12 Key Points For Employers From The Good Work Plan
The Good Work Plan was published by the government in December as a result of lengthy consultation in relation to modern working practices in the UK, including increasing reliance on zero hours contracts and lots of case law demonstrating the confusion over whether staff from Uber drivers to Deliveroo riders should be treated as self-employed or not.
The changes that will be implemented by the Good Work Plan can be summed up in the following key points:
1. Currently, any employee who is going to be working for you for one month or more is entitled to receive a written statement of terms within two months of starting. The Good Work Plan will bring this forward so that all employees must receive a written statement of terms from day one of their employment.
2. The Good Work Plan will also introduce a requirement for employers to issue a similar written statement of terms to workers from day one of their engagement. Currently there is such requirement and workers can often be working without any written terms.
Zero Hour Contracts
3. Zero hours contracts will still be permitted – this has been a contentious subject with some political factions pressing for a ban zero hours contracts.
4. However, the Good Work Plan will give employees and workers who do variable hours a right to request a more stable working pattern after they’ve been with their employer for 26 weeks. This might mean:
- A guaranteed minimum number of hours to enable them to secure a mortgage or plan their finances.
- Fixed days of work to enable them to plan their non-working time e.g. for childcare or a second job.
It is likely that there will be a process for the employer to follow and limited grounds for refusing a request – similar to how flexible working requests are currently dealt with.
5. The Good Work Plan will clarify the definitions of “employee”, “worker” and “self-employed” and ensure greater consistency between the tests used by HMRC and the Employment Tribunals to reduce confusion and help businesses categorise their staff correctly.
6. The Good Work Plan will make it harder to break continuous service. At the moment, if an employee stops working for you and there is no expectation that they will come back, their continuous service will be broken unless they come back to you within a week. This mean that if you let them go because you had no work for them, but then you find some more work for them two weeks later, their continuous service would drop back to zero. The intention is to amend this so that if the employee comes back within four weeks their continuous service will be preserved.
7. The government plans to start an awareness campaign to make sure that employers and staff know that holiday pay must be calculated on the basis of average pay – including payments such as shift allowances, overtime and commission.
8. The Good Work Plan will stipulate that (for the purposes of holiday pay), average pay should be calculated over a 52 week reference period. Until now, many employers have been making the calculation over a 12 week reference period (which is in keeping with the Employment Rights Act 1996). It is therefore likely that many employers will need to amend their processes.
9. HMRC will continue the tough approach to enforcement of National Minimum Wage and extend the same approach to enforcement of holiday pay.
10. The Good Work Plan will ban employers from keeping tips intended for their staff.
All of the above will need to be embodied in new legislation and so employers have time to make any changes they need to. But, it might be worth thinking about changes now in order to be prepared.
As always, if you would like any further advice or assistance with the implementatin of any changes needed, call the New Dawn Resources team on 01484 680098 or contact us via the website and we will be happy to help.