Posted Tuesday 28th January 2020
April 2020 will be a busy month for employers with a slew of HR related changes coming into force.
Drawing from guidelines outlined in the independent Taylor Review of Modern Working Practices, the Government’s ‘Good Work Plan’ – which comes into force in April of this year – looks to address shortcomings within current UK employment law and working practices.
The ‘Good Work Plan’ is seen by many as a necessary legislative measure to protect the rights of agency staff and those on short-term employment contracts, in this time of tremendous change among the UK workforce. However, it raises a number of key administrative changes which must be adhered to by UK employers.
In addition to significant tax changes, such as the introduction of a positive duty on private sector businesses to check IR35 applicability, new rules regarding ex gratia termination payments over £30,000, and brand new employment rights including the entitlement to parental bereavement pay, there are also a number of other changes on the back of the Plan.
The most notable change relates to written statements of terms, known as Section 1 Statements. A Section 1 Statement is a document given to an employee and essentially sets the terms of their employment. Pre-‘Good Work Plan’, this would cover only basic information such as the date employment commences, and the date(s) of any continuous period of employment. Under the proposed changes, however, the content of such statements will be extended to include a greater depth of information, such as the total number of working hours and days and details of all forms of paid leave entitlement.
Furthermore, while previously Section 1 Statements only had to be presented to employees in continuous employment for a period of one month or more, from the 6th April 2020, all workers – not just employees – will be entitled to this statement from their first day at work. However, there remains no need for this statement if all the same particulars are included in an employment contract from day one.
Agency workers will be entitled to a similar right, in that they must be provided with a ‘key information document’ before signing up to an agency. This document is the equivalent to a Section 1 Statement, complete with details of the contract type and the relevant parties, as well as a comprehensive overview of the pay structure and other entitlements. Legislators hope this change will better inform prospective agency staff before they commit to an agency.
After 26 weeks of service, intermittent workers on flexible contracts will have the right to request a more fixed working pattern. However, it’s likely some employers will terminate contracts just before the end of this period; thus the true implications of this change for such workers remains to be seen.
Currently, agency workers are able to opt-out of the right to be payed equally to their permanent counterparts, in exchange for payment in between assignments, albeit at a reduced rate.
The abolition of this so-called ‘Swedish Derogation rule’ ensures agency workers will receive a rate of pay equal to that of permanent employees, so long as they have worked a period of 12 weeks. The Taylor Report found that the Swedish Derogation rule was being consistently abused by agencies to reduce the size of their pay-bill. Agencies whose contracts contain opt-out provisions, must provide their workers with written confirmation that these provisions will no longer apply after 30 April 2020.
Further changes will see average weekly pay calculated under a 52-week reference period, rather than the current 12-week system, with any weeks not worked, or weeks where no pay has been received, being disregarded. Under this new system, workers will no-longer be penalised financially for taking holiday during less busy periods and workers who work intermittently will get a more realistic calculation of their earnings over time.
Another change, the details of which are still to be finalised, to further accommodate and protect intermittent workers, would be for continuous employment to only be broken after a gap of four weeks, replacing the current one-week gap requirement. This change may potentially apply more widely to all employees depending on the drafting of the legislation.
Finally, under the Information and Consultation Regulations 2004, employees of a business have the right to formally request a consultation with their employer. Typically, employees use this to force employers to discuss with them issues which may affect their job security. Generally, this leads to a greater level of transparency within an organisation.
As part the Good Work Plan, the proportion of employees needed to trigger such a consultation has decreased from 10% to 2% of the overall workforce, in theory, giving employees greater powers to hold their employers to account. What the new legislation fails to confront, however, is that a 15-employee minimum threshold will still be in place after its introduction, therefore withholding these powers from employees at smaller companies.
The Government views the Good Work Plan as a crucial piece of legislation which responds to a broad range of issues facing employers and their employees. The protection of workers’ rights continues to attract interest and protection but there are bound to be some difficulties ahead with their implementation.
This article is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action.
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