21 December 2018

In July 2017, Matthew Taylor published the independent Taylor Review of Modern Working Practices, which looked into issues such as:-

• The implications of new forms of work
• The rise of digital platforms
• Impacts of new working models.

The Taylor Review made 53 recommendations to government. The government published its response, accepting the vast majority of those recommendations. The government also launched four consultations seeking stakeholder views on the following:-

• Employee status
• Agency worker recommendations
• Increasing transparency in the labour market
• Enforcement of employment rights recommendations.

The Good Work Plan, which was published on 17 December 2018, draws on the feedback from these consultations. It sets out the action that the government plans to take to implement the recommendations arising from the Taylor Review. This includes:-

Employment Status

• Bring forward detailed proposals on how the two frameworks for determining employment status (for the purposes of employment rights and tax) can be aligned;
• Improving the clarity of the employment status tests, reflecting the reality of modern working relationships;
• Provide improved guidance and online tools to help people understand their status;
• Legislate so that businesses cannot misclassify or mislead staff regarding their status

Zero-hour contracts

• Legislate to give all workers the right to request a more predictable and stable contract.

Agency workers

• Ban the use of pay-between-assignment contracts which allow businesses an opt-out from equal pay arrangements between agency workers and their permanent workers (known as the Swedish derogation) from 6 April 2020. The aim of this is to guarantee equal wages with those of comparable permanent workers.
• Require that specific information is given to agency workers to help them make informed choices about the work they accept.
• Require that employment businesses provide every agency worker with a Key Facts Page, setting out the type of contract the worker is employed under, the minimum rate of pay that they can expect, how they are to be paid, if they are paid through an intermediary company, any deductions or fees that will be taken, and an estimate or an example of what this means for their take home pay.

Continuity of service

• Extend the time required to break a period of continuous service (from one to four weeks) to make it easier for more employees to access employment rights.

Written statements

• Extend the right to receive a written statement to all workers of their rights on appointment, as well as employees. This will become a day one right for both employees and workers.

Holiday pay

• Launching an awareness campaign, targeted at both individuals and employers, to boost awareness and understanding to help ensure all workers are benefitting from their paid entitlement to leave.
• Introduce new guidance and updated/ improved holiday pay entitlement calculator.
• Increasing the reference period for calculating a week’s pay for holiday pay purposes, from 12 weeks to 52 weeks.

Tips 

• Legislate to ban employers from making deductions from staff tips.

Information and consultation

• Reduce the thresholds of support for information and consultation rights from 10% to 2% so more people can benefit from them. The 15 employee minimum threshold for initiation of proceedings will remain in place. This will come into force on 6 April 2020.

Enforcement

• Increase state enforcement protections for agency workers where they have pay withheld or unclear deductions made by an umbrella company.
• Legislate to increase the maximum level of penalty that Employment Tribunals can impose in instances of aggravated breach to £20,000 from £5,000.
• Legislate to create an obligation on Employment Tribunals to consider the use of sanctions where employers have lost a previous case on broadly comparable facts.
• Bring forward proposals in 2019 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.

While these changes will not come into force immediately, it is clear that the employment landscape will be changing. Therefore, employers should start considering the impact these reforms may have on their organisations.

For more information, please contact your usual BTO contact.

Contact: Lesley Grant Associate ljg@bto.co.uk T. 0141 221 8012