02 March 2020
The big employment law shadow lurking over 2020 is the Good Work Plan. To ensure you’re prepared for the major changes that are coming into force, we’ve put together this guide.
Here, we’ll cover all of the major legislative changes within the Good Work Plan. If you want to skip ahead to any particular area, you can do so with one of the links below:
Changes already in force:
Changes taking effect on 6 April 2020:
- Reduction of the thresholds of support for consultation rights
- Holiday pay reference periods
- Right to Written Statement of the Main Terms
- Agency workers
Changes coming into effect with no set date:
- Employment status frameworks for employment rights and tax
- Enforcement of statutory holiday pay
- Right to a more stable contract
- Break in continuous service
What is the Good Work Plan?
So, where did this all begin? During Theresa May’s premiership, there were a number of proposals and consultations on key issues in employment law, particularly in regard to the ‘Gig Economy’.
Following recommendations set out by the 2018 Taylor Review of Modern Working Practices, these proposals became the Government’s Good Work Report. Some elements of the Good Work Report have already come into force. With more changes coming into force in April 2020, the Good Work Plan has been dubbed the biggest overhaul of employment law in 20 years.
So what’s changing and how should you respond? Let’s break down each of the upcoming changes…
Changes already in force
Increasing maximum penalty imposed by employment tribunals
From 6th April 2019 the maximum penalty you can receive at an employment tribunal is increasing from £5,000 to £20,000 for an aggravated breach. So, if you are found to have breached any worker rights, and the breach has one or more aggravating features.
If the penalty is paid within 21 days, the amount of the penalty is reduced by 50%.
On 6th April 2019, the first change of the Good Work Plan came into force. You must now give all of your workers and itemised payslip. In many cases you’ll also have to put the number of hours worked on a payslip too.
You now need to include the following on your payslips:
- Gross salary
- The amount deducted from pay, and why
- The net amount
For a full breakdown of all the things you need to know about the new payslips, see our FAQs here.
Changes taking effect on 6 April 2020
Thresholds of support for consultation rights reduced
This change applies to the Information and Consultation of Employees Regulations (ICE Regs). These regulations give employees the right to be informed and consulted about issues in the organisation.
This arrangement only comes into force if requested by 15 or more employees (or 10% of the workforce). It can also come into force if you choose to start it of your own accord. The regulations currently apply to business with 50 or more employees only.
As of 6 April 2020 the threshold to make a request will be reduced from 10% to 2% of employees. However, there still needs to be a minimum of 15 employees to make a request.
Holiday pay reference periods
Currently, when working out a worker’s holiday pay entitlement, you would look back at their previous 12 paid weeks.
However, as of April 2020 this period will be extended to 52 weeks if the individual has been employed for at least 52 weeks. For workers who’ve been with the organisation for fewer than 52 weeks, the reference period is however many weeks they’ve been employed.
Right to a written statement of main terms (SMT)
Currently, employers are required to issue new employees with a Written Statement of the Main Terms and Conditions of Employment (known as Written Particulars) within two months of starting work. As of the 6th April employees and workers are entitled to an Written Particulars from day one of employment.
The additional information you need to include under the Good Work Plan, includes:
- How long the job is expected to last (or state the end date of a fixed-term contract)
- Terms relating to normal hours of work. This includes day of the week the worker will be required to work, plus whether these days/hours will vary
- How much notice is required from both the employer and the employee
- Details of eligibility for sick leave and Statutory Sick Pay
- Details of any other types of paid leave, including family-friendly leave
- Duration and conditions of any probationary period
- Which specific days and times workers are required to work
- Training entitlements, requirements, and whether it’ll be paid for by the employer
- Details of other employee benefits, not just those relating to pay
The current exemption for employment lasting less than one month will also be abolished.
These type of contracts, also known as ‘Pay Between Assignment’ contracts, entitle agency workers to receive pay when they are not assigned to an end-user but exempt the agency worker from equal treatment to pay when they reach 12 weeks’ service within an assignment. Agency workers will no longer be excluded from the equality provisions of the Agency Workers Regulations 2010.
This guarantees equal wages with comparable permanent workers for all agency workers once they reach 12 weeks’ service in one assignment. If you employ agency workers, you must inform them that they have the right to equality of treatment. This statement must be given by the 30th April 2020.
Key Facts Page:
The Good Work Plan requires employment businesses to issue agency workers with a Key Facts Page or 'key information document'. This document must include information on:
- The type of contract
- The minimum rate of pay
- How the individual will be paid (and by whom)
- Any deductions or fees that will be taken
- Any monetary benefit entitlements
- Entitlement to annual leave and payment
- An illustrative example of what the above means for their take-home pay
Changes coming into effect with no set date
Employment status frameworks for rights & tax
Due to a significant number of disagreements on employment status in the gig economy, concerns were raised about some individuals not receiving their rights.
As a result of this, proposals are to be put forward to align the current employment law framework to fit with this new form of employment status.
A consultation has happened, but no progress has been made on creating the desired clarity. Therefore, no changes have been announced.
Enforcement of statutory holiday pay
Currently, when an employer doesn’t pay holiday pay entitlement correctly, the employee had to take them an employment tribunal. This will change with the Good Work Plan.
The government is introducing a state-led enforcement regime to assist vulnerable workers. However, there’s no date set for this change to come into force, yet.
Right to a more stable contract
The government have also committed to introducing the right for all workers to request a more stable contract. Those who are happy to continue working variable hours each will still be able to do so. This right just means that those who want more certainty can request a fixed working pattern.
There’s no guidance as to what form this will take. For example, you could set fixed hours per week, or certain days of the week. And, if it’s not possible to give a more stable contract, you don’t have to. But, you must at least consider the request and judge whether it’s reasonable.
Employee can request a more stable contract after 26 weeks’ service. There’s currently no set date for this legislation to come into force.
Break in continuous service
New legislation will extend the time required to break a period of continuous service. Currently, this period is one week or more. This will be extended to four weeks or more. The purpose of this extension is to make it easier for employees with irregular working patterns accumulate continuity of service and more employment rights.
Rights such as the right not to be unfairly dismissed or the right to statutory maternity pay usually require a particular length of service.
There’s no set date for this legislation to come into force.
Got a Good Work Plan question?
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This guide outlines the forthcoming employment law changes and offers guidance on how to avoid being caught off-guard by non-compliance.
Find out how to prepare for upcoming changes set to come into force in April 2020. Plus, discover which areas are yet to be given a date and could come into force at any moment.
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