Government announces reforms to workers’ rights in latest Good Work Plan

The Government has announced that it intends to bring in legislation to improve protection for agency workers, zero-hours workers and others with atypical working arrangements and to improve enforcement of their rights.  However, a number of its plans apply more widely to all employees and workers. The announcement follows on from its publication of its Good Work Plan and a series of consultations earlier this year and is contained in its latest Good Work Plan.  

What does the right to request a stable contract clause include?

All workers will have the right to request a more predictable and stable contract after 26 weeks’ service.  This means that they will be able to ask for a more fixed working pattern to give them greater certainty and security.   

What are the changes to the rules on continuity of employment?

Currently a one week gap in employment with the same employer breaks continuity. This will increase to four weeks, making it easier for employees to maintain continuous employment and therefore to accrue employment rights and protections.  

What will be included in the written statement of particulars for all workers and who is entitled to it?

The current right for employees to receive a written statement of particulars of employment will be extended to all workers and it will become a day one right for both employees and workers.  The information required to be included in the statement itself will be expanded so that it must include details of how long the job is expected to last (or the end date of a fixed term contract), notice periods, sick leave and pay, other leave such as maternity and paternity leave, length and conditions of any probationary period, all remuneration (not just pay) and which specific days and time workers are required to work.  Some of these items are new and others could previously be provided in a separate document, such as the staff handbook.  

What are the changes to the holiday pay reference period?

The reference period for calculating holiday pay will be increased from 12 weeks to 52 weeks to address seasonal variations which can impact on the level of holiday pay.  

What is the impact of the abolition of Swedish derogation?

The Swedish derogation enables agency workers to opt out of the right to equal pay with direct employees of the end-user and instead to receive a salary between work assignments.  The Government considers that the derogation has been abused and has confirmed that it will be repealed.  As a result, all agency workers will have the right to the same pay as employees employed directly by the end-user once they have worked in the same role for 12 continuous weeks.   

What are the changes to the extended Information and consultation rights for workers?

The threshold required for requesting information and consultation arrangements (national works councils) is to be increased. Currently 10% of employees (subject to a minimum of 15) must make the request but this is to be reduced to 2% (although the 15 employee minimum will remain).    

What changes have the government introduced regarding staff tips?

The Government will bring in legislation banning employers from making deductions from staff tips.  

Have changes been made to enforcement of employee rights?

The Government announced a number of improvements to the enforcement of worker rights.  Employers who do not pay employment tribunal awards will be named and shamed.  

The penalty employment tribunals can award for aggravated breaches of workers’ rights will be quadrupled, so that a tribunal can award a maximum penalty of £20,000, instead of the current £5,000.  It will also provide new guidance providing examples of how employment tribunals can use this currently underused power. 

The Government also plans to tackle repeat offending so that employers who repeatedly breach employment rights on the same issue will face sanctions.  It will consult further on the detail of this.  

It will also introduce state enforcement of holiday pay rights so that workers can ask the state to pursue arrears, instead of having to bringing an employment tribunal claim to enforce their rights.

What are the changes to employment status included in the plan?

The Government accepts that the tax and employment law tests for employment should be more closely aligned and will bring forward more detailed proposals on how this might be achieved.  It will also legislate to improve clarity of the employment status tests and will improve the guidance and online tools available to help understand employment status.  Its new test for determining whether someone is a worker or self-employed will place greater emphasis on control and less emphasis on obligations of personal service which can be defeated by the inclusion of a contractual right to send a substitute which is rarely used in practice.

When will these reforms be introduced?

The Government has not given any indication in its Good Work Plan of when these reforms will take effect. However it has published legislation indicating that a number of the changes will come into effect in April 2020, including changes to the right to a written statement of employment particulars and the holiday pay reference period, the repeal of the Swedish derogation and the extension of information and consultation rights. The increase in the penalty for aggravated breaches is expected to come into force on 6 April 2019 and the naming and shaming scheme applies to claimants registering the sum as unpaid from 18 December 2018 onwards.