05 Mar Is your business ready for the Good Work Plan?
While you may have not yet heard of the Good Work Plan, you will likely be affected by it along with almost every business in the UK. As the new Government policies are set to take into force on the 6th of April 2020, here is everything you need to know to stay up to date with the changes.
What is the Good Work Plan?
The Good Work Plan is set to be “one of the biggest shake ups of employment law in a generation”. It is essentially a set of new policies that will significantly change the landscape of enforcement. These derived from 53 recommendations that in 2017 were independently reviewed by Taylor Review of Modern Working Practices. Taylor Review proposed consultations for each of them, explaining how they could be successfully implemented in the UK. The majority of these made up the Good Work Plan as the Government’s “Vision for the future of the UK labour market”.
In the official reports, the Government claims that this new set of laws will create a labour market that celebrates good employers, rewards employees for their hard work and is ambitious about boosting earnings and productivity potential in the country.
What will the Good Work Plan change and how will it affect my business?
Whilst there are plenty of proposed policies that will reform our work lives and strengthen employee rights, we’ve highlighted some of the main policies in the Good Work Plan that will affect your business.
Fair and Decent Work
This strand of policies change some of the old laws to ensure that employees are provided with a realistic scope to develop and grow in their work opportunities. This will be done through these specific entitlements:
- The right to request a more stable and predictable contract - This could be in a form of guaranteed minimum amount of hours or a certainty on which days they will work. Your employees will be able to make such a request after 26 weeks of employment.
- Extended break period in a continuous service - The employees that work on and off for the same employer for a long time can find it difficult to access some of their employment rights, as some of them require the service to be of a particular length. To fix this existing issue, the break period will be extended to four weeks instead of one week.
- Improved rights for agency workers - Agency workers are entitled to receive an equal amount of pay as a permanent worker after 12 weeks of service. However, there is an opt out option (also called “The Swedish Derogation”) that guarantees them a secured level of payment between temporary assignments. This option will be banned in order to avoid using this type of contract to avoid equal pay rights for agency workers.
- Staff tips for the staff - If any of your staff receive gratuities/tips and you take a deduction, you’ll have to change your policy. This legislation will ban employers from deducting any money from staff gratuities. It will help to create a better working environment for employees and give a piece of mind for consumers who are not sure if their tips actually reach the staff.
- Information and consultation rights - This law ensures that your employees have rights to get involved in discussions about agreed topics in the workplace.
Clarity for Employers and Workers
This category concerns itself with making employment laws more transparent, as there have been a lot of disagreements around the individuals’ status of employment. Both employers and employees need to be certain in their positions.
- Request for status tests - To have a clearer communication between employers and workers, the legislation will make sure that employees have a right to request for status tests. This is especially important for such workers as Uber drivers, where the line between employed and self-employed becomes blurred.
- Statement of employees rights - Similar to status tests, this reform further ensures the transparency between employers and workers by providing employees with entitlement to ask for a statement of their rights on appointment. This means that you should always be ready to explain employee’s rights to them, if they request so.
- Clear information for agency workers - Employers will be required to provide workers with the Key Facts Sheet within employment documents that will help them make informed choices about the work they take on.
- Holiday pay - There will be an extension of the holiday pay reference period from 12 to 52 weeks. This is the period used when calculating an average week’s pay of your employees, which determines the holiday pay they are entitled to. This is to solve the issue of those who do not have a regular working pattern. When the pay reference period becomes 52 weeks, it will better represent the true amount of hours they do.
The Government also made a commitment to launch an awareness campaign, to teach employers and workers about the holiday pay entitlements.
The fairer enforcement section will bring the other rights to full realisation by ensuring that the enforcing industry is fair, clear and efficient. The new laws will protect vulnerable workers and make sure they are aware of their rights as well as prevent employers from ignoring their responsibilities repeatedly.
- Increased maximum level of penalties - This legislation will increase the maximum possible monetary penalty from £5,000 to £20,000 upon aggravated breach. This is to stop employers from taking advantage of vulnerable employees who are not aware of their rights.
- Naming and shaming - The Good Work Plan also introduced a way to deal with employers who do not pay the compensations awarded by an employment tribunal. Not only will they receive possible additional fees but they will also be publicly named and shamed.
- Umbrella companies - The Employment Agency Standards Incorporate focuses on agency worker rights, ensuring that they are getting adequate pay. The new legislation will extend their remit to also cover cases from umbrella companies, as these often employ agency contractors.
How to prepare as an employer?
With most of the new laws of the Good Work Plan covered, you may still be uncertain how to prepare yourself for the changes. To make it a bit easier for you, here are the most important points to keep in mind when preparing:
- Improved written employment contracts - As of the 6th of April, all the written contracts of employment will have to include a “Statement of Main Terms” which is essentially a page with explanations of the key terms used throughout the contract. Besides that, the contract will have to be given to the employee on the day one of employment, so make sure you have it updated and ready before taking on new workers in April.
- Employment status - There will be adjustments in the tests used to determine the status of employment - who is an employee, a worker or self-employed. It is likely that self-employed people will be re-classed as workers.
- Rights for agency workers - If you use services of agency workers, you should be aware of their new rights and changes. One of these is that the “Swedish derogation model” will be banned, which means that you will have to use the same payment methods as for your direct recruits. Additionally, agency workers will be entitled to a Key Facts Sheet that explains their payment details, so make sure you have that prepared as well.
- Extended holiday pay reference period - After the Good Work Plan comes into force, be prepared to count the holiday pay of your employees based on a 52 week reference period instead of 12 weeks.
Have any questions?
If you are still worried about the new Good Work Plan laws taking place on the 6th of April and are unsure if your business is prepared, we can help!
Here at ASfB, we are happy to advise you on any questions or concerns about your company and its finances. If you want some help preparing for the fast approaching Good Work Plan changes, contact our friendly team on 01202 755600 or email firstname.lastname@example.org.