The Good Work Plan, dubbed as the biggest shake up of employment law in a generation, is a set of reforms and legislations, published by the government in 2019, that aims to improve the UK labour market.
Born from an independent review – the Taylor Review of Modern Work Practices (July 2017) – the Good Work Plan will introduce several changes to employment laws and is some to come into effect on the 6th of April 2020.
As a result, businesses and employers will be requires to review and update their contracts of employment and company handbooks to ensure that they are compliant with these new laws.
Below, we expound on the important changes that will arise as part of the Good Work Plan.
Changes to ‘Main Terms’
- Currently, only employees are entitled to receive the ‘main terms’ – now ‘workers’ will be entitled to a statement of main terms too, including casual workers and zero-hour workers.
- Currently, employees, whose employment is to exceed 1 month are entitled, are entitled to a statement of main terms and conditions within 8 weeks of their start date. The Good Work Plan will require all employees and workers to receive their statement of terms no later than their first day of employment or engagement.
- Although the statement of main terms already contains certain pieces of information – the new law will require further information, such as whether normal hours of work vary, all types of paid leave you offer, and all the remuneration/benefits the employees receives.
As it currently stands, working out the holiday pay of an employee who does not have a fixed pay – i.e. employees that work on commission – is done by calculating their pay over a 12-week average.
Under the Good Work Plan, employers will be required to work out the average weekly pay over a 52-week period instead.
If the relevant (non-fixed payed) employee has not yet worked for 52 weeks, then the average pay would be worked out over the duration for which they have been employed.
Presently, determining one’s employment status is done by considering factors such as personal service, control and mutuality of obligation tests.
However, under the Good Work Plan this will change.
From 6th April 2020, the Government will now review the way that employment status is determined and may alter their emphasis on the current tests. Employers should be wary that contractors may not fall under the category of self-employed.
Employers or workers with ‘unstable’ or ‘unpredictable’ contracts, such as zero-hour contracts, currently have no power to request that their employer considers making the contract more stable.
However, the Good Work Plan will ensure that staff will have the right to request a more stable contract after 26 weeks of employment.
For example, they may wish to request a guaranteed minimum number of hours and certainty as to which days they will be asked to work.
Employers will have a legal duty to consider them but will be able to refuse the request on certain grounds.
Currently, agency workers can engage on a ‘Swedish Derogation’.
This is a model of employment that allows an agency to hire the employee directly and does not entitle the employee the same pay as those employees directly hired by the end user of the agency.
However, it was recommended that this be repealed under the Taylor Review. The reason being that it will encourage more employers to take on permanent employees, thus providing a greater level of certainty and security to those individuals.
Therefore, when the Good Work Plan comes into action, this type of contract will be banned, meaning that after 12 weeks of service, an agency worker will be entitled to receive the same level of pay as a permanent worker.
However, it is worth noting that this is only the case once he/she has undertaken the same role with the same hirer for 12 continuous calendar weeks. ‘Pay’ refers to any sum payable in connection with the agency worker’s employment. This includes certain bonus payments, holiday pay, overtime, shift allowances and unsociable hours premiums. However, it excludes company sick pay, maternity/paternity pay, adoption pay, pension contributions and redundancy pay.
One possible consequence that the abolishment of Swedish Derogation is the likelihood that agency fees may rise.
How we can support you
Here at Guardian Support, we can provide you with a dedicated HR consultant who will guide you through every aspect of The Good Work Plan and how it may affect your business.
We can also support you in implementing these changes into your workplace, such as writing up contracts of employment and company handbooks, so that you can rest assured your business is fully compliant.
Call us today on 0845 2626 260 to discuss your business needs and find out how we can add value to your organisation.