From confronting the challenges of the gig economy and modern ways of working, to enhancing employment protections and ensuring vulnerable workers receive their basic workplace rights, the government has set out in its 'Good Work' Report, the steps it plans to take to ensure all work in the UK economy is "fair and decent, with the realistic scope for development and fulfilment".
Off the back of its Good Work Report, the Government has launched four consultations (covering enforcement of employment rights recommendations; agency workers recommendations; measures to increase transparency in the UK labour market; and employment status) in order to explore these proposals in more detail and decide how best to take them forwards. These consultations close in late May and June and we are likely to get more detail on the plans later in the year. The Good Work Report and consultations follow the publication in July last year of the Taylor Review which recommended reform of employment status and workers' rights.
With Brexit top of the agenda and the current climate of change and uncertainty, perhaps it is unsurprising that the proposals are more in the nature of incremental enhancements of employment protections and steps to stop vulnerable workers being denied their basic workplace rights, rather than wholesale reforms. Some of the trickier issues to resolve, such as the lack of certainty around how you decide who is an employee, a worker or self-employed, which hit the headlines again in November in the Uber and Deliveroo cases, will be looked at in more detail through consultation before any changes are announced. No doubt individuals and employers will welcome more clarity and certainty on employment status, and we will have to watch this space to see how this issue is addressed.
10 key points for employers:
Here are ten key points for employers to be aware of from the Report, which are likely to be reflected in changes to employment law in the coming years.
More clarity on employment status – the Government is consulting on how to help businesses and individuals be clearer on whether someone is an employee, worker or is self-employed (perhaps by defining the terms in new legislation, setting out criteria to help determine status or simply introducing an online tool). The government also aims to align how the law deals with status for tax purposes, with how it deals with the status for employment rights purposes. Of course, as a separate point, the rules around automatic enrolment for pensions purposes use yet another categorisation - that of "job-holder" - which catches most employees and workers but not the genuinely self-employed. The consultation doesn't deal with this point but it's worth pointing out that there is a separate government report looking at how to extend automatic enrolment to the self-employed.
There will also be a crackdown on employers treating people who are, in reality, workers as unpaid interns, with HMRC being asked to focus national minimum wage (NMW) enforcement efforts on employers using unpaid interns.
Extension of the right to written particulars to all workers from day one – there will be a new right for all workers to be provided with a document on day one of work setting out the key terms of their contract (known as 'written particulars'). Currently only employees have a right to written particulars of their employment and this applies after one month's service. The Government is consulting on how best to achieve this and what information the statement should include. This right comes into force on 6 April 2019.
Extension of the right to a payslip – there will be a new right to a payslip for all workers, not just employees (as is currently the case), including casual and zero-hour workers. For part-time workers the payslip will be required to state the number of hours they are being paid for.
Right for all workers to request a 'more stable' contract - there will be a right for all workers, not just zero-hour and agency workers, to request more predictable and secure working conditions. The Government is consulting about how this will work, including whether there should be a qualifying period of service and a limit on the number of requests someone can make.
Making it easier to show continuity of service – to make it easier for people in atypical work to establish 'continuity of service’ (which gives access to key rights), the qualifying ‘break in service’ period will be extended from the current period of a week to a longer period (to be decided).
New protections for gig economy workers - the Government is consulting on the best way to define working time so that workers in the gig economy are clear about how the minimum wage applies to them. Also, to help zero hours workers, the Low Pay Commission (LPC) will be asked to explore the impact of introducing a higher NMW/National Living Wage rate for hours that are not guaranteed as part of the contract, as well as alternative options to tackle low pay.
Holiday rights and working time – the Taylor Review recommended that people should be given the option to receive 'rolled up' holiday pay, which means they would get a premium for their holiday instead of paid time off. The Government will not be implementing this proposal because it is unlawful under European law. We will therefore have to wait and see whether there is any change in approach post-Brexit. However, it plans to increase the holiday pay reference period to 52 weeks (from the current 12 weeks), to help ensure that seasonal, casual and zero hours workers receive the holiday pay they are entitled to.
Protections for agency workers – agency workers will be given a new right to know what their rate of pay is and who is responsible for paying it. The issue of potential abuse of the "Swedish derogation" provided for under Agency Workers Regulations, under which workers who have a contract that provides for a minimum level of pay between assignments are excluded from the right to equal pay with permanent employees, will also be looked at in the consultation.
Enforcement of vulnerable workers' rights to holiday pay, sick pay and the NMW and wider review of statutory sick pay – HMRC will be given responsibility for ensuring vulnerable workers are receiving their basic rights at work. More generally, the Government will look at whether to reform statutory sick pay (SSP), including making changes so that all workers are eligible for SSP from day one of their employment, regardless of their income, and so that it accrues based on length of service.
Enforcement of employment awards and increasing employment tribunal fines for employers – the Government's plans include:
- introducing a new naming and shaming scheme for employers who fail to pay employment tribunal awards and making it easier for successful claimants to enforce payment of them
- increasing from £5,000 to £20,000 the maximum penalty for 'aggravated' breach of employment legislation
- requiring employment judges to consider stronger punishments for employers who ignore previous tribunal judgments against them.
Other points worth noting from the Report include the fact that the Government has confirmed it will not be taking any action on non-compete clauses. This is because the majority of those who responded to its call for evidence on the issue in May 2015 said that restrictive covenants are valuable and necessary, and do not unfairly restrict an individual's ability to find other work. On protections that apply during pregnancy and maternity leave, the Government has said that the guidance for employers and individuals will be reviewed and updated, and protections against redundancy will be reviewed.