The Government has confirmed which parts of the Taylor Review it will take forward in its Good Work Plan published on 17 December 2018.
The Government has confirmed which parts of the Taylor Review it will take forward in its Good Work Plan published on 17 December 2018. The changes might appear to be relevant only to those businesses making use of agency workers, casuals and temps and operating in the gig economy. However, some of the changes will impact employees. Organisations will need to revisit their employment practices, particularly around employment contracts and section 1 statements as well as their use of consultants and atypical workers.
Now is a good time to take stock of which changes need only be considered in the context of workers, consultants, casuals and temps and businesses who consider themselves to operating the gig economy, and the broader changes relevant to all employers.
Employers should check whether and when changes will be needed to their HR operations and documentation to plan ahead for each workstream.
|What will change?
|Repeal of the Swedish derogation
||06 April 2019
||Agencies are obliged to notify affected staff by 30 April 2019
|Itemised pay statement extension to workers
||06 April 2019
||Not strictly flowing from the Good Work Plan but an early announcement and implementation post Taylor
|Annual leave calculation changes from 12 to 52 weeks
||06 April 2020
|Section 1 statements extended to workers and as a day 1 right for all
||06 April 2020
||Employers who rely on contracts to provide the section 1 obligatory information, will need to review their contractual terms to ensure compliance by April 2020
|Additional information in section 1 statement list
||06 April 2020
|| As above
|Lower threshold for Information & consultation trigger
||06 April 2020
||This remains a right for employees to request
|Right to request fixed hours/days
|| Will apply after 26 weeks
The key changes:
Section 1 statements
A new right, requiring new employees and workers to be provided with their section 1 statement from day one comes into force from 2020. As a matter of good practice, most employers provide the section 1 details in an offer letter or within the formal contract of employment. More significantly, the detail that must be provided will change.
This minimum mandatory information will also have to be provided to workers. Given the ongoing legal challenges and risk of individuals being categorised as employees and not workers, careful thought will need to be given to the language used and the content of these written statements: our recommendation is to have different documents, which clearly distinguish between the different engagements.
Section 1 content
In future, Section 1 content will need to address:
- how long the job is expected to last - in the case of an open-ended appointment this should be confirmed. This is aimed at confirming whether the employment is permanent or temporary, and if temporary or for a fixed period, the end date the fixed term contract must be made clear.
- details of sick leave and pay eligibility are already a requirement but will extend to workers being notified or the document stating clearly sick pay is not provided; other types of paid leave (such as maternity leave and paternity leave) parental leave, bereavement leave etc. will also have to be identified.
- details of all remuneration (beyond pay) and benefits.
- the length of any probationary period plus “any conditions”, which appears to require some reference to how this will be assessed.
- the specific days and times when workers are required to work. Hours of work are already required under the current section 1 provisions, however, the new provisions will require hours and the days of the week to be identified, whether or not such hours or days are variable, and if they are variable’ how they vary or “how that variation is to be determined” ie the business drivers influencing the flexible requirement.
Style and form of section 1 information
The Good Work Plan says that some of the information can be provided through staff handbooks however, staff handbooks are seldom designed to include workers and doing so may blur the distinction. Most organisations will want to retain the staff handbook as a document relevant only to employees. An example of the risk of confusion these new provisions create is the need to notify workers of the applicable disciplinary/conduct rules and discipline and grievance procedures which apply to them.
Itemised pay slips
From 06 April 2019, all workers will be entitled to payslips. This new provision applies to any pay slip covering a pay period which begins on or after the 06 April 2019. Payments to be made in that pay period, must be accompanied by a relevant payslip.
Again, the question is whether a different design/document is adopted for workers. No doubt payroll providers will assist here. These new payslips must show the hours worked and paid for, where pay varies according to the number of hours. This may be a particular challenge for those businesses who must also set out separately the number of hours which are relevant for the calculation of the individual’s National Minimum Wage. The impact of any unpaid leave or statutory sick pay will also have to be identified where this affects pay and the worker is paid according to the amount of time worked. The rate of pay must appear on that payslip, either as a single total or by showing different hourly rates where this varies by the type of work.
No detriment protection
These new statutory rights also allow individuals to complain if the required information is not issued to them (with enforcement penalties) as well as protection against victimisation or detrimental treatment for asserting statutory rights.
Holiday pay calculations
Another example of the wider impact which the Good Work Plan will have is to change the reference period the calculation of holiday pay. Many will welcome this change. Clear rules will be needed about how organisations transition across in their holiday year and holiday pay arrangements, from the current regime to the new 52-week calculator.
Despite the risk of being overtaken by continuing and emerging case law, the Government intends to introduce a statutory test setting out the key factors which will determine employment status. This test will comprise an assessment of the contract between the individual and the organisation; the requirement for personal service and whether the individual is in business on their own account (in itself requiring consideration of the amount of control, mutuality of obligation and the extent to which the individual is integrated into the business).
This is the one area where, as yet, we do not have draft statutory instruments.
I & C thresholds
To encourage greater individual voice in the workplace, in future employees will be able to seek the establishment of an information and consultation body (domestic work councils), where (as now) at least 15 employees trigger a request, with the threshold reduced from 10% of employees to 2%. Importantly, keeping in mind concerns that were raised about this proposal from Matthew Taylor to include workers and agency staff on such bodies and have them count towards the thresholds, the statutory instrument implementing this item, says that only employees will benefit from this right and there will be no extension to include workers.
Breaks in continuity
Periods of work which break continuous employment will be extended. Currently a gap of one week can break continuity of service: this is going to be extended to four weeks. In reality, whether continuity of service is broken is no longer a straightforward mathematical calculation; there are complex considerations around whether such breaks (even if in future a break extends beyond four weeks) are really temporary cessations of work in any event.
Right to request fixed working pattern
Finally, a new right to request will apply to those who work varied hours or days. Once an individual has worked 26 weeks, they will gain the right to request fixed hours or fixed days. What the Good Work Plan does not make clear is the process that the organisation must follow in order to respond to such a request or indeed the basis for any refusal. It may be modelled on some form of justification or legitimate grounds akin to the flexible working provisions because presumably, organisations will not be given carte blanche to reject requests of this nature.
So, there is more than meets the eye to these provisions. Some will affect the wider employee population, fundamental provisions around minimum section 1 statements and payslips, as well as holiday pay calculations.
This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.