The Government has presented its Good Work Plan – a vision for the future of the UK labour market, putting improving the quality of work in the UK at its heart. This is the post-Consultations legislative proposal response to the Taylor Review on Modern Working Practices report, published in July 2017 and the government’s own Industrial Strategy published in November 2017.
Through a range of policy and legislative changes, the Government aims to achieve that:
- workers can access fair and decent work;
- employers and workers have the clarity they need to understand their employment relationships; and
- the enforcement system is fair and fit for purpose.
The then Prime Minister committed that we will not only maintain workers’ rights as the UK leaves the EU, but enhance them. The Good Work Plan aims to demonstrate how the Government will both continue to do this and strengthen workers’ rights. Matthew Taylor’s proposal for premium rate pay for those without guaranteed hours worked was not supported by the Low Pay Commission. The Government is instead taking action to introduce a right to request a more stable contract, as well as consulting on the Low Pay Commission’s other proposals.
Fair and decent work
The Government will legislate to give all workers the right to request a more predictable and stable contract. This will be a right available to both employees and workers after 26 weeks of service. It will cover, for example, greater certainty around the number of hours a person receives or the fixed days on which they will be asked to work.
Breaks in continuity of service can defeat the accrual of employment rights. Some may struggle to build up continuous service as they may take short gaps between contracts, so the Government will legislate to extend any break to four weeks before it breaks continuity, to allow more employees to access enhanced employment rights.
Protecting agency workers
The Swedish derogation is a mechanism by which agency workers exchange their right to be paid equally compared to their permanent counterparts in return for a contract guaranteeing pay between assignments. This was originally designed to reassure workers that they would continue to earn during periods when there were gaps in work, but this has not properly achieved its aim. The Government will legislate to repeal this provision and to ban the use of this type of contract. It will guarantee all long-term agency workers wages equal to those of comparable permanent workers.
Quality of work
The Industrial Strategy, which forms the second pillar of the Government response issued today, indicated that the Government wanted to address quality of work, not just quantity. The Government considers that reviews such as the Carnegie UK Trust and the Royal Society of Arts report in September 2018 have made a valuable contribution. The Government has established the independent Industrial Strategy Council to develop measures of success for the Industrial Strategy. This Council’s metrics are focussed on satisfaction; fair pay; participation and progression; wellbeing; safety and security; and voice and autonomy in looking at and assessing quality of work.
The Government has set out the Low Pay Commission’s remit for the years beyond 2020. In the hospitality sector, the Government will take action to legislate to ban employers from making deductions from staff tips and that legislation will offer a financial benefit to workers who will receive the tips they earn.
Voice and autonomy
The Taylor Review had recommended that, for work to be fair and decent, workers must have a voice. He highlighted the contribution that high levels of employee engagement had on organisational performance and productivity. He considered the (currently, rarely used) Information and Consultation Regulations were a useful vehicle for this and the Government has agreed. The Government will therefore legislate to lower the threshold required for a request to set up information and consultation arrangements from 10 per cent to 2 per cent of employees, with 15 employees remaining the minimum threshold for initiation of this process. The Government will complement this by working with key stakeholders to promote the development of better employee engagement with a particular focus on sectors with high levels of casual employment and smaller firms.
Following the coming into force of the Companies (Miscellaneous Reporting) Regulations 2018 from 1 January 2019, the Government will be monitoring the impact on corporate governance of the new requirements. This includes a post-implementation review assessing current reporting requirements.
The Government agrees it should do more to help both individuals and businesses understand their rights and tax obligations and will legislate to improve the clarity of the employment status test, as well as improving the guidance and online tools available. It has again confirmed it will bring forward detailed proposals on how to align the employment status frameworks for the purposes of both employment rights and employment tax to ensure the differences are reduced to an absolute minimum. Independent research has been commissioned to find out more about those with uncertain employment status in order to help the Government to understand how best to support them when bringing forward the legislation.
Clarity for employers and workers
In terms of clarity as to rights, whilst employees are entitled to particulars of employment covering rights such as wages, place of work and holiday rights, these have never applied to workers. The Government plans to legislate to extend both the scope of and personnel entitled to this information. It plans to make a written statement a day one right for both employees and workers and to expand it to cover:
- how long a job is expected to last or the end date of a fixed term contract;
- how much notice an employer or worker is required to give to terminate the agreement;
- details of eligibility to sick leave and to sick pay;
- details of other types of paid leave such as maternity and paternity leave;
- all remuneration (not only pay); and
- which specific days and times the workers are required to work.
Key Facts for agency workers
Further it plans to legislate to require all employment businesses to provide every agency worker with a Key Facts Page to include:
- the type of contract;
- the minimum pay rate;
- whether they are paid through an intermediary company;
- any deductions or fees that will be taken; and
- an estimate or example of the impact of this on their take home pay.
This will be the responsibility of the employment business and the Employment Agency Standards Inspectorate will have powers to enforce where a Key Facts Page is not given.
With regards to holiday pay, the Taylor Review highlighted ignorance of rights as a barrier to payment of holiday pay. The Government plans an awareness campaign to ensure all workers benefit from their paid leave entitlement. It also intends to introduce an updated and improved holiday leave calculator and may look at the option of a new holiday pay calculator.
There are proposals for a new single labour market enforcement agency to better ensure that ‘vulnerable workers’ are more aware of their rights and have easier access to them and that businesses are supported to comply. The indication is also being given that the Government is looking to reform statutory sick pay and considering whether changes are required to its enforcement mechanism.
As well as strengthening the Tribunal system generally, the Government aims to improve the enforcement of awards through its naming and shaming non-payers via BEIS as for National Minimum Wage. Other enforcement steps include raising the maximum limit of an aggravated breach penalty awarded by employment tribunals for employers who repeatedly breach obligations from £5,000 to £20,000. This would appear useful in the gig economy area where individual cases have been won, but not followed by the gig economy employers for the remainder of the workforce. Employment Judges will have an obligation to consider the use of these sanctions. The particular focus of these aggravated breach orders will be on the time between breaches, types of breaches and how repeated breaches are demonstrated.
The Government also intends, in terms of the umbrella companies, to introduce legislation to expand the remit of the Employment Agency Standards Inspectorate to cover umbrella companies. This will empower it to investigate complaints and take enforcement action, with particular focus on situations where agency workers have not received adequate pay.
There is an indication that the burden of proof in employment tribunal hearings will be further reviewed after an online tool for employment status has been developed.