the Swedish Derogation
This legal loophole has allowed for employers to pay agency workers less than permanent employees in equivalent roles. The Good Work Plan will ban this form of contract protecting agency workers from being unfairly paid.
- Increase in breaks that count as continuous service
The Taylor Review highlighted an issue whereby employees worked intermittently for the same employer leading to them running into difficulties with gaining access to employee rights. The Good Work Plan introduces an extension to the time required to break a continuous service from one week to four weeks.
- Right to request a more stable contract
In an effort to deal with the issue of one-sided flexibility, workers will be given the right to request more predictable hours and a more stable contract after 26 weeks of service.
- Holiday pay must be calculated based on 52 weeks rather than 12 weeks
The reference period for calculating holiday pay will be increased in order to reflect the irregular nature of many casual contracts.
This change aims to encourage workers to spread their holiday throughout the year, rather than take a large chunk after peak periods such as Christmas when they may have worked overtime. This ties in with the 2016 confirmation that commission should be included in calculations for holiday pay.
- Ban on employers making deductions from staff tips
Although most establishments act fairly when passing on tips to their workers, The Good Work Plan will introduce legislation that bans employers from deducting staff tips for reasons such as “administrative fees”.
- Introduction of a single labour enforcement agency and increased state enforcement on behalf of vulnerable workers
The Good Work Plan mentions plans for a single labour enforcement agency to be introduced, which would provide support to ensure businesses understand and comply with the law and vulnerable workers are aware of their rights.
The government introduced an extension to state enforcement on behalf of vulnerable workers for underpayment of holiday pay in 2018. The Good Work Plan builds on this, proposing further extensions for agency workers who have had their pay withheld of unfairly deducted by an umbrella company.
- Increase in potential fines imposed by employment tribunals
From April 2019, employers found to have shown malice, spite or gross oversight in breaching employment rights can now be fined up to £20,000 rather than the current maximum of £5,000.
Alongside this there will be a “naming and shaming” scheme whereby companies that have failed to pay tribunal awards can be announced publicly to help claimants enforce payment.
- Zero Hour Contracts
Although zero-hour contracts have not been banned under new legislation, some of the newly introduced worker rights may force employers to re-evaluate the way they manage workers on such contracts.
You can read the full report here.
Our Take
The plan has received a great deal of commentary, with some claiming it to be ground-breaking, whilst others arguing that the proposed changes are not enough to shift the balance of power in the gig economy.
Although a date for any implementation of these reforms has yet to be confirmed, it is advisable for employers to start thinking about how it may impact on them. Planning for some of the legislative changes will assist employers and HR teams in being ready to put new policies in place when the time comes.
We’d love to hear your thoughts – If you have any questions or comments, please get in touch via Twitter, Facebook or email us at info@79.170.44.118.