What a week it has been for news and legal changes! As you may have seen, the Good Work Plan (“the Plan”) was released by the Government earlier this week along with a press release and draft legislation. So, what's the big deal?
Well, the good news is that nothing is imminent so you can still enjoy the festivities and welcome in 2019 in a merry mood as planned! The less good news is that the government is hailing the introduction of the Good Work Plan as "the biggest package of workplace reforms for over 20 years"! This in turn means legal changes are coming and employers will have to make changes to comply.
The Government has confirmed a variety of legal changes that will affect employers, recruitment businesses and more. As a first step in dealing with this, businesses will want to understand what the key changes are and when it is happening. It would also be useful to understand what steps should be taken at this point and how to prepare for the changes. Am I right?
That’s where this handy blog comes in to help and provide you with a good starting point and plan...
What are the key changes then and when is this all happening?
The Government’s Plan and the accompanying press release can be found here. It’s over 60 pages so I suggest that you get comfortable before reading it in full!
In terms of background, the Plan is the Government’s latest response to Matthew Taylor’s review of the impact of modern working practices and another recent review. As you may remember, following Matthew Taylor's report, the Government then consulted over what action it should take in 4 separate resulting consultations. We can now see their further thoughts and decisions in the Plan.
In the Plan, the Government commits to building a fairer economy for everyone by making legal changes including for example:
- ensuring that tips left for workers go to them in full;
- extend the holiday pay reference period from 12 to 52 weeks, ensuring those in seasonal or atypical roles get the paid time off they are entitled to (expected to be brought in 6 April 2020);
- that workers are paid fairly by providing agency workers with a key facts page when they start work, including a clear breakdown of who pays them, and any costs or charges deducted from their wages (expected to be brought in 6 April 2010);
- enforcing vulnerable workers’ holiday pay for the first time;
- repealing the Swedish Derogation (expected to be brought in on 6 April 2020). As you know, the Swedish Derogation is an exemption under the Agency Workers Regulations 2010, which means that an agency worker is not entitled to equal pay (in comparison to comparable employees at the end client) after a 12 week qualifying period on assignment so long as certain conditions are met;
- introducing a list of day one rights including holiday and sick pay entitlements and a new right to a payslip for all workers, including casual and zero-hour workers (expected to be brought in 6 April 2010);
- introducing a right for all workers, not just zero-hour and agency, to request a more predictable and stable contract (expected to be brought in 6 April 2010);
- the Secretary of State for Business, Energy and Industrial Strategy takes on a new responsibility of ensuring “quality of work”;
- revising the GLAA’s licensing standards to ensure that they reflect current worker rights and employer obligations;
- the Government will introduce legislation to expand the remit of the Employment Agency Standards Inspectorate to cover umbrella companies and give them the ability to take enforcement action against them;
- taking further action to ensure unpaid interns are not doing the job of a worker; and
- quadruple maximum employment tribunal fines for employers who are demonstrated to have shown malice, spite or gross oversight from £5,000 to £20,000 and introducing a new naming scheme for employers who fail to pay employment tribunal awards (expected to be brought in 6 April 2019).
Expected dates of implementation linked to the above changes have been included above where known at the time of writing.
There are other changes as well to be aware of, including the employment status tests being amended following further research (a much needed change in my view), changes to make it easier for casual staff to establish continuity of employment, lower thresholds for requesting information and consultation arrangements and more!
That all sounds pretty daunting, right? Well, fear not, as I will help you formulate a plan at the end of this blog to help deal with it.
What about the end of the Swedish Derogation exemption for agency workers and the resulting impact this will have on employers who are recruitment businesses?
I did a blog last month on the proposed end of the Swedish derogation and what this means for recruitment businesses, which you can find here.
The Agency Workers (Amendment) Regulations 2018 repeal the Swedish Derogation and will come into force on 6 April 2020. The practical impact of the changes are that all agency workers will be entitled to equal pay under the AWR after the 12 week qualifying period is met. Where there is a Swedish derogation contract in place, then the amendment regulations also confirm that the recruitment business must take certain prescribed steps in advance of 30 April 2020.
The amendment regulations also provide a right for the agency worker not to be unfairly dismissed or subjected to a detriment due to a prescribed list of reasons. The exact reasons are set out in the draft legislation, but the gist is that it will include any reason relating to the amendment regulations. This reinforces the need to handle any changes to the employee’s terms or your relationship carefully.
Practically, the removal of the Swedish Derogation is likely to lead to many recruitment businesses having to re-visit client and employee arrangements and terms, which needs careful consideration. I have set out some tips in the next section about what employers can be doing at this stage to get their heads around the changes and what they can be doing at this stage.
What should employers do now?
The changes will no doubt raise a number of concerns for recruiters and employers. A good start for those businesses is to:
- get up to speed on the changes as early as possible;
- work out which changes affect your business and clients;
- review your internal processes that are affected (for example, what information do you already provide to workers on day one now, how is holiday pay currently dealt with, how many workers are under Swedish derogation arrangements etc);
- seek legal advice on proposed strategies for addressing and implementing the changes as needed (well I would say that wouldn’t I, but it does make sense);
- watch out for any amendments to new draft legislation as it passes through Parliament; and
- When ready, talk to clients and keep them informed to show you are up to speed and to make sure you are on the same page as appropriate.
If advice is needed on dealing with any of the changes mentioned, then please do get in touch with me by email on email@example.com or one of my other colleagues in the employment & recruitment team here at Brabners.
the biggest package of workplace reforms for over 20 years