Following the Taylor 2017 Review and the subsequent consultations launched earlier this year, the government has now published the Good Work Plan (the Plan). The Plan sets out its proposals for implementing the recommendations of the Taylor Review and “a wide range of policy and legislative changes” dealing with worker status, agency workers and zero hours contracts.
The intention of the government is to ensure that all workers have access to “fair” and “decent” work, that there is clarity in understanding the working relationship between workers and employers and that the enforcement system is “fit for purpose”.
It is important to note that the Plan does not provide any draft legislation and it does not set out any timescales for implementation of its proposals.
The main changes proposed by the government are as follows:
- Abolish the “Swedish derogation”, which allows hirers/end users to pay agency workers less than their directly recruited employees if the agency workers are paid between assignments by the agency.
- Empower the Employment Agency Standards Inspectorate to monitor the role of the umbrella companies and to ensure that agency workers are receiving adequate pay without inappropriate deductions being made.
- Introduce a new single labour market enforcement agency to support workers and advise them of their rights.
- Clarify the employment status test and align the employment status frameworks for employment and tax purposes in order to reduce any differences between the two systems.
- Introduce a right to request a more predictable and stable working pattern after 26 weeks of service.
- Introduce new guidance on interpreting holiday pay rules and extend the holiday pay reference period for workers with irregular hours from 12 weeks to 52 weeks.
- Introduce the right to a written statement of key terms for all workers (not just employees) and to require this from day one. The mandatory content of the statement would include, in particular, details of all remuneration (not just pay) such as contributions in cash or kind.
- Extend the time required to break a period of continuous service between contracts from one clear week to four clear weeks.
- Prohibit deductions from staff tips.
- Lower the threshold required for a request to set up information and consultation arrangements from 10 per cent to 2 per cent.
- Increase the maximum penalty which an Employment Tribunal can impose for some breaches of employment rights from £5,000 to £20,000.
It is not clear how and when the above changes will be implemented or even how the employee/worker/contractor test could really be clarified in a workable manner. The Plan acknowledges that the government’s proposals are ambitious and will have wide-ranging consequences for the UK labour market and its future development.
