Following an independent review of working practices (The Taylor Review of Modern Working Practices) in July 2017, the Good Work Plan is essentially a set of recommendations from the UK government designed to establish working guidelines or ‘the vision for the future UK labour market.’ It affects all businesses employing staff, agency workers or subcontractors, with some changes due from 6th April 2020.
In 2018 the government launched four consultations based on the Taylor Review, which sought views on implementing the recommendations focusing on:
- Employment status
- Increasing transparency
- Agency workers rights
It received over 400 detailed responses from stakeholders and individuals, and from this the Good Work Plan took shape with a focus on:
- Fair and decent work: at the heart of the recommendations from the Taylor Report was the aim that all employers should offer individuals equal opportunities to progress and develop. It also highlighted the issue of some businesses transferring too much business risk to the individual, hence the need for all workers to have stable contracts (particularly those who work intermittently or fluctuating hours). Fair pay also falls in this bracket, along with how workers receive tips (see further on).
- Clarity for employers and workers: the review recognised that there are discrepancies around employment status, particularly where individuals could be classed as self-employed (but are performing the same role as an employee). It was identified that more needs to be done to make tax implications clearer, and the entire system needs to be more transparent.
- Fairer enforcement: to establish a level playing field for businesses, there will be a tougher approach to financial penalties in areas such as the underpayment of the National Minimum Wage.
Some recommendations have already come into force such as the right for all workers to receive a pay slip outlining hours worked. However, the majority of changes will be implemented this April.
What are the key changes to be aware of?
The following changes will come into force from 6th April 2020.
Written statement of terms
Currently any personnel employed for more that one month is legally obliged to receive a written statement of terms within two months of the commencement of employment. Under the Good Work Plan, all new staff (employees and workers) are entitled to a written statement from the first day of employment.
Agency workers rules
Currently agency workers receive the same pay and conditions as employees after completing 12 weeks of continuous service (and in the same role). However, there is currently an exemption to this if the workers are employed with a permanent contract with a temporary work agency and are being paid between assignments by them (this is known as Swedish derogation). The new rules will see all workers, who have completed a 12-week continuous working period, now entitled to the same pay as those employed directly by the business. They are also entitled to a key facts statement clearly outlining the terms of their employment and work.
Changes coming into effect from April around IR35 will impact medium to large employers in the private sector. The main focus is to determine the status of self-employed contractors versus employees. We have a full blog post on IR35 and what it means for business, take a look here.
The current holiday pay reference period is 12 weeks. Under the changes, this will increase to 52 weeks. This puts the onus on the employer to calculate the holiday pay looking back at 52 weeks (based on how much they have worked and been paid to calculate the average weekly pay). The rationale behind this is to help standardise pay, particularly for those in seasonal or fluctuating roles.
There are a number of other changes on the horizon, which currently do not have a date for implementation. However, all employers should be aware:
The right to request a stable working pattern
This will be subject to at least 26 weeks service from an employee.
Break of service period
The gap required to break continuity of service will increase from one to four weeks, which means it’s easier for those with irregular working patterns to qualify for continuous service.
Flexible working requests
The Flexible Working Bill was introduced in July 2019, stating that flexible working should be the default position for all employees. At present, the CIPD and other organisations are involved in consultations to mould this policy, including how flexible working should be defined.
These changes will impact all businesses, but particularly those employing agency workers / contractors or with staff on fluctuating shift patterns. Our advice is:
- Review all contracts in relation to existing workers.
- Conduct an assessment of workers / employees to check where your business sits with IR35 (there is a small business exception – check out our blog post for more information and to calculate where your business is categorised).
- Bear in mind the new written statement of terms rules, which mean you will need have them ready for their first day of employment, as opposed to once you’ve made a hire from 6th April onwards.
For advice on whether your business is impacted by any of these changes, or a review of your policies and procedures chat to us today.