The Good Work Plan - Government Proposals for Employment Law Reform
Following the much publicised Taylor Review, the government has proposed a series of changes to employment law, some of which will take effect in 2019. Our report covers the aspects with the biggest impact on smaller employers and is a ‘must read’ for all business owners and Directors.
Following the much publicised Taylor Review, the government has proposed a series of changes to employment law, some of which will take effect in 2019.
Amongst the responses to the Taylor Review, the 62 page document which you can see here contains the following important changes to employment law:
- A right to written particulars of employment or engagement (or an employment contract) from day 1 of employment. This will have an administrative impact on employers some of whom choose to provide employment contracts within the current 2 month window. Currently there is no requirement for a worker to receive any written terms – the right only exists for employees.
- An extended range of information must be included in written particulars (or contracts) including information about entitlements to sick pay, family friendly leave, probationary conditions and specific days and times of work.
- A right to request a more stable contract after 26 weeks of working in the case of zero hours workers and employees. The right to request will place a statutory duty on employers to consider requests reasonably and will set a maximum timeframe for doing so, based on the example given on page 14 of the review this is likely to be within 3 months of receiving the request.
- An extension of the holiday pay reference period from 12 weeks to 52 weeks, ensuring that all employees and workers will have their holidays paid at their average pay for the whole year.
- An extension of the time required for continuity of service from the current 1 week to 4 weeks, meaning that far more casual employees and agency workers will preserve continuity of service (which in turn accrues additional rights) over longer periods than previously.
- A new test to simplify employment status and align tax decisions with employment decisions. We’ve seen a huge volume of ‘self employed’ cases in 2018 and we predict the flow will increase in years ahead. At the moment HMRC often decide self employed people are actually employed (and therefore employer’s NICs and tax falls due to the Revenue) while employment courts regard the same person as self employed. There isn’t much detail in the paper on how this will be achieved but ‘detailed legislation will follow.’
- Legislation to ensure staff tips are not withheld by the employer. Legislation already exists to ensure that employers cannot use tips as an excuse to pay below the national minimum wage rates, but it appears that this latest addition will make it unlawful for employers to make deductions from tips for the purposes of recovering money from staff under a range of circumstances.
- A reduction in the percentage of the workforce required to request formal employee consultation forums from 10% to 2%. Under current regulations if 10% of workers ask their employer (normally by way of a petition) to consult with them formally over a range of issues the employer is mandated by law to set up an ‘ICE’ forum (Information and Communication with Employees.) Unions, who will often try and organise the forum, regard this as a soft entry point into non-unionised businesses, and the reduction to 2% (subject to a minimum of 15) will make ICE forum requests much more likely.
Some of these changes will have a significant impact on smaller employers, notably the right to written particulars (or a contract) on day 1, and the new right of zero hours people to request a review of their contract after 26 weeks – which will require a new policy for staff handbooks.
While at present we do not have dates for the introduction of the new requirements, we expect some of these to become live in 2019 – 2020.