Five Good Work Plan laws employers need to know about
The 6th April 2020 is a significant date for employers. Why? Because that’s the date, some of the biggest Good Work Plan changes come into play. Announced in December 2018, the Government’s Good Work Plan promised to introduce changes to both increase transparency and strengthen rights of workers in ‘unsecure’ employment. Here are a few of the laws employers need to know ahead of April.
1. Written contracts of employment
The plan introduces several changes to the right to receive a written statement of main terms (SMT) with effect from 6th April 2020. This document includes all the employee’s key terms of employment, including pay and annual leave entitlement. Employers currently have two months to provide it to a new employee; however, in April this grace period is to be removed, meaning the SMT will have to be given to the employee when they start employment. More details will also have to be included in the SMT, as follows:
- the terms and conditions relating to work will extend to cover terms relating to normal hours of work, days of the week the worker will be required to work and whether these days/hours may vary
- terms relating to other forms of paid leave such as family-friendly leave
- details of other employee benefits, not just those relating to pay, such as benefits in kind or financial benefits
- terms relating to probationary periods including those in relation to length and conditions
- details of training provision and requirements.
Significantly, employers will have to provide an SMT to their ‘workers’, as well as their employees. Currently, only employees are entitled to receive this document, but workers, including zero-hours workers and casual workers, will also be brought within scope.
2. Holiday pay
The mandatory reference period for calculating holiday pay will increase under the plan. From 6th April 2020, employers will have to use a reference period of 52 weeks, instead of the current 12 weeks, when calculating holiday pay for staff whose pay varies, including the zero-hours workforce. This calculation method will result in a payment which balances out any peaks and troughs of working hours throughout the year.
3. Agency workers
‘Swedish derogation model’ contracts for agency workers will be banned from 6th April 2020. These contracts currently offer a legal loophole to avoid the requirement to pay agency workers the same basic pay as direct recruits at the hirer organisation after 12 weeks on assignment. Those who are currently engaged on these contracts will be entitled to a statement to explain the effect of the ban on their pay, which will need to be distributed by no later than 30th April 2020.
As a separate measure, from 6th April 2020, all agency workers will be entitled to a key facts sheet before they agree to the terms by which they will undertake work. The information required includes the expected minimum rate of pay, any expected deductions from pay and the type of contract the worker will be engaged under.
4. Employment status
The Government has confirmed that the current employment status structure will be reviewed, meaning that the tests used to determine who is an employee, worker or self-employed will be adjusted. The results of this are likely to be that many self-employed individuals will be re-classified as workers, although there is currently no indication as to when this will take place.
5. Extra rights for unstable hours workers
Another key change is the introduction of the right for workers who do not have stable and predictable hours to request a switch to a more stable contract. Employers would be required to justify any refusal to switch according to legislative conditions. Other proposals include a right to reasonable notice of shifts to be worked, and a right to compensation for cancelled shifts. Currently, there is also no confirmation as to when this will be introduced into law.