Proposals for workplace reforms

A farewell to the Swedish derogation, enhanced rights to written particulars of employment, and a right for casual workers to request a fixed working pattern are some of the changes to workplace rights proposed by the government.

In 2016 Matthew Taylor was asked to taker a wide-ranging look at working practices in the UK. He came up with a set of 53 recommendations. The government’s initial response indicated that it would pursue most of the report’s recommendations. What we have now is a firming up of what the government plans to do. The Good Work Plan expresses an intention to legislate, but with no timetable for doing so. Contrary to some media reports, there will be no immediate changes. The government, perhaps a tad optimistically, calls it the ‘largest upgrade in a generation to workplace rights’. Nevertheless, there are some significant changes proposed and these and others are summarised below:

  • Written statements: the statutory right to a written statement of employment particulars will be extended to all workers (i.e. not just ‘employees’) from Day 1 of employment. It will need to set out enhanced information such as the expected duration of work, notice period, eligibility for leave (e.g. for sickness and maternity and pay during these periods), all remuneration (including vouchers, etc) and working hours/ days. The scheduled start date for this is 6 April 2020. (The right of all workers to receive a payslip, which was one of the Taylor Report’s recommendations, will take effect from April 2019.)
  • Continuity of employment: the statutory rules on calculating continuity of employment will be changed so that a break of up to 4 weeks (it’s currently 1 week) between assignments will not break continuity of employment This will make it easier for those on atypical working involving non-consecutive assignments to establish continuity of service to qualify for certain employment rights.
  • Employment status: legislation will be introduced to improve the clarity of the current status tests, potentially placing more emphasis on control and less on the right to substitution. The current framework of tax and employment law will be better aligned so as to reduce differences to a minimum. This area is fraught with difficulty and it’s likely that much more research/discussion will ensue before we see any workable proposals.
  • Zero-hours contracts: these will not be banned but rather legislation will be introduced to allow all employees and workers with varying hours to request, after 26 weeks in post, a more fixed working pattern. There are no details as yet but presumably this will be modelled on the existing right to request flexible working.
  • Agency workers: 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). The Agency Workers Regulations 2010 will be amended, from 6 April 2020, to repeal the Swedish derogation and ban the use of contracts which withhold agency workers’ equal pay rights. In addition, all employment businesses will be required to provide agency workers with Key Facts including who is responsible for their employment, any element of pay from an intermediary, any fee and relevant benefits.
  • Tribunal awards: the maximum fine that can be imposed on employers in instances of an aggravated breach will be quadrupled from £5,000 to £20,000 (from 6 April 2019). Those employers who don’t pay tribunal award are also to be ‘named and shamed’, similarly to those who don’t pay the NMW (see here for details).
  • Holiday pay: for workers with non-standard hours, the pay reference period over which holiday is calculated will increase from 12 weeks to 52 weeks (where a worker has been employed by their employer for at least 52 weeks; if less than 52 weeks, the reference period is the number of weeks for which the worker has been employed). The scheduled start date for this is 6 April 2020. HMRC will be given the power to enforce statutory holiday pay as is already the case for the NMW. A new guidance and an awareness campaign will be launched.
  • Tips: employers will be banned from making deductions from staff tips.
  • Information and consultation: the threshold required for a request to set Information and Consultation arrangements will be lowered – from 10% to 2% of employees (the 15-employee minimum threshold will however remain). The scheduled start date for this is 6 April 2020.
  • Enforcement: to make the system for enforcing employment rights clearer, fairer and more efficient a new single labour market enforcement agency is to be set up (possibly in early 2019) to better protect vulnerable workers. New powers will be created to allow investigations by the Employment Agency Standards Inspectorate into umbrella companies (particularly where it is suspected that agency workers have received inadequate pay).