The Government’s Good Work Plan – A Brighter Future for the UK Labour Market?
Solicitor Sophie Allinson highlights the key proposals and initiatives within the Government’s recently released ‘Good Work Plan’.
What is the ‘Good Work Plan’?
In July 2017, an independent review was undertaken by Matthew Taylor, focussing upon modern working practices. The Taylor Review made recommendations as to how to the Government should shape and develop employment law to embrace modern working practices and ensure workers’ protection and rights in the UK.
On 17 December 2018, the Government published the ‘Good Work Plan’ following a period of consultation in response to the Taylor Review, outlining the Government’s vision for the future of the UK labour market.
The Government states that the Plan, including proposed changes in employment legislation, aims to ensure fair and decent work, clarity of employment relationships and a fair and fit enforcement system, while retaining scope for flexibility in employment relationships.
The Plan aims to provide increased stability and predictability to the workforce, particularly for those working irregular hours. As a result, it is proposed that workers will receive the statutory right to request a more fixed working pattern from their employer following 26 weeks’ service. This may include certainty regarding hours or days worked. It is envisaged that this right will involve a statutory process akin to making a flexible working request, with employers also having the right to reject requests in certain circumstances.
Employees accrue some employment rights over time. For example, protection from unfair dismissal usually only comes into effect after an employee has 2 years’ continuous service. Some employees, however, work intermittently for the same employer with gaps between periods of employment and are currently excluded from accruing such rights if they have a gap of one week or more in their employment. In order to allow more employees to gain access to employment rights, the Plan proposes a legislative change to extend the permitted break in service from one week to four weeks, so that continuity is only broken where the gap is four weeks or more.
Agency workers are entitled to the many of the same employment conditions, including pay, as permanent employees after 12 weeks in the same role. However, a piece of legislation known as the Swedish derogation allows such workers to ‘opt out’ of this right in return for guaranteed pay between assignments. The Plan states that it is becoming increasingly unusual for agency workers to have gaps between assignments and that the Swedish derogation can be abused by employers and the Government therefore proposes to repeal the Swedish derogation and ban the use of this type of contract.
Digital literacy is becoming increasingly important in the UK labour market. As a result, selected basic digital skill courses will be fully funded by Government to support adults to gain skills to equip them for work. Additionally, all schools will be expected to appoint a careers leader to improve careers provision.
The Plan also refers to the Government taking steps to develop the National Retraining Scheme with a £100 million initial commitment to retrain and help the workforce redirect careers to respond to an economy which is changing as a result of new technology. Elements of the National Retraining Scheme are intended to launch in 2019.
Tips and Gratuities
Levels of pay are widely recognised to have a direct relationship with quality of work. As a step toward ending low pay, the Plan states that the Government proposes to legislate to ban employers from making deductions from staff tips. In the hospitality industry, good service is often rewarded through tips from customers, which can amount to a large proportion of the income of workers who are often on the minimum wage.
The question of employment status and whether someone is employed, a worker or self-employed is often a contentious issue, with the Employment Tribunal and HM Revenue and Customs applying different and complex tests for determining someone’s employment status. As a result, the Plan proposes to legislate to improve clarity and provide consistency of the employment status tests and with improved guidance and online tools being made available.
Such changes are intended to preserve flexibility in the labour market whilst improving clarity for individuals. The Plan however, does not detail how employment status tests will be improved, although it does state that more emphasis will be placed when determining status on the employer’s control over the individual.
Written Statement of Terms
Further clarity is proposed in terms of the information that is supplied to workers and employees. Currently, employees (but not workers) are entitled to a written statement detailing key information in respect of their employment and this has to be provided within 2 months of commencement of employment. The Plan aims to provide access to a written statement from day one for both employees and workers. Additionally, the information required in the written statement will be extended to provide further information including how long a job is expected to last, all remuneration (not just pay) and duration and conditions of probation periods.
Under current law, the amount of holiday pay for those working irregular hours is calculated by using a 12 week reference period. However, the Plan recognises that this period may not accurately reflect the average working hours of a worker and may not capture peak working periods. As a result, the Plan proposes to legislate to extend the holiday pay reference period from 12 to 52 weeks.
The Government recognises that modernising employment rights also requires the enforcement system to be modernised. £1 billion is to be invested in the courts and tribunal system to address the difficulties faced by individuals seeking to enforce their rights.
The Plan proposes a new end-to-end system guiding Tribunal users through each stage of the process, so as to provide improved guidance and advice to claimants.
A Civil Enforcement Project is to be developed, including improved guidance and information for those who are required to take enforcement action to recover unpaid Tribunal awards.
Also, new legislation is proposed increasing penalties on employers who breach employment laws and also legislation to impose sanctions for repeated breaches by the same employer and an obligation placed on judges to consider utilising these sanctions.
Flexibility in the labour market can benefit both employers and employees. However, the Government states that some employers abuse such flexibility, jeopardising workers’ well-being and financial security. The Government states that the Plan aims to ensure fair and decent work, which provides a realistic scope for development and fulfilment in the modern UK labour market. Further, in order to enforce modernised working rights, a clearer, fairer and more efficient enforcement system is to be developed.
It is worth noting that the above are, at this stage, only proposals. Further information is still to come in respect of the proposals and, specifically, how they are to be implemented into employment law.
If you have any queries in respect of the above or require other assistance in respect of human resources or employment law, please contact the Burnetts Employment Law and HR team on 01228 552222 or by email via our online form .
About the author
Sophie is a Solicitor in the firm's HR & Employment team.