Possibly as a bit of a distraction from Brexit, the Government have announced a Good Work Plan which is designed to improve protection for agency workers, those on zero hours contracts and others with atypical working arrangements. The main headlines are that the Government plans to:
- Introduce a requirement for all employees and workers to be given a statement of their terms of employment on or before their first day of employment. The current requirement only applies to employees, not workers, and is for the statement of terms to be issued within 2 months of them starting their employment. The statement will also have to give details of pay for all periods of absence, including maternity and paternity pay. Currently the employer only has to give details of pay for holidays and periods of sickness. This new requirement will come into force on 6 April 2020.
- Increase the period required to break continuity of employment from one week to four weeks. In practice, one week is rarely enough to break continuity of employment anyway, but it will be interesting to see how the four week period works in practice.
- Increase the reference period for calculating variable pay from 12 to 52 weeks. This applies when calculating pay for employees whose pay varies from week to week. By increasing the reference period to 52 weeks it will iron out discrepancies caused by seasonal work or peaks or troughs in an employee’s pay. This is due to come into force on 6 April 2020.
- Quadruple the maximum fine which Employment Tribunals can impose on employers who have shown “malice, spite or gross oversight” in breaching employment rights from £5,000 to £20,000. Currently, this power is very rarely used, so it is unlikely to have much impact.
- Introduce a single enforcement body to ensure vulnerable workers are better protected. Currently, HMRC are responsible for enforcing the National Minimum Wage, and it may be that their responsibilities will be extended.
- Bring in new legislation to clarify the test of employment status, and to reduce the differences in the employment status tests for the purposes of employment law and taxation status. At the moment, occasionally an Employment Tribunal can find that someone is an employee despite HMRC being satisfied they are self employed, so some clarity in this area would reduce the understandable confusion.
- Remove the so called ‘Swedish Derogation’ from the Agency Workers regulations which allow some agency workers to be paid less than equivalent employed staff. This is also scheduled to come into force on 6 April 2020.
The detail for much of this has yet to be decided, and at present the Government has not committed to a timetable for some of these reforms.
The main change for most employers will be the requirement to give employees a statement of their conditions of employment from day 1 from April 2020, but this has always been best practice, so the additional requirement should not be too burdensome for organised employers.
We will of course update you on the detail as it comes through.
If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected]).