Plans to strengthen employment law rights have been announced.
The government has responded to the Taylor Review published last summer, which took a closer look at modern working practices and the effects of new forms of work on workers’ rights and employers’ obligations.
In its ‘Good Work Plan’, the government has accepted some of the recommendations put forward by the Taylor Review and launched four consultations to seek views before taking further action.
In brief, the government will:
- Consult on employment status
- Extend the pay reference period for holiday pay
- Extend the right to a written statement of particulars to all workers from day one and extend the right to a payslip for workers
- Create a right to request a more predictable contract for all workers
- Consult on continuity of service
- Name and shame employers who do not pay Employment Tribunal awards
- Enforce the core pay rights applicable to the lowest paid workers
- Make people aware of key rights, such as holiday pay and shared parental leave.
Let’s expand on each of these points.
In recent years, we have seen a flurry of cases being lodged at tribunals and courts from those who work for gig economy companies. The main argument is that individuals are being falsely classified as self-employed so that employers do not have to provide them with employment rights. This has led to calls for more clarity and certainty to determine the boundaries between employees, workers and the self-employed.
The government has decided to consult on how to make it easier to ascertain an individual’s employment status and make it clearer for employers to understand what their responsibilities are. In particular, they are seeking views on whether to codify principles from case law into primary legislation and how a new statutory employment status test could be structured.
If your employees’ hours differ from week to week, holiday pay is calculated on the average pay the employee earned in the past 12 weeks. The Taylor Review suggested extending it to 52 weeks and the government agrees, but will consult to work out the details.
The Taylor Review also put forward that individuals should be given the choice of whether they receive ‘rolled up holiday pay’. This involves not paying holiday pay while the employee is on leave, but paying the employee an extra amount during the weeks that the employee works. The government said that rolled-up pay has been found to be against the law by the Court of Justice of the European Union (CJEU) and would not take up this suggestion, but will consult on other options.
Written statement of particulars and payslips
The government has agreed to extend the right to a written statement of particulars to all workers from day one of employment and will consult on what information should be included in this statement. At present, employers are only required to provide this to each employee whose employment is to continue for more than one month.
Additionally, it has backed the idea of extending the right to a written itemised pay statement to workers. Currently, this right is only afforded to employees.
Agency workers and zero hours contracts
The government intends to create a right to request a more predictable contract for all workers, including zero hours and agency workers. They will consult to seek views on how best to do this.
As part of the consultation on agency workers, the government wants to improve the information provided to agency workers. They propose giving agency workers a ‘key facts’ document, which breaks down what they are paid, stating who is responsible for employment and detailing wages deductions.
The Low Pay Commission will delve into the potential impact of introducing a higher National Minimum Wage rate for those hours that are not guaranteed as part of the contract and the government will examine other ways to address these pay concerns.
Continuity of service
The nature of zero hours contracts may mean that there are breaks in their contract, which can affect the rights they accrue over time. For some rights, the employee must have worked for you for a specific length of time and for others it’s a right from day one.
At present if there is a gap of a week between assignments, continuity is broken. The Taylor Review suggests increasing this to a month. The government agrees it should be extended and will consult to decide on how long it should be.
The Taylor Review recommended shifting the burden of proof from the employee to the employer. Therefore, it would be the employer who would need to demonstrate that a particular employment relationship does not exist. The government has decided to not reverse this at this time but will review after developing an online tool to determine employment status.
The government has welcomed proposals to set up a naming scheme for employers who do not pay Employment Tribunal awards within a reasonable time period and are seeking views on how best to do this.
The Taylor Review had argued that the HMRC should be responsible for enforcing the core pay rights applicable to the lowest paid workers. This includes sick pay, holiday pay and the National Minimum Wage. The government has agreed.
There will also be more of an emphasis on promoting and making people aware of key rights, such as holiday pay and shared parental leave. The government will also improve and consolidate guidance on pregnancy and maternity discrimination to ensure that employer understands their duties.
Some other points
The government will:
- take measures to improve the interpretation of the law and the enforcement action taken by HMRC to eradicate exploitative unpaid internships
- consult on how to ensure all workers receive important information from day one of employment
- seek views on how to define ‘working time’ for gig economy/app-based platform workers.
This is by no means an exhaustive list, but highlights some of the main points announced by the government in their official response to the Taylor Review.
As we can see, the government is trying to clarify and enforce the law, make both employers and employee aware of their duties and rights, and extend the parameters of some rights. Much is subject to consultation, so employers should not panic that a raft of new rights will be coming into force immediately.
To explore this further, seek advice from your Employment Law Adviser.