Good Work Plan – some legal changes confirmed

The Government has now published the draft legislation which will bring some of the commitments made into force.

Introduction

Earlier this week we confirmed that the Government’s Good Work Plan had been published and we explained what it would mean for employers. The Government has now published the draft legislation which will bring some of the commitments made into force. That means we now have more detail about what some of these changes will mean in practice.

The detail

Terms and conditions

For employment which begins on or after 6 April 2020 the statement of terms and conditions of employment which you have to provide, will have to be given no later than the date that employment begins. It will also now be required to:

  • Detail not only just any terms and conditions relating to hours of work, but specifically any terms and conditions relating to: normal working hours; the days of the week that the worker is required to work; and (perhaps most problematically for some) whether any such hours or days may be variable and, if they may, how that variation is determined;
  • Detail any terms relating to paid leave - presumably aimed at requiring the document to include details of things such as maternity leave/pay and not just annual leave or sick leave (as is currently the case);
  • Include probationary periods and their conditions/length;
  • Provide details of any other benefits - which does raise the question what exactly is a benefit and may be challenging for those of you who offer a number of benefits or have a range of them available; and
  • Include details of any training entitlement which is provided, or any training which the employee is required to complete (including any they will need to bear the cost of undertaking).

The elements of the terms which apply to pensions, collective agreements and training will still be able to be given in separate documents and in instalments within two months of the beginning of employment (although they must still be given if the employment ends before two months is completed). However, any other documents which are given which contain some of the particulars (which will still be allowed for some things such as those covering sick pay), must be given no later than the date employment begins.

Existing workers or those who have left in the last three months, will also be able to request their terms and conditions including all of the matters now required, and must be given that document within a month of the request – so there will be a question for many of you as to whether to re-issue contracts/terms with these details included, to avoid being deluged with such requests.

This requirement is also extended to workers, so will cover those personally engaged to undertake work even if they are otherwise not employees, provided you are not their client or customer. What you do about existing workers may be something to be considered, as they will also be able to request a terms and conditions document after the law comes into force.

Calculating holiday pay 

The Working Time Regulations will be amended from 6 April 2020 so that the default reference period for calculating the pay to which a worker is entitled on annual leave will be the last 52 complete weeks at the time the leave is taken or pay is due to be made (rather than the current 12 weeks, although please note that a reference period is not required in many cases where pay doesn’t vary). If the worker has at that time been employed for less than 52 weeks, a week’s pay will be the average weeks pay over the period worked. Weeks where no pay has been received are ignored for this calculation (and the 52 week period effectively extended), but the calculation will not have to take into account any weeks which were more than 104 weeks before the leave/calculation. There appears to currently be no transitional provisions delaying this applying, so as drafted it looks as if the rules will change overnight on 6 April 2020, even if that means employees will receive different rates of pay for different leave taken within the same leave year.    

Agency workers

The Regulations which abolish the Swedish derogation have also been published and this will happen on 6 April 2020. There will also be an obligation upon agencies to inform workers that the change has applied to them on or before 30 April 2020, where it does so.  In summary, this derogation is important for those who use Agencies (or are Agencies) who engage/pay their workers between assignments. The derogation which is being scrapped currently has the impact of removing the obligation to match workplace pay and benefits which applies to other agency workers. If this applies to you please do talk to us about what it means.

Information and consultation

As the Government said they would, the threshold for requests for an information and consultation body is reduced to 2% of the relevant employees in the undertaking (rather than the existing 10%). This applies to employers with at least 50 employees, but the minimum number making the request cannot be fewer than fifteen. However that does mean that these complex provisions can be initiated by only fifteen employees for many smaller employers and we would expect to see an increase in employers facing such requests (albeit such requests have been rare).  

ET Penalties

Employment Tribunals can currently impose a financial penalty on employers where they decide an employer has breached a worker’s rights and the breach has one or more aggravating features (this is paid to the Secretary of State and not the Claimant). The maximum penalty is to be raised to £20,000 for breaches occurring on or after 6 April 2020.

What does this mean for me?

There will be a need to revisit your employment contracts and terms and conditions ahead of April 2020, and if you are reviewing your documents now it is worth taking these requirements into account. Your contracts with contractors and workers also need to be reviewed and probably amended ahead of the new law coming in. Some of you will need to put in place new arrangements to ensure that terms and conditions or contracts are always issued before someone starts or, at least, on their first day. The changes to the annual leave calculation will be helpful for some and problematic for others, but the impact for you and how you will implement the change will need to be something to be considered over the next twelve to fifteen months.

Comment

All of these changes are now in draft Regulations which will be laid before Parliament. It is likely that they will become law, although amendments are possible. However these Regulations take us a significant step closer to the law being changed.

If this alert raises any issues for your organisation, please do speak to us about it.  Please liaise with your usual contact in the Weightmans Employment, Pensions and Immigration team or speak to Phil Allen, Partner at phil.allen@weightmans.com.

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