Government plans for employment law reform following the Good Work Plan- Latest update

In February 2018 we wrote about the Government’s response to the “Good Work Review” which had been produced by Matthew Taylor. This reviewed the current UK employment law, and made a number of recommendations for change.

In December 2018 the Government published a collection of proposed changes to employment law, based on the Good Work Review.

There are a number of proposals, and it should be noted that many will not come into force until 2020. It should also be noted that the Government is expected to make further commitments and assurances in regard to employment law rights in part of its proposals linked to Brexit.

Among the proposed changes is the legislation to clarify the definitions on the different types of status that workers have in the UK. The proposal is that legislation will aim to clarify the test of employment status. The Government does accept that the differences between the tax law on employment status and the employment law tests on a person’s employment status should be reduced to an absolute minimum, and that the tests for the two areas of law should be aligned. Clearly that step is to be welcomed, and it should help give clarity to individuals and businesses over their tax liabilities and employment rights. The Government has indicated that it will legislate to “improve the clarity of the employment status tests, reflecting the reality of modern working relationships.” It is, however, difficult to see how this will actually improve on the case law. It is also important to note that there will always be situations that do not quite fit clearly into any set category defined in legislation, and it will be inevitable that further case law will be required to interpret any definitions that may find themselves in the legislation. So far, the Government has said that detailed proposals will be published in due course.

On the subject of enforcement of Tribunal orders, the Government has said that it will quadruple the maximum fine for employers who are demonstrated to have shown malice, spite or gross oversight in breaching employment rights, from a figure of £5,000 to £20,000. The impact of this may be questionable, as the current power is still rarely used anyway.

The changes include a proposal that the right to a written statement of employment will arise from the first day of employment rather than the current obligation to provide that statement within the first two months of the employment, and extending the right to “workers” not just “employees”.

One change that will affect certain businesses is the proposal to ban employers from making deductions from staff tips. This will clearly have a significance in the hospitality business, and restaurants and bars. 

An interesting change will be the proposed change to the rules on continuity of employment, so that a break of up to 4 weeks will not break or interrupt the individual’s “continuity of employment”- which is an important concept in calculating a person’s length of service for redundancy pay entitlements and protection against unfair dismissal. Currently the law provides that a break of over one week will break the relevant continuity (it is essential that employers realise that this does not include breaks be means of booked holidays, most sickness absences, or statutory leave provisions- such as maternity leave).

In relation to insecure working patterns, such as zero hours workers the proposals do not go as far as many have called for. The proposal that has been made is that the right to request a fixed working pattern for those that do not have one will arise after 26 weeks. We expect that this will involve set procedures with certain defined reasons that employers will be able to give in order to reject such a request.

The proposals also include the end of the “Swedish Derogation” for agency workers (which excludes agency workers from the right to the same pay as directly-recruited workers if they have a contract of employment with the employment agency). Draft regulations have been published which indicate that the closure of the Swedish Derogation will take effect in April 2020.    

If you need any further advice on any matter raised in this article do not hesitate to contact us at Hallett Employment Law Services Ltd.