The key proposals are:
Swedish derogation: The Government has confirmed that it will repeal the ‘Swedish
derogation’, which gives employers the ability to pay agency workers less
than their own workers if the agency workers have a contract of employment
with the agency.
Holiday pay: The Government intends to increase the reference period in
calculating holiday pay from 12 weeks to 12 months. It will also bring
forward legislation to implement state enforcement of holiday pay. This
will allow vulnerable workers who have not received their holiday pay
entitlement to raise a complaint and the state enforcement body to pursue
payment of arrears on the worker’s behalf, backed up by financial penalties.
Written statement of terms and conditions: The Government has said it
intends to give all workers (rather than just employees) the right to a
written statement of rights on their first day of work (rather than within
two months). It is also expanding the information required. This
will include, amongst other matters, details of eligibility for sick leave
and pay and details of other types of paid leave.
Employment status test: The Government accepts the Taylor
Review’s recommendation that there should be legislation to streamline the
employment status tests so they are the same for employment and tax purposes.
This is perhaps the most significant development but there is very little
detail on how this will be achieved. The Government also promises to do
the near impossible and legislate to ‘improve the clarity of the employment
status test”. Although before doing this it has commissioned independent
research to find out more about those with uncertain employment status, to
understand how best to support them when bringing forward legislation.
Continuous service: It will also increase from one week to four weeks the period required
to break continuous service for the purpose of accruing employment
rights. So someone who works for an employer on a casual basis once a
month may be able to build up the necessary length of service to claim unfair
dismissal and redundancy pay rights.
Zero hours contracts: The government is proposing a
right to request a fixed working pattern for those who do not have one, after
26 weeks’ service. However, many Unions have criticised this proposal to
request a more stable contract as having no teeth because it is only a right
to request – so employers are not necessarily obliged to agree to what is
Information and consultation arrangements: The threshold required to
request the set up information and consultation arrangements will reduce from
10% to 2% of employees. This may lead to more requests.
Staff tips: There will be a ban on employers making deductions from staff tips.
Strengthening the enforcement of employment tribunal awards: The Government has said it
will name and shame employers who do not pay Employment Tribunal awards. This
is being implemented now; the Department for Business, Energy and Industrial
Strategy (BEIS) announced a naming scheme on 17 December 2018. Awards
registered with BEIS on or after 18 December 2018 are in scope for naming.
The Government also indicated it will quadruple the maximum Employment
Tribunal fine for employers who are demonstrated to have shown malice, spite
or gross oversight in breaching employment rights from £5,000 to £20,000.
Importantly it will legislate to create an obligation on Employment Tribunals
to consider the use of this sanction where employers have lost a previous
case on broadly comparable facts.
Additional State enforcement: The Government will bring
forward proposals in early 2019 for a single enforcement body to ensure
vulnerable workers are better protected. There will also be greater
regulation of “umbrella” companies.