‘The Good Work Plan’ Changes – What You NEED To Know.
Good Work Plan
Statutory Sick Pay
The Good Work Plan
In April every year, there are usually changes to statutory rates of maternity pay, sick pay and adoption pay. However, this April, there will be a number of changes which will have a significant impact on employers and employees.
Change to Contracts of Employment
A major change will extend the entitlement to receive a statement of ‘written particulars’ (on basic employment terms and conditions) to include workers as well as employees and make it a day one right. At present, employers have two months to provide employees with their statement of terms.
However, from 6 April 2020, this will have to be provided on the first day. It is therefore important that employers have the contracts prepared in advance of the start date, but preferably at the point of offer. The information to be included is as follows:-
- how long a job is expected to last, or the end date of a fixed-term contract
- the notice to be given by employer and worker to terminate the agreement
- details of eligibility for sick leave and pay
- details of other types of paid leave e.g. maternity leave and paternity leave
- the length of any probationary period and any specific conditions
- all remuneration (not just pay) e.g. vouchers, lunch, health insurance, child care vouchers.
- the normal working hours, the days of the week the worker is required to work, and whether or not such hours or days may be variable, and if they may be how they vary or how that variation is to be determined
- details of any training entitlement given by the employer and whether any part of that training is mandatory and details of who will pay for any training;
Changes for Agency Workers
In the ‘Good work plan’, the government stated that they would close the loophole known as the ‘Swedish derogation’ in the rules governing the use of agency workers. Under this rule, agencies could opt out of equalising the pay of agency staff with the permanent workforce when they had been with the same employer for more than 12 weeks, provided they paid the agency workers between assignments. However, this will be abolished from 6 April 2020.
Changes to how pay is calculated
The ‘reference period’ for calculating holiday for employees and workers will now change from 12 weeks to 52 weeks. This is primarily aimed at those who work varied hours so that their holiday pay is calculated over the full year. The reason for this is that if their work fluctuates and they have a great six months which then declines due to a reduction in work, their holiday pay will reflect a full year as opposed to being based on only the last quarter.
Right to request for predictable and stable hours
Employees who have been with a company for 26 weeks and who work varied or flexible hours will have the right to request more ‘predictable and stable’ hours. This could include confirmation as to the number of hours or the days worked each week.
The government is also lengthening the reference period for determining an average week’s pay from 12 weeks to 52 weeks from 6 April 2020. This means that if a worker’s pay fluctuates, their pay will now be calculated on the basis of a 12-month period.
Key Facts for Agency Workers
“Key Facts” for agency workers also comes into force. This means that agency workers have the right to details such as pay, holiday entitlement, who they will be employed by, who they will be paid by and when.
Change to IR35 rules for self-employed workers
The IR35 rules prevent contractors working through a Personal Service Companies (PSC), who carry out similar work to the employees, which usually leads to a reduction in the amount of tax and NI which is paid. Initially, contractors determined whether IR35 applied to them but, in April 2017, public sector employers were tasked with making this decision. From 6 April, this responsibility applies to all private-sector employers in a tax year with:
- More than 50 employees
- Annual turnover of over £10.2 million
- A balance sheet worth over £5.1 million.
Change to leave for parents who lose a child
From 6 April 2020 employees who lose a child under the age of 18, or suffer a stillbirth from the 24th week of pregnancy have the right to two weeks’ leave as a ‘day one’ employment right. The leave, which can be taken as one block or as two one week blocks, will be paid at the same statutory rate as other family-friendly rights.
Employed parents are already entitled as a day one right to take a reasonable amount of unpaid time off to deal with emergencies involving a dependent, including dealing with a dependent’s death.
The Good Work Plan made a number of recommendations surrounding employee engagement and fair treatment, with implementation dates to be announced in the future.
Information and consultation arrangements
At present, workers have a legal right to be informed and consulted about decisions which affect them where there are 50 or more employees. Employees can request a formal agreement which sets out the process of this but this has to be requested by 15 employees or 10% whichever is greater. This will be lowered to 2% of employees but with a minimum will remain in place.
At present, the test for whether someone is an employee or worker or self-employed is focused around control, i.e. whether that person is told what hours to work, when to attend, what they should wear and the work they should do. There is also another test as to whether that person can send a substitute to perform their tasks if they are unable to. The Good Work Plan highlights that this test is rarely used and that more emphasis should be placed on control.
Modernising the Employment Tribunal System
There are recommendations that tribunals should become ‘digital and that Tribunal Bundles should be electronic in format. Likewise, there is also a recommendation that judgement obtained through tribunals should be easier to enforce when employers have to pay the compensation awarded against them. It has been proposed that penalty payments are to be awarded if payment is not made within 28 days which could be a further 50% of the original amount.
There are also plans to increase the number of additional penalties from £5,000 to £20,000 and for additional sanctions where employers are guilty of the same breaches.
The use of Umbrella Companies can sometimes cause uncertainty as to who the employer actually is. The Good Work Plan proposes to extend the remit of the Employment Standard Agency to cover umbrella companies and the ability to impose sanctions where appropriate.
We are here to help!
We appreciate that the number of changes may appear overwhelming and we are on hand to help. The most important thing is that your business remains legally compliant from the 6th April. You will have received an email from us regarding how to get your business compliant. Please fill in the form located at the bottom of this email and send it back to firstname.lastname@example.org as soon as possible.
If you cannot find this email please email email@example.com and request said form.