At long last the Government has announced its response to the Matthew Taylor report on modern working practices, published in July 2017. Mr Taylor is a former aide to Tony Blair and is currently the chief executive of the Royal Society of Arts. He was charged by the previous Conservative government with reviewing employment law practices, with a particular emphasis on the emergence of the “gig economy”, characterised by zero hours contracts. The Government’s response and recommendations is set out in the “Good Work Plan“, a 62 page detailed response which, commendably, lists all 53 recommendations in the Taylor Report and provides itemised responses
According to the BBC, significant changes will take effect from Monday 24 December, including an entitlement to a written statement for all workers (not just employees) of terms and conditions from the first day of a person commencing work (currently within two months). However, I am not sure that this is correct since secondary legislation will be required and, given the Government’s busy schedule, I can’t see it being fitted in in the near future. However, it makes sense to prepare for the changes and change procedures, where necessary to do so, as soon as possible. UPDATE: The main statutory instrument dealing with changes to required employment particulars has been published and is not due to come into force until 6 April 2019. The statutory instrument extending the rights to workers (not just employees) has also been published and is also scheduled for 6 April 2019.
It is no surprise that zero hours contracts have not been banned. When being interviewed on BBC Radio 4 earlier this week Mr Taylor cited the example of the trial run by McDonalds (referred to in my earlier blog posts on the topic) in which employees were offered the choice of fixed hours or zero hours contracts. Only 20% took the fixed hours option, thereby demonstrating that zero hours contracts do work for some people.
Among other notable accepted proposals, as matters stand, a break in service of one week does not affect the calculation of the qualifying period for continuous service. In future, breaks of up to four weeks will be disregarded.
Additional information in the form of a Key Facts Page will be provided to all agency workers at the start of each contract, setting out their contractual and employment rights, so that they are clearly understood from the outset.
Significantly, written statements of terms of employment (to be issued to both employees and workers from day one) must include further particulars. Additional information required to be provided includes:
- how long a job is expected to last, or the end-date of a fixed term contract;
- how much notice an employer and worker are required to give to terminate the agreement;
- details of eligibility for sick leave and pay;
- details of other types of paid leave, e.g. maternity and paternity leave;
- the duration and conditions of any probationary period;
- all remuneration (not just pay) – contributions in cash or kind, e.g. vouchers and lunch; and
- which specific days and times all workers are required to work.
We will be updating our template documents as soon as full details are published.
There will be a new state enforcement system covering the national minimum wage, sick pay and holiday pay enforcement. This will be administered by HMRC.
The Government has set up a taskforce to review flexible working rights and, in particular, to consider whether all jobs should be advertised as flexible from day one, unless there are sound business reasons not to do so. This is a notable development which will need to be taken into account when specifying job details.
Employers will be banned from making deductions from tips.
The reforms will also stop the ability to pay agency staff less that permanent employees (the so-called Swedish Derogation). Here’s the statutory instrument for this one.
Employers will be liable for a penalty of up to £20,000 (previously £5000) for aggravating conduct (in addition to paying compensation) in the event of a finding against them in an employment tribunal.
There will be legislation to streamline the employment status tests so that they are the same for employment and tax status. As the law stands, someone can be employed for employment law purposes and self-employed for tax purposes (and technically vice versa) and, as I’ve pointed out on very many occasions in this blog, this can lead to great confusion. I think that this presents a much bigger challenge than the headlines suggest and it is notable that the report refers to it as “the right ambition” rather than providing any details about how it might be achieved.