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05 June 2019
Following the government's Good Work Plan, which was published in December 2018, new legislation has recently been introduced to implement the first of the proposed changes. This article takes stock of the reforms enacted so far, flags some of the practical issues and sums up what is still to come.
In December 2018, following Matthew Taylor's extensive review of modern employment practices, the government unveiled its Good Work Plan, which set out a long list of proposals (for further details please see "Good Work Plan – any good?"). The employment law reforms mapped out by the government are still in their infancy, but this is a good moment to reflect on where things stand and what lies ahead.
Some changes proposed in the Good Work Plan have already been implemented. A 'naming and shaming' scheme is in force for employers that fail to pay compensation when ordered to do so by an employment tribunal. Defaulting employers will be named in a list to be published quarterly.
The maximum penalty for aggravated breach of employment rights has increased from £5,000 to £20,000. As these penalties are not widely used, it is questionable how much of an impact this change will have. The government will apparently be introducing guidance on how such power should be exercised.
Since 6 April 2019, employers must provide payslips to individuals who have 'worker' status, not just to employees. If an employee or worker is paid by reference to time worked, their payslip must now state the hours that they are paid for.
The new requirement for payslips to state hours paid for seems straightforward, as most employers will already have this data. However, one quirk has come to light – the rule applies even if the individual is paid by the day, rather than hourly. This potentially affects professional, skilled individuals, who are often paid on a daily basis. The practical answer is likely to involve using notional hours for the working day (which may already be set out in the contract). Of course, individuals need only be provided with a payslip if they have worker status and are not self-employed.
Four key changes will be introduced in April 2020. A smaller proportion of the workforce will be able to demand information and consultation arrangements (just 2%, down from the current requirement of 10%, but still subject to a minimum of 15 employees).
Holiday pay for workers whose pay varies or who have no normal working hours will be based on average pay over the previous 52 weeks (rather than 12 weeks, as now).
Statements of employment particulars must be provided to workers, as well as employees, and this must be done before, or at the beginning of, employment. The particulars will also need to be expanded to include:
In relation to agency workers, the so-called 'Swedish Derogation' – an opt-out from the right to equal treatment for agency workers who are paid between assignments – will be abolished. Agency workers will also be entitled to a key information document.
These changes are mostly straightforward, but some practical issues are starting to emerge, for example:
There is currently no draft legislation to implement any of the other proposals in the Good Work Plan. Most significantly, the promised clarity over the tests for deciding on an individual's employment status has not been provided and it remains unclear how the government intends to try to align those tests with the existing tax framework. In the meantime, the government continues to introduce new legislation for people with worker status, such as the new requirements for payslips and statements of employment particulars described above – yet the entire concept of an intermediate worker category remains under consideration.
Rather like a British bank holiday weather forecast, there is the promise of clear sky on the distant horizon but the outlook still looks very foggy.
For further information on this topic please contact Charlotte Morgan at Lewis Silkin by telephone (+44 207 074 8000) or email (firstname.lastname@example.org). The Lewis Silkin website can be accessed at www.lewissilkin.com.
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