Below is our summary of the government’s proposals announced on 17th December 2018.  Note that as yet no legislation is available for view. This is likely to be published at some point during 2019.

  • Announced 17.12.2018 by Greg Clark MP – Secretary of State Business, Engery and Industrial Strategy (BEIS).
  • Follows Taylor review recommendations.
  • Commitment to improving quality of work as well as quantity – equal government focus
  • Commitment to address one sided flexibility – addressing that flexibility is a good thing, and increasing in the market, plus suits many individuals but minority of employers abuse the system and place too much risk on the individual , e.g. cancelling shifts at short notice, sending staff home when not needed = insecurity.
  • Commitment to improve worker rights as we leave the EU.
  • Recognises that the world of work is changing and different people have different priorities as regards quality.

The original documentation can be found here.

Proposals – the government will legislate to cover the points listed below, but as always the devil will be in the detail of the legislation. A quick summary is as follows.

  1. Right to request a more stable contract – this will be a right for all workers after 26 weeks, with set time frames for responses. Appears targeted at zero hours and reflects that some people like working this way so will not want to actually make these requests but if the reality is that if an individual works long term for an employer and wants greater security in future there will be a mechanism to request it. There is no suggestion that the employer will have to grant the request, and this seems similar to the existing right to request flexible working.
  1. Extend period of time required to break continuity of employment – increase the break between the end of a contract of employment and beginning of another to at least 4 weeks if continuity of employment is to be avoided – this again appears to be targeted at certain types of zero hours contracts and multiple short term hirings that break continuity (relevant to acquiring certain rights such as unfair dismissal).
  1. Ban Swedish derogation contracts – currently there is no detail about how this is to work given that existing workers engaged on Swedish derogation style contracts are often to be paid less that comparable workers on the client site, AWR comparators. It is expected that there will be some transitional arrangements, but ultimately new contracts are likely to have to be put in place. Hirers relying on these types of contract, and businesses supporting them will need to review policy. 
  1. Reduce threshold for employers to have to consult and inform – this applies where employers have an obligation to consult with the workforce, where for example at least 10% of employees wish to be informed about economic factors and employment related matters affecting the business. This is under the ICE Regulations which only applies to larger businesses. The proposal is to reduce the qualifying number of employees to 2% so long as there is a 15 employee minimum.
  1. Prevent deductions being made from ‘Tips’. Not likely to affect you but worth knowing that your tip to, e.g., a waiter should reach the intended recipient! 
  1. Right to a statement of rights on day 1 of an appointment – this appears to be to extend the right all current employees have to a statement of employment terms under S1 of the ERA to all workers and employees but to reduce the time to provide the statement from two months from the commencement of the employment to the start date. Also, over and above the current s.1 statement, which requires only limited information, the plan is that at the same time the employer must provide information relating to expected duration of employment, notice periods, sick pay eligibility, other forms of paid leave, probationary periods, all remuneration, specific days and times off work. 
  1. Specific information to be given to agency workers – all EBs will need to provide agency workers with a “Key facts page”, this will include
    1. Type of contract
    2. Minimum rate of pay they can expect
    3. If a worker is supplied through an intermediary, details of deductions or fees and an estimate of take home pay.

Guidance will accompany the legislation on this but the clear implication is that businesses will need to know much more about the intermediaries, e.g. umbrella providers, that they work with as well as other companies within the supply chain.  This will be of importance to recruitment businesses and hirers.

  1. Holiday pay – extend the reference period from 12 to 52 weeks – there will also be an awareness campaign to make sure that individuals area aware of their rights in this area, and a holiday pay calculator.
  1. Employment Tribunals – maintaining the enforcement assistance that is already provided, improve guidance on naming and shaming and increasing maximum  penalties for aggravated breaches  from £5k to £20k and legislation regarding repeated breaches by employers and place an obligation on employment judges to  consider the use of these sanctions.
  1. Aligning tax and employment status, to improve clarity re employment status – greater emphasis on control as Matthew Taylor recognised that all other elements can be present but substitution could ( if happening) defeat rights to status, over- emphasis of substitution to be addressed. This area will be of key importance to any business involved in temporary and/or contractor supply.
  1. Enforcement
    1. Extend state enforcement to cover underpayment of holiday pay
    2. New single labour market enforcement agency – currently EAS, GLAA, HSE and HMRC with director of labour market enforcement , David Metcalfe, providing strategy – proposals to be brought forward for a single labour market enforcement agency
    3. EAS remit to be extended to cover umbrella companies – focussing on pay and with the objective to “protect decent employers from unfair competition”. Details will be important.

The report also summarises the government’s response to 53 recommendations made by the Matthew Taylor review. Those worth noting, which are not addressed in the Good Work Plan itself, include:

  • The government will not be renaming workers as dependent contractors – ARC argued against the suggestion for this new category, the idea being unnecessary.
  • The Low Pay Commission to look into the impact of a higher minimum wage for those without guaranteed hours – see separate letter on website where they propose minimum notice of work schedules, rights to request a more stable contract, minimum compensation for  cancellation/curtailment and statements of particulars.
  • New duties on employers to report certain information on work structure, e.g. models of employment and agency services used – government has made some corporate governance reforms already.
  • The burden of proof in Employment Tribunal hearings, where status is in dispute, should be reversed so that the employer has to prove that the individual is not entitled to the relevant employment rights, not the other way round – this is interesting as ARC has recommended that the burden of proof in IR35 cases should be reversed, the principle of reversal therefore being established.
  • Naming and shaming scheme for non-payment of ET awards.
  • Accepts that NICs for self employed and employed should move over to parity but no plans to address.
  • Review of the apprenticeship levy and its application to agencies – this is something ARC has heavily pressed for.
  • Consultations to be published shortly on extending redundancy protection for new and expectant mothers.
  • Consultation on SSP next year also – looking at rights to return to the same job after long term sickness – a similar concept to the maternity right to return to work.

This report was prepared by Lawspeed for the Association of Recruitment Consultancies (ARC). For assistance on any point arising or any other recruitment and staffing sector issue please call Lawspeed on 01273 236236.

Copyright©Lawspeed 2018.