“Good Work” Report to Impact Significantly on Employers
Regular readers may remember an article on the “Good Work” Report by Matthew Taylor published in July 2018. It looked at bringing employment legislation into the 21st century and its recommendations addressed some of the problems arising from the “gig” economy. As a result, the Government has now made it known that it is going to implement lots of changes that will affect employers and published draft legislation and a timescale for some of them. It says it will introduce:
• A right for workers (rather than just employees) to be given a written statement of terms and conditions, which must be given on the first day of work (rather than within two months of work starting);
• A right for workers to request a more predictable and stable contract after 26 weeks’ service. For example, a zero hours worker who tends to work at least 25 hours a week may request a contract that guarantees at least 25 hours a week;
• Extension of the current rules on continuity of service. At the moment, a gap of a week in employment can break continuity of service. This will be increased to four weeks;
• Abolition of the Swedish Derogation for Agency Workers. This arrangement means that currently such workers can be paid less than direct recruits under certain circumstances. When abolished agency workers will receive the same as employed workers after 12 weeks;
• A ban on employers taking fees or other deductions from staff tips;
• Introduction of legislation to improve clarity on employment status, reflecting modern working practices;
• An increase in the reference period for determining an average week’s pay for holiday pay purposes from 12 weeks to 52 weeks;
• Publishing the names of employers that do not pay Employment Tribunal awards;
• Increasing the maximum penalty for an “aggravated” breach of employment law from £5,000 to £20,000.
It has also now published draft legislation which will bring some of the commitments it has made to introduce changes, into force. As this is currently just in draft form, some details may change, but here are some of the details published to date:
For employment which begins on or after 6 April 2020 the statement of particulars of the terms and conditions of employment (commonly known as the contract of employment) which you must provide, will have to be given no later than the date that employment begins, rather than within the two months you are allowed at present. In particular the document will need to contain:
• Detail of any terms and conditions relating to hours of work, but specifically any terms and conditions relating to: normal working hours; the days of the week that the worker is required to work; and whether any such hours or days may be variable and, if they may, how that variation is determined;
• Detail any terms relating to paid leave – it seems that this may be required to include details of things such as maternity leave/pay and not just annual leave or sick leave, which is the case at present;
• Include probationary periods and their conditions/length;
• Provide details of any and all other benefits; and
• Include details of any training entitlement which is provided, or any training which the employee is required to complete (including any they will need to bear the cost of undertaking providing this does not bring them below the Minimum Wage levels).
The finer details of the precise terms which apply to pensions, collective agreements and training etc. will still be able to be given in separate documents and within the first two months of the beginning of employment (and must be provided in full, even if the employee leaves within the first two months).
Existing workers will also be able to request their terms and conditions including all of the matters now required, and must be given that document within a month of the request – so advance planning is probably a good idea to ensure that you do not get a large number of requests to process in a short time-frame.
This requirement is also extended to workers, so will cover those personally engaged to undertake work even if they are otherwise not employees, provided you are not their client or customer. Existing workers they will also be able to request a terms and conditions document after the law comes into force.
Calculating holiday pay
The Working Time Regulations will be amended from 6 April 2020 so that the default reference period for calculating the pay to which a worker is entitled on annual leave will be the last 52 complete weeks at the time the leave is taken, or pay is due to be made. Currently this is normally calculated over 12 weeks, but this requirement only applies if the pay varies from month to month or week to week. There do not appear to be any transitional provisions, so unless there are drafting changes, it will come into effect on 6th April 2020 so employers may have to change the basis of the calculations part way through the leave year.
What do employers need to do?
You will need to review your employment contracts and terms and conditions before April 2020 to ensure that they meet the new requirements. Your contracts with contractors and workers need to be reviewed as well and probably amended ahead of the new law coming in. Getting into the habit of always giving a new employee/ worker a written document with their terms and conditions on or before their first day is also a good idea. And talk to your payroll provider about changes to calculating the rate of holiday pay.
If you need help with any of this, please get in touch.
Posted on 21 Dec 2018