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The Good Work Plan: What the government needs to consider

6 min read

28 January 2019

The government will unveil plans to improve workers’ rights and bolster the power of agencies to enforce labour market standards. But what will they need to be aware of – and what impact will this news have.

The Government’s “Good Work Plan” was published in December 2018 in response to the Taylor Review, with the heart of the government’s vision stated as being its “commitment to improving quality of work in the UK”.

Following scepticism from organisations such as UNISON regarding the value it would add, the government appears to have accepted several recommendations made by Matthew Taylor.

Businesses should be aware of these commitments because if they are successfully implemented, they will enhance workers’ rights in the UK. However, in the absence of clear draft legislation to accompany many of the proposals, the real impact of the Good Work Plan remains largely unclear.

Many companies will undoubtedly welcome some of the proposals accepted by the government.

In its press release on this matter, the Confederation of British Industry stated that “focusing on issues like employee engagement, fairness and inclusion boost productivity as well as being the right thing to do” and many businesses are likely to share the same view.

After all, employees who are properly incentivised and feel that they are being treated fairly by their employer are arguably more likely to want to add greater value to their company.

However, the measures the government has agreed to undertake are aimed at companies who currently abuse the system and transfer a significant level of risk to individuals.

Whilst the Good Work Plan is a step in the right direction to prevent this, it is by no means a fail-safe mechanism – ultimately, in view of modern working practices, there will need to be a culture shift in companies where flexibility is prioritised over individual employment rights.

The success of these measures will heavily depend on the approach taken by companies moving forward, but the Good Work Plan will certainly alert them to their obligations and the implications of non-compliance.

The key proposals the government has committed to legislate upon, and which businesses, therefore, should be aware of, are:

  • A right to request a more predictable and stable contract after 26 weeks’ service (although employers are not obliged to agree to requests);
  • An extension of the period required to break continuous service (for the purpose of gaining employment rights) from one week to four weeks;
  • Repeal of the Swedish derogation (which currently allows employers the ability to pay agency workers less than their own employees in some circumstances) and banning the use of this type of contract to withhold agency workers’ equal pay rights;
  • Improving the clarity of the employment status tests to reflect the reality of modern working relationships (albeit without any further information as to how this will be achieved);
  • Extending the right to a written statement to all workers and making it a day one right (the government also says it will expand the information required in these statements to be as useful as possible for both the employer and employee);
  • Extending the holiday pay reference period from 12 to 52 weeks;
  • Requiring all employment businesses to provide every agency worker with a Key Facts Page including important details, such as the type of contract the worker is employed under and the minimum rate of pay they can expect;
  • Enforcement of tribunal awards – increasing the maximum aggravated breach penalty from £5,000 to £20,000; naming employers who are not paying their Tribunal awards in a published list, and requiring employment judges to consider the use of sanctions in cases of repeated breaches by the same employer. Although the increase to the cap on the aggravated breach penalty seems significant, it is worth noting that this penalty has very rarely been applied since its introduction in 2014; and
  • A new enforcement system for vulnerable workers in respect of their holiday pay rights, whereby a state enforcement body can pursue any payment of arrears on their behalf.

The government’s commitment to some of the Taylor Review proposals offers an element of certainty, both for employers and employees, as to how the legal landscape might look for workers’ rights post-Brexit, albeit further clarity is required in the form of draft legislation and timings.

Furthermore, the Good Work Plan arguably does not go far enough adequately to protect workers; for example, in its failure to provide guidance regarding how the employment status tests might be improved; or to address low wages.

This is unlikely to be the last we hear of the matter, amidst the daily technological advancements being made to boost businesses’ profitability, and therefore the government’s final position ought to embrace such advancements without prejudicing workers.

Pending further draft legislation, employers need not take any immediate steps by way of preparation, given that details relating to when and how the above reforms will be implemented are very limited. Until these matters have been finalised, it is difficult to reach any conclusions regarding the future of workplace rights in the UK.

Pooja Dasgupta is an associate at CM Murray and Beth Hale is a partner and general counsel at CM Murray