(UK Relevant) The Good Work Plan 2020 is in practice now. Are you as a business ready?

What is The Good Work Plan?

Dubbed ‘one of the biggest shake ups of employment law in a generation’ The Good Work Plan came about as a result of an independent review, known as the Taylor Review of Modern Working Practices in July 2017.

Most of the 53 recommendations put forward in the Taylor review were accepted in principle by the government. This resulted in a number of consultations on how these proposals could be successfully implemented. This culminated in the government’s Good Work Plan, which they claimed is their ‘vision for the future of the UK labour market.’

Changes being implemented as part of the Good Work Plan finally come into effect from today. What challenges now face organisations?

July 2017 probably seems like a very long time ago, where Matthew Taylor first published his report into modern working practices and suggested numerous changes were required to improve employee productivity. In December 2018, the government’s response was the Good Work Plan, promising developments to the law over the next few years, in particular April 2020. Since then, ongoing Brexit worries, a General Election and, now, the coronavirus outbreak, may have served to put these changes out of organisations’ minds. However, here we are on the 6 of April 2020, and the new laws have come into effect.

The ‘Good Work plan’ accepts nearly all of Taylor’s recommendations, except those relating to National Insurance contributions, but is said to go further than the proposals in certain areas. The government has confirmed the introduction of new day-one rights for all workers, including the right to holiday pay, sick pay and a payslip. All workers, including zero hours and agency workers, will also have a right to request a more stable contract; although this is just a right to request, and not to receive. Additionally, the Low Pay Commission will be asked to assess whether a higher minimum wage for zero hours workers can be introduced. These steps will provide workers in uncertain roles with greater financial and job security.

The government intends to create additional enforcement powers against organisations who fail to provide their workers with the correct rights. This includes introducing a new ‘naming and shaming’ scheme where organisations who fail to pay tribunal awards will be publicly named. Higher penalties against organisatons who have previously lost a similar tribunal case will also be considered.

Many of the main areas of concern for workers and organisations have been left to future consultations, including a consultation on enforcement of employment rights, such as sick pay and holiday pay, and a consultation on employment status. Status is currently seen as one of the most uncertain areas and the government will be asking interested parties to consider the options available to make this issue easier and clearer, such as introducing new legislation. Once the consultations have closed, the government will then have to take further steps to put these proposals in to effect, meaning any future changes are likely to be many months away.

As of 6th April, new rules change the way you manage your staff — from the paperwork you give new workers to how you work out holiday pay.

If you don't follow these rules, you break the law.

Written contracts of employment

The plan introduces several changes to the right to receive a written statement of main terms (SMT). This document lists all the employee’s key terms of employment, including pay and annual leave entitlements, and up until now organisations have had two months to provide it to a new employee. This grace period has now been removed, meaning the SMT will have to be given to the employee from day one of their employment.

In addition, more details now have to be included in the SMT, as follows:

• the terms and conditions relating to work have been extended to cover terms relating to normal hours of work, days of the week the worker will be required to work and whether these days/hours may vary
• terms relating to other forms of paid leave such as family-friendly leave
• details of other employee benefits, not just those relating to pay, such as benefits in kind or financial benefits
• terms relating to probationary periods including those in relation to length and conditions
• details of training provision and requirements.

Holiday pay

The mandatory reference period for calculating holiday pay has increased. From 6 April, organisations have to use a reference period of 52 weeks, instead of the previous 12 weeks, when calculating holiday pay for staff who work irregular hours and thus have different rates of pay. This calculation method will result in a payment which balances out any peaks and troughs of working hours throughout the year.

Agency workers

'Swedish derogation model' contracts for agency workers are now banned. These contracts offered a legal loophole to avoid the requirement to pay agency workers the same basic pay as direct recruits at the hirer organisation after 12 weeks on assignment. Those who are currently engaged on these contracts are now also entitled to a statement to explain the effect of the ban on their pay, which will need to be distributed by no later than 30 April 2020. Significantly, employers now have to provide an SMT to their ‘workers’, as well as their employees, including zero hours workers and casual workers. Prepare now to protect your business. As a separate measure, all agency workers are now entitled to a key facts sheet before they agree to the terms by which they will undertake work. The information required includes the expected minimum rate of pay, any expected deductions from pay and the type of contract the worker will be engaged under. The Good Work Plan 2020 brings the biggest upgrade to employment law in a generation.

Additionally, a recent Employment Law change that comes into practice from today:

Parental bereavement leave

From 6 April, eligible employees are allowed to take two weeks of leave when they suffer either a stillbirth after 24 weeks of pregnancy or the death of a child under the age of 18. A day-one right, employees can take these weeks either as one single block of two weeks’ leave, or two separate blocks of one week’s leave. A ‘week’ is understood to be any one period of seven days and does not have to begin on any particular day. Eligible employees have 56 weeks following the death of their child in which to take this leave.