Good Work Plan – the “largest upgrade in workers’ rights in over a generation”

The government has today published the “largest upgrade in workers’ rights in over a generation”. The reforms set out in the “Good Work Plan” are based on the findings of a review into modern working practices led by Matthew Taylor; for the full report click here.

The proposals aim to provide clarity for both employers and workers, while also enhancing workers’ rights, and reforming the enforcement rights against employers. Although there is currently no date for the proposed legislation employers need to be aware of what their increased obligations in relation to employees and workers will eventually be, as well as the stricter enforcement methods and increased sanctions for non-compliance.

Clarity for employers and workers

It is fair to say that there is confusion when it comes to determining whether someone is a worker or an employee. The Government is proposing to legislate to improve the clarity of the employment status test. The Good Work Plan states that the aim of the proposals is to reflect the reality of modern working relationships so that businesses are unable to avoid their responsibilities by trying to misclassify or mislead their staff. This wording is clear that the Government is keen to tighten the restrictions on how employers can ‘work around’ employment status.

In addition to providing clarification on employment status the proposals are also seeking to legislate to:

  • provide workers with an entitlement to a statement of particulars (and ensure that workers and employees are given this on their first day of engagement not within a two month window);
  • ban employers making deductions from staff tips;
  • change the rules on continuity of employment, so that a break of up to four weeks (instead of the current one week) between contracts will not interrupt continuity; and
  • set out the specific information that agency workers must be given to help them make informed choices about the work they accept.

Fairer enforcement

Along with the promise of clarity for employees and workers the government has committed to reform enforcement for breach of employment legislation it is proposing legislation which will;

  • increase the maximum level of penalty that Employment Tribunals can impose from £5,000 to £20,000 if employers are found to have demonstrated “malice, spite or gross oversight”;
  • create an obligation on Employment Tribunals to consider the use of sanctions where employers have lost a previous case on broadly comparable facts;
  • extend enforcement, on behalf of vulnerable workers, to underpayment of holiday pay; and
  • increase enforcement protections for agency workers where they have pay withheld or unclear deductions made by an umbrella company.

Not only does this mean that the scope of sanctions will been widened, once legislation is passed, but that they will also increase fourfold, meaning the potential consequences of breaching employment legislation will be particularly severe.

Although a date is to be announced for implementing the proposals contained within the Good Work Plan will have an impact on every employer, to some extent. It is therefore important that you are aware of the legislative changes. If you’d like any further advice please do not hesitate to contact Laura Tennet.

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