Fundamental shake-up of employment rights to be introduced

Fundamental shake-up of employment rights to be introduced

News - 09 January 2019

Greg Clarke ,The Secretary of State for Business, Energy and Industrial Strategy, on 17th December 2018 delivered a statement to Parliament over a set of measures to change and reform employment rights under the “good work plan” (the plan) which sets out the Government’s future vision for the UK labour market based upon the Matthew Taylor review of modern working practices that was commissioned by the Prime Minister of which 51 of the 53 recommendations made by Mr M Taylor are to be implemented and amounts to the biggest shake-up of workplace rules in 20 years.

Matthew Fell, CBI Chief UK Policy Director has commented that “Work that’s flexible and fair is essential to the success of the UK’s labour market... companies support the Good Work agenda because there is a strong business case for it. Focusing on issues like employee engagement, fairness and inclusion boost productivity as well as being the right thing to do”.

At this present time, there is no timetable for most of the changes and no legislation is included in the plan, but in readiness for its implementation into UK law, we highlight the key proposals as below: -

CONTINUITY OF SERVICE

It is proposed that the current rule on continuity of employment will be changed so that a break of up to four weeks (rather than a week) between contracts will preserve continuity.

AGENCY WORKERS SWEDISH DEROGATION

Agency workers can currently exchange their right to be paid equally to permanent counterparts if they enter into a contract guaranteeing pay between assignments (the so-called Swedish derogation). Legislation is to be brought forward to repeal it and ban the use of contracts which withhold agency workers’ equal pay rights.

AGENCY WORKERS

Businesses will have to provide agency workers with a ‘Key facts page’ setting out the type of contract they are engaged under, how much they will be paid and how, and an estimate of take home pay.

WRITTEN STATEMENTS

The Government is going to legislate to extend the right to a written statement to all workers, as well as employees, as from day one of commencement of employment with more information to be provided than is currently required, including details of all types of paid leave (e.g. maternity and paternity leave), which specific days and times workers are required to work and the duration and conditions of any probationary period.

HOLIDAY PAY

considering difficulties experienced by workers whose hours could vary from week to week and be in temporary or seasonal employment contracts, legislation is to be introduced to extend the holiday pay reference period from 12 to 52 weeks.

TIPS

A ban is to be introduced on employers making deductions from staff tips and it is likely that the existing unlawful deduction from wages legislation would be extended to implement this provision.

ENFORCEMENT

Employment Agency Standards Inspectorate will be provided with new powers to allow investigations into umbrella companies (particularly where it is suspected that agency workers have received inadequate pay) together with state enforcement of workers’ holiday pay rights with payment of arrears and backed up by financial penalties (similar to the enforcement of the national minimum wage). Also, the aggravated breach penalty will be increased from £5,000 to £20,000 that arises where an employer has repeatedly breached their obligations.

EMPLOYMENT STATUS

There is no proposals for legislative changes to the tests for employment status, but the plan highlights that legislation will be forthcoming to ‘improve clarity on employment status’ with an on -line tool to be implemented to aid employers and employees on the matter but there is no timetable set for this. Also, the Plan highlights that the Government will not introduce a new concept of ‘dependent contractor’. This term had been proposed by Matthew Taylor as a term applicable to workers who were not employees.

THE INFORMATION AND CONSULTATION OF EMPLOYEES REGULATIONS 2004

These regulations give employees in businesses with 50 or more employees the right to request that their employer sets up arrangements to inform and consult them about issues in the organisation. Currently a request can only be made if 10% of employees support the request. This threshold will be reduced to 2% of employees.

RIGHT TO REQUEST A DIRECT CONTRACT OF EMPLOYMENT FOR AGENCY WORKERS

Where agency worker has been placed with the same hirer for 12 months then provisions to be introduced for the hirer to consider the worker’s request for a direct contract of employment with the hirer in a reasonable manner.

NAMING AND SHAMING SCHEME

To be introduced for those employers who do not pay Employment Tribunal awards within a reasonable time.

Sourced from Quest BALI's HR & HS membership benefit service. 

Return to news listings