Before we sign off for the holidays, here’s our festive take on the Government’s splash announcement & its vision of providing fair and decent work for UK workers.
Even amid the saturation coverage of parliamentary Brexit antics, it probably didn’t escape your notice that on Tuesday 18th the Government announced the ‘largest upgrade in a generation to workplace rights’. With all due respect to the press office of the Department for Business, Energy and Industrial Strategy, this is small fry compared to the heady heights of the mid-to-late 1990s, which saw the Disability Discrimination Act, Employment Rights Act, National Minimum Wage and Working Time Regulations all hit the statute book in quick succession. Does 20 years count as a generation? Answers on the back of a recycled Christmas card…
Perhaps the press statement claim makes for better headlines than ‘technical tweaks (mostly minor) around the edges of workplace rights’ even if that description might be closer to the truth. There was also little mention of the fact that some of the proposals had already been announced back in February. We now have actual dates on which some (although by no means all) of the measures will come into force, but the earliest real change will not be seen until April 2020. By then, it is entirely possible that many of these reforms will have been overtaken by events – namely Brexit and the surrounding political turmoil. So is it all as hackneyed and pointless as a Mrs Brown’s Boys Christmas special? Grab a mince pie and read on…
What are the changes and what will they mean for employers?
This is a package of measures bundled together to create a publicity splash, some of which are reasonably well developed, whilst others remain essentially at the planning or consultation stage. We outline some of the more noteworthy changes below, paying particular attention to those which have reached the stage of being formulated into regulations, as well as other more major proposals. You can expect further announcements over coming weeks and months and, as ever, we’ll keep you informed. Do get in touch if you have any questions about your own organisation and how these changes will impact on your employment practices.
Statement of Particulars
The current obligation to provide a statement of particulars of employment to employees within two months of commencing employment is to be tightened up, making this a ‘Day 1’ right. There are tweaks to the particulars that must be included, for example around probationary periods and paid leave. Further, the right to receive particulars is extended to workers, rather than just employees. These changes will apply to individuals commencing in their roles after 6th April 2020, so employers have a reasonable amount of time to review their standard documents and upgrade where necessary. Organisations not in the habit of issuing terms before individuals start work will have to review their on-boarding procedures.
Changes will be made to the Working Time Regulations 1998 to provide that where workers receive variable pay, their holiday pay will be calculated using a 52-week reference period, rather than a 12-week reference period. Again, these changes come into force in April 2020. Whilst this will be of limited impact for most employers, it is likely to be a positive development in the education sector (including colleges), mitigating some of the uncertainty around term time only working and holiday pay and consigning to history this year’s difficult EAT decision of Brazel v The Harpur Trust. It may also have a positive impact in sectors with heavy seasonal fluctuations in workload. Balanced against that is the need to adopt and implement a new system, and for payroll and HR to deal with more atypical cases, as numerous workers will not have the 52 weeks’ of fully paid employment to fit into the standard regime. This change will also come into force from 6th April 2020.
There are also plans (as yet with no proposed date) for an external agency to be charged with enforcing holiday pay for vulnerable workers.
The Agency Workers Regulations 2010 generally prohibit agency workers who have attained a 12-week qualifying period from being paid less than permanent workers in the same role. There is an exemption to this protection where (in summary) the agency worker has a permanent contract with his/her agency which meets minimum requirements. (You may have heard of this referred to as the Swedish derogation, which makes it sound much more exciting than is actually the case).
New regulations introduced as part of the GWP get rid of this exemption from (you’ve guessed it…) 6th April 2020. Employers using agency workers should review whether this will have a budgetary impact for them. Employment businesses will need to consider a more thorough overhaul of the terms and conditions on which they operate.
There is a little-known (and even more little-used) provision in the Employment Tribunals Act 1996 for Employment Tribunals to impose a financial penalty (paid to the Secretary of State) where an employer loses a tribunal claim and its actions are found to have ‘aggravating features’. New regulations increase the maximum penalty from £5,000 to £20,000. This is in respect of breaches occurring after 6th April 2019, so we can expect to see the first awards made from approximately a year later.
Information and Consultation
Changes to the Information and Consultation of Employees Regulations 2004 will reduce the proportion of employees who need to request to negotiate an information and consultation agreement in order to oblige the employer to act upon it from 10% to 2%. Again, this will be in force from 6th April 2020.
Minimum Wage and Salary Sacrifice
Legislation is proposed to address the problem of employers inadvertently falling foul of minimum wage rules when they offer the benefit of salary sacrifice schemes. No date for this yet. This is often an issue for employers with large female workforces on relatively low pay and the change is to be welcomed.
The GWP proposals include increased funding for enforcement bodies, such as the Employment Agency Standards Inspectorate, and to establish a new enforcement body to protect vulnerable workers.
From our perspective, this is a welcome recognition that whereas the law in many cases is fit for purpose, the obstacles to enforcement (particularly for low paid and vulnerable workers) mean than unscrupulous employers can sometimes ignore their legal obligations with minimum risk. Moving enforcement away from individual worker claims and towards a rigorous inspectorate regime should not only protect employees, but also enable compliant employers to compete on a level playing field.
And the biggie… employment status
There is no intention (woolly or otherwise) to abolish zero-hours contracts within the GWP. The government accepts the Taylor Report’s recommendation that, used fairly, these can provide valuable two-way flexibility for both business and workers and should therefore not be banned. However, it rejected Matthew Taylor’s proposal to afford gig economy workers who are ‘dependant’ on a particular ‘gig platform’ (such as Uber or Deliveroo – just 2 of those featured in recent law reports), employment rights such as national minimum wage guarantees, which could be enforced against that platform.
There is an aspiration to ‘tighten up’ on abuses which occur within the gig economy and also to clarify employment status, ideally aligning it for tax and employment purposes. Most experts in the sector would agree that clarity (as a minimum) would be a Good Thing, but how to develop a legal test which can be applied easily and gets to the right result each time? Unless we can cadge a sprinkle of fairy dust from a passing red-clad gentleman on the night of the 24th December, this may prove an impossible task. Watch this space…