Good Work Plan: How to prepare

May 7, 2019

The government has created a “Good Work Plan” following the Taylor Review of Modern Working Practices. It is aimed at improving working conditions across the UK. The new legislation is thought to be the biggest reform of UK employment law for 20 years, and is aimed at both supporting workers and strengthening the UK’s business environment.

The Taylor Review was an independent review of modern working practices, commissioned by the Government and carried out by a team of experts led by Matthew Taylor, Chief Executive of the Royal Society of Arts. The review aimed to identify ways that legislation could be implemented to improve current working conditions, with one overriding ambition, as stated within the resulting report:

“All work in the UK economy should be fair and decent with realistic scope for development and fulfilment.”

The review looked at important issues such as working practices, reward schemes, job security, terms and conditions, and training and development. The result was the Good Work Plan, published in December 2018, addressing the issues raised in the Taylor Review. The following five principles have been identified as essential to “Good Work”:

• Overall worker satisfaction
• Good pay
• Participation and progression
• Wellbeing, safety and security
• Voice and autonomy

Good principles, of course, but what exactly does the new legislation cover, and how will it affect UK workers?

What will the Good Work Plan mean for workers?

The key proposals put forward under the Good Work Plan that will affect the UK workforce are as follows:

• Workers will receive a written statement of their rights, including pay and leave eligibility, on their first day of work.
• Agency workers will be provided with specific information about their employment, including contract details, how they will be paid, and any deductions that the company will take.
• A legal loophole that allowed employers to pay less to agency workers than long-term employees for the same work will be repealed.
• Employment status will be aligned across employment law and tax, allowing a worker who is recognised as self-employed for tax purposes to be recognised as such under employment law.
• There will be improvements to employment status tests so that businesses cannot misclassify workers for their own benefit or convenience.
• A break of up to four weeks between contracts will no longer break continuity of employment for contracted workers.
• Employers will be prevented from making any deductions from staff tips.
• The holiday pay reference period will be extended to 52 weeks, allowing workers to claim holiday pay that is a fair reflection of hours worked.
• State enforcement on behalf of vulnerable workers will be extended, giving workers more confidence to challenge unfair practices within the workforce.
• Penalties already in place for issues such as underpayment of the National Minimum Wage will be extended to issues such as underpayment of holiday pay.
• After working in a non-fixed pattern for 26 weeks, workers will have the right to request a more stable contract and a fixed working pattern.

Unsurprisingly, there are many who claim that the reforms have not gone far enough. While workers do get new and important rights under the new legislation, there is still nothing to directly address the issue of zero-hours contracts, which has been central to discussions of workers’ rights for many years now. In addition, while the reforms are obviously putting laws in place to extend rights to temporary, agency and contract workers, unions have claimed that the reforms have missed the opportunity to meaningfully rebalance power in the UK’s “gig economy”.

What will the Good Work Plan mean for businesses?

The hope is that the Good Work Plan will essentially benefit the whole of the UK economy, by improving working conditions, worker wellbeing, and productivity. For UK businesses, however, the reforms will mean making changes to some current working practices, and employers should, of course, prepare for the impact that this will have. The government has already laid draft statutory instruments for many or the proposed reforms and is encouraging businesses to prepare, though many of the new regulations will not come into force until April 2020.

Some of the most important changes will involve employee contracts, and businesses should be prepared for the fact that any casual employee who has been working for them for six months may request a more stable contract, and more predictable hours. This will mainly affect businesses that employ casual workers on zero-hours contracts, so those employers should consider what their response will be.

It should be remembered that while zero-hours contracts have been widely criticised, they suit some workers, such as students or those working a second job, so it is unlikely that every casual worker will request their contract be changed. However, some will, and employers will have three months to make a decision on any request, so it will be advisable to have a strategy in place.

Employers who use agency workers will need to pay close attention to the new legislation, and plan for the fact that after 12 weeks of service, agency workers must be paid the same pay as a permanent worker. It is also vital to plan for the fact that casual workers who have short breaks between contracts (of less than four weeks) will now be able to qualify for employment benefits that rely on “continuity of service” such as maternity benefits.

Other preparations that employers can make include:

• Preparing a statement of basic terms that can be customised, to be given to all employees when they start work.
• Preparing a “Key Facts Page” to be given to agency workers, setting out their contract details.
• Putting in place a process for employment status tests, to clarify the employment status of each employee.
• Adopting a process for consultation arrangements as employees will have the right to be more involved in some workplace discussions.

As with any major change, businesses that study the legislation carefully, and put in place new processes and strategies to enable the company to adapt, will be able to minimise any negative impact, and take advantage of the positives that more clarity and employee satisfaction can bring.