The Good Work Plan: What do Employers need to know?
What is ‘The Good Work Plan’?
The Good Work plan is a Government strategy set to reform employment law, with focus on the following key themes:
- Fair and decent work;
- Clarity for employers and workers; and
- Fairer enforcement.
There are many important changes employers should watch out for.
What will change?
1.Naming and shaming of employers who fail to pay tribunal awards.
A new, ‘name and shame’ scheme has been introduced, naming those Employers that have failed to pay Employment Tribunal awards within a reasonable time. This bulletin will be published on the Government’s website quarterly and accessible to the public. This scheme is currently in place for Employment Tribunal awards on or after the 18 December 2019.
2. Increased penalties for aggravated employment law breach.
On 6 April 2019, the maximum penalty for aggravated breaches of employment law rose from £5,000 to an eye-watering £20,000. Aggravated damages are awarded in cases where an employer has breached an employment law and that breach has, “one or more aggravating features”. This may be the case where the employer has a dedicated Human Resources team (yet the breach still occurred), or the breach was particularly malicious or deliberate.
3. Ban on deductions from staff tips.
According to ‘OpenTable’ over 87% of consumers tip their server in the UK. You may wonder where these tips go? Some employers deduct administration fees and adopt systems for managing tips such as TRONC schemes.
The Government plan to legislate to prohibit or limit this practice. Further plans may see businesses being told to remove any suggestion of a recommended tip and ensuring clear details are given as to the discretionary nature of a tip.
4. Easier for casual staff to establish continuity of employment.
Some employment rights are difficult for casual staff to establish, such as the right to claim unfair dismissal which requires two years’ service. A break of one complete week’s service ending on a Saturday, can sever continuous employment. However, the Government plans to change this to four weeks.
*Please note, there are exceptions to this rule, such as temporary cessations of work or illness.
5. A workers right to request a more stable and predictable contract
With a growing number of employers using atypical contracts (think zero hours), the Government plans to legislate to introduce the right for workers to request a more stable and predictable contract after 26 weeks of employment.
These requests would be dealt with similarly to a flexible working request, with the employer having three months to respond.
6. Agency workers: abolition of Swedish Derogation.
The Swedish Derogation, which allows businesses to avoid giving pay parity after 12 weeks of continuous employment, is set to be repealed 6 April 2020. This means that all agency workers, after 12 weeks continuous employment, will be entitled to, “the same basic working and employment conditions” as if they had been recruited directly by the business and employers will not be able to pay a minimum between assignments in order to avoid this.
7. Employment Status
In employment law, it is crucial that you have correctly ascertained whether your staff are engaged as employees, workers or self-employed. This can be difficult as there is no clear definition which to rely upon; a Tribunal will consider a series of tests to determine status.
However, the Government is committed to legislating to improve the employment tests and to bring greater clarity to the law on employment status. It is anticipated that an online tool will be developed to determine employment status.
8. Written terms for all workers
On 6 April 2020, the Government will legislate to ensure all workers have the right to a written statement of terms, not just employees. This right will commence from day one of employment, as opposed to allowing employers two months to provide these terms, as is the current position.
Those workers who start work on or after 6 April 2020 will be able to bring a claim against their employer for failure to provide a statement. A failure to provide a written statement of terms, in certain circumstances, runs a risk of an Employment Tribunal ordering compensation of up to four weeks pay.
9. Holiday pay
The Government is set to campaign to raise awareness of the rights to holiday and holiday pay, with examples to understand how holiday pay works. The Government also plan to increase the reference period for working out an average week’s pay from 12 to 52 weeks. Those who engage staff under irregular working patterns may be familiar with the 12-week reference period, which will change to 52 weeks from 6 April 2020.
As further consultations are undertaken and the Government legislates, we will keep you up to date with any changes your business needs to be aware of, but please ensure that you take advice on any practical staffing issues you may face.