In the news this month: Special Edition   

The Good Work Plan – proposed extensive employment law reforms following the Taylor Review, and what else to expect in 2019

The Good Work Plan

On 17 December 2018, the Good Work Plan was published, being the government’s response to the Taylor Review of Employment Practice from February. This is described by the government as the “biggest package of workplace reforms for over 20 years”.

The approach to these reforms is based on three main themes:

  1. Fair and Decent Work.
  2. Clarity for Employers and for Workers.
  3. Fairer Enforcement.

The main changes proposed are:

  • A right for workers to request a more stable and predictable contract.
  • Easier for casual staff to establish continuity of employment.
  • Agency workers: abolition of Swedish Derogation and the Employment Agency Standard Inspectorate (EASI) to investigate umbrella companies.
  • Ban on deductions from staff tips.
  • Lower thresholds for requesting information and consultation arrangements.
  • Employment status tests to be refined after further research and online employment status tool to be developed.
  • Improved written statement of terms for all workers, from day one.
  • “key facts” statement to be given to agency workers.
  • Reference period for holiday pay to be 52 weeks rather than 12 weeks.
  • State-led enforcement of holiday pay for vulnerable workers.
  • Reform of statutory sick pay.
  • New single, state, enforcement agency for employment rights.
  • Naming of employers who fail to pay tribunal awards.
  • Increased penalty for aggravated employment law breach.

The Good Work Plan: the First Steps

A number of the proposals under the government’s Good Work Plan, published on 17 December 2018, are already on the books in the form of draft legislation with intended dates to take effect.    I therefore consider these aspects in more detail below:

  1. Continuity of Employment
    Casual employees find it difficult to accrue certain employment rights such as the right to protection from unfair dismissal or to shared parental leave because a gap of more than one week in employment in many cases will break continuity.  The government proposes to increase the gap which would break continuity to four weeks. This is expected to be implemented in April 2020.
  2. Information and Consultation thresholds
    The government wishes to encourage higher levels of employee engagement to make the workplace more fulfilling and thereby also improve organisational performance and productivity.  Draft regulations have been published to come into force in April 2020 to lower the number of employees required to make a request for formal Information and Consultation arrangement to be set up from 10% of employees to 2% of employees, although still subject to a minimum number of 15 employees.
  3. Written Statement of Terms
    There are also draft regulations in place to require that all workers, and not just employees, have the right to a written statement of terms and conditions, and that this must be given on or before day 1 of their work, a change from the current requirement that this is given within 2 months of commencement of work.  This is also expected to take effect in April 2020.
  4. Holiday Pay
    Regulations are before parliament to increase the holiday reference period, to determine an average week’s pay for holiday pay, from 12 weeks to 52 weeks.  This ensures workers and casual employees who do not have regular working patterns and who are required to take holiday in quiet times of year when their weekly pay maybe lower are not disadvantaged.
  5. Naming Non-Paying Respondents/Employers
    From 18 December 2018, the government can publish the names of employers who do not pay Employment Tribunal awards, on completion by the employees/workers/claimants of a revised penalty enforcement form.

Changes to Expect in 2019

Increased financial penalties for employers
The draft Employment Rights (Miscellaneous Amendments) Regulations 2019, which are due to come into force on 6 April 2019, will quadruple the maximum penalty for an aggravated breach of employment law from £5,000 to £20,000. These regulations also include a number of the other reforms referred to above, expected to come into force in April 2020.
CEO pay limits
The Companies (Miscellaneous Reporting) Regulations 2018 come into force on 1 January. These regulations bring in mandatory reporting of the ratio between CEO pay and average staff pay for companies with 250 or more employees, and a package of other corporate governance changes, all of which will be effective for accounting periods beginning on or after 1 January 2019 (and so the first pay ratio reports will be published in 2020).
Itemised Payslips 
The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) (No.2) Order 2018 is due to come into force on 6 April 2019. The legislation introduces a right for all workers to be provided with an itemised pay statement and the ability to enforce this right at an employment tribunal. The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order 2018 is set to come into force on the same day and will require itemised payslips to contain the number of hours paid for where a worker is paid hourly.