On 17 December 2018 – following Matthew Taylor’s review of modern working practices- the Government announced the ‘Good Work Plan’ calling it the ‘largest upgrade in a generation to workplace rights’. Contributor Jane Crosby, Partner – Hart Brown.
However, for the most part, it is just an intention to legislate, with no detail or timetable for implementing the majority of the recommendations and so for businesses trying to prepare for any changes, this is not giving them any degree of certainty.
The only two changes to be implemented in 2019 are itemised pay statements for all workers which most businesses already do and increasing the maximum fine that can be imposed on employers in instances of an aggravated breach of employment rights. These will be quadrupled from £5,000 to £20,000. Although rarely ordered even at £5,000, this must be balanced into any risk assessment when terminating employees in breach of their rights.
From 6 April 2020 the only definite changes are:
There will be a statutory right to a written statement of employment particulars for all workers from day one of employment. It will need to set out more information than the current requirements such as any probationary period, 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. This is an easy change for businesses to make now without having to wait for legislation.
For workers with no normal working hours, or they have normal working hours but the amount of work or days or times they work each week varies, the pay reference period over which holiday is calculated will increase from 12 weeks to 52 weeks (or the number of actual weeks employed if less than 52). This relieves the problems this can cause in industries such as the retail car industry where two number plate changes a year mean a massive peak in commission twice a year which could be exploited by timely holiday requests.
Information and consultation
The threshold required for a request under the Information and Consultation of Employees Regulations 2004 for an employer to put in place staff consultation arrangements will be lowered – from 10 percent to 2 percent of employees (the 15-employee minimum threshold will however remain). Even at 10 percent this has been a little used piece of legislation but most businesses recognise the importance of employee feedback and more are voluntarily putting in place their own arrangements, rather than be subject to the default provisions of the legislation if a formal request is made. It is important to be clear about the terms of reference – can this also be for collective consultation or informing and consulting under TUPE?
The Agency Workers (Amendment) Regulations 2019 come into force which revoke regulations 10-11 of the Agency Workers Regulations 2010 (the ‘Swedish derogation’) which allow agency workers to opt out of equal pay entitlements which become available after 12 weeks in the same role with the same hirer, subject to certain conditions including pay between individual assignments in the UK. Businesses need to be alert to this in terms of how long they engage an agency worker and the potential impact of these changes on cost.
Changes to IR35 in the private sector come into effect in April 2020 which oblige medium to large companies to deduct income tax and NI where ‘contractors’ are being paid through a personal service company.
One of the main recommendations of the Taylor Review was to simplify the question of employment status. The Good Work Plan says: ‘As Matthew Taylor recognised, defining employment status and ensuring our legislation is fit for purpose in a changing world is not straightforward.’ To prove the point, in December 2018, in the Court of Appeal Uber worker status case, Lord Justice Underhill, an eminent employment law judge and past President of the EAT, disagreed with the majority that Uber drivers were workers. This holds out some hope for Uber in the Supreme Court. It is unlikely that any changes to employment status will be made until after this decision.
Until then employers should carefully scrutinise any suggestion that those joining them are ‘contractors’ when they would appear to be just another employee.