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What all employers need to know about the new workplace reforms

It is the "largest upgrade in workers' rights in over a generation" according to the Government's Business Secretary Greg Clarke, but what do employers need to know about the Good Work Plan?

The Good Work Plan proposes a number of significant changes to employment law. They can be summarised as follows:

  • It will no longer be possible for employers to pay agency workers less than their own workers in certain circumstances, i.e. the Swedish Derogation clauses that used to facilitate this will be abolished.
  • Legislation will be enacted to clarify the current employment status test (i.e. whether an individual is an employee, a worker or self-employed). The tests for employment purposes and tax purposes will be harmonised as part of this process.
  • A right to request a fixed working pattern will be created for those who do not have one, after 26 weeks on a non-fixed pattern. Presumably this right will be similar to the current right to request flexible working.
  • A written statement of terms must be given to employees on their first day of work (it is currently required within two months).
  • A written statement of terms must be given to ‘workers’ as well as employees.
  • Continuity of employment will survive a break of four weeks between contracts (currently it survives only one week).
  • The reference period for calculating a week’s pay for holiday pay purposes will  increase from 12 weeks to 52 weeks.
  • Employers will be banned from making deductions from staff tips.
  • The penalty for ‘aggravating conduct’ during dismissals will increase from £5,000 to £20,000.

Some employers would only be required to make a few small adjustments to their HR practices in order to comply with the changes suggested but those who engage agency workers on Swedish Derogation terms and/or casual staff on a zero hours or ‘self-employed’ basis will need to give some serious thought to the likely implications on their business.

* Update *

Draft legislation has now been published in relation to a number of the above. The key dates for employers’ calendars are:

6 April 2019:

  • Penalties for ‘aggravating conduct’ will increase from £5,000 to £20,000.

6 April 2020:

  • Swedish Derogation for agency workers will be abolished.
  • A written statement of terms must be given to workers as well as employees, and this must be done from day one of employment.
  • The reference period for calculating a week’s pay for holiday pay purposes will  increase from 12 weeks to 52 weeks.

Dates when the other proposals will come into law have not been published yet but it seems that the government are targeting 6 April 2020.

If you would like to discuss how your business will need to adapt its HR practises please do not hesitate to contact us.

Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.

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