Government introduces significant workplace proposals

No Work Order

On Monday the government announced what it claimed to be the ‘biggest package of workplace reforms for 20 years’. The proposals were designed to ensure that the UK would be world leading in meeting the challenges of how different demographics approach work. According to the ELAS Group, under new rules, workers will be given details of their rights “in plain English” from the first day in a job, such as eligibility for sick leave, pay and details of other types of paid leave, such as maternity and paternity. Previously, employees could legally wait up to two months before receiving a formal contract of employment after starting their job.

The reforms also beef up the Employment Agency Standard Inspectorate and give it new powers to impose penalties on employers who breach employment laws, for example by refusing to pay wages.

According to ELAS the most important changes coming into effect are:

  • Maintaining continuity of employment will be easier – a break of up to four weeks (currently one week) between contracts will not interrupt continuity.  This will make it easier to claim longer notice periods, redundancy and unfair dismissal
  • A written contract will need to be given on day 1 of employment (currently law states that they must receive it within 2 months)
  • Legislation to make the employment status tests easier to understand and streamlined – this will mean they are the same for employment and tax purposes rather than potentially creating different results and to avoid employers mislabelling employees
  • Banning employers making deductions from staff tips – giving tips similar protection as wages
  • Increasing the penalty for employer’s breach of employment law from £5,000 to £20,000
  • Abolishing the employers’ ability to pay agency workers less than their own workers by offering pay between assignments (commonly referred to as the Swedish Derogation)

Business Secretary Greg Clark said: “Today’s largest upgrade in workers’ rights in over a generation is a key part of building a labour market that continues to reward people for hard work, that celebrates good employers and is boosting productivity and earning potential across the UK.”

However, Frances O’Grady, general secretary of the Trades Union Congress, said: “The right to request guaranteed working hours is no right all.

“Zero-hours contract workers will have no more leverage than Oliver Twist.

“Unless unions get the right to organise and bargain for workers in places like Uber and Amazon, too many working people will continue to be treated like disposable labour,” she added.

Commenting on the announcement that a written statement of rights will be mandatory from day one for all workers and will be extended to include details of eligibility for sick leave and pay, Katharine Moxham, spokesperson for Group Risk Development (GRiD) said: “This is an important first step in the journey away from uncertainty around what will happen if a worker is off sick for any length of time. A common reason people don’t buy personal income protection is because they think they won’t need it – ‘it won’t happen to me’, ‘the State will provide’, ‘my employer will look after me’ – but most don’t actually know what protection is in place for them via their employer. It’s absolutely crucial that people move beyond guesswork and assumption and have a clear idea of what they can expect from their employer if they have a period of sickness absence.

“Following this change, workers will be able to make a better informed decision on whether they need to make their own provision or whether they should lobby their employer to do more for them.”

However Ben Wardleworth, Director at VMS and agency back office specialist, Engage, points out these new reforms could cause major headaches for agency owners. “With a host of new reforms to workplace rights – such as details of rights from a worker’s first day in a role, to their eligibility for paid sick leave – this is the largest upgrade in rights we’ve seen in a generation. However, this scale of change also means firms will need to prepare for the uptick in compliance and administration if they are to avoid swingeing penalties. For example, plans for a ‘key facts’ page will require agencies to work with others in the supply chain to collate information and create a clear breakdown of who pays a worker and any costs deducted from their wages. To do this, agencies will need to have visibility throughout the entire supply chain to ensure workers are paid correctly and on time.

“Agencies are now going to be even more in the spotlight with their management systems under heavy scrutiny, which means it is more crucial than ever that all information can be accessed and is in one place,” he adds. “I’d urge companies who haven’t already done so, to exercise due diligence or consult with us around their recruitment processes, looking at ways to tighten up and improve their admin systems if they are to avoid the penalties that will accompany these rights.”

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