The Good Work Plan – May 2019
The changing face of the labour market: implications of the Good Work Plan for the food sector
An increasing spotlight has been placed on modern working practices and how new models can work in practice. The publication last July of the report, Good Work: The Taylor review of modern working practices, included a long list of recommendations to improve working life and employment rights. This had a particular emphasis on vulnerable workers. Included were agency workers, casual workers and zero hours workers in the growing gig economy.
The Good Work Plan has now been published, following significant consultation on a number of areas from the report. It has been labelled as ‘the biggest package of workplace reforms for over 20 years’. The publication sets out the Government’s vision for the future of the UK labour market.
A number of headline commitments are made, including:
- A right for those on zero-hours or other flexible contracts to request a more stable and predictable contract.
- Making it easier for casual staff to establish continuity of employment.
- Employment status tests to be refined after further research; online employment status tool to be developed.
- Improved written statement of terms for all workers, from day one.
- Reference period for holiday pay to be 52 weeks rather than 12.
- State-led enforcement of holiday pay for vulnerable workers.
- Agency workers: abolition of Swedish Derogation; “key facts” statement regarding terms and pay.
- Lower thresholds for requesting information and consultation arrangements.
- New single state enforcement agency.
- Naming of employers who fail to pay tribunal awards.
- Increased penalty for aggravated employment law breach.
What do these commitments mean for the Food Sector?
Here we focus on the most pertinent issues for the sector, to allow you to consider the changes and plan for future reform.
Zero hours contracts and ‘one-sided flexibility’
To counteract what Taylor called ‘one-sided flexibility’, where workers remain on unsecure, atypical contracts for a long period of time, the Government will legislate to introduce a right for all workers to request a more predictable and stable contract after 26 weeks’ service. The process for this will be similar to that which is currently in place for a flexible working request.
We do not yet know the timescale for when this will come into effect. However it could be relevant for businesses who currently have numerous workers on zero-hour contracts, but regularly work consistent hours. There will not be a right to insist upon a more predictable and stable contract. It is envisaged (although not yet confirmed) that refusal of such a request will potentially have to be on the basis of one, or a number of, statutory reasons.
Continuity of employment
The use of casual workers is very common in the food industry. In particular, the fresh food sector, where seasonal produce results in a varying need for workers. Historically it has been difficult for casual employees to benefit from certain employment rights because of the rule that a gap of one week in employment can break continuity of employment.
Again, to try and redress the balance of rights, the Government will legislate to extend the gap to four weeks before continuity of employment is broken. The timescale for implementation of this is currently unknown.
Written terms for all workers
The right to be given a written statement of terms and conditions is currently only afforded to employees. This must be provided within 2 months of employment commencing. The right to a written statement of terms is being extended to workers (as well as employees) and will need to be provided on or before the first day of employment.
There are also changes to the information that must be given in the written statement – including the length of time a job is expected to last, the notice period, eligibility for sick leave and pay and all pay and benefits, amongst other things. These changes will come in to effect on 6 April 2020 so you need to ensure your standard terms include all of the necessary information and that you will be in a position to provide this information from the start of the employment relationship.
The reference period for determining an average week’s pay will change from 12 weeks to 52 weeks. This ensures that workers without a regular working pattern throughout the year are not disadvantaged by having to take their holiday at a quiet time of the year when their weekly pay might be lower. Again, given the varying working patterns in the food sector, this will likely have a cost impact on the business. This is in addition to an administration change to ensure you are using the correct calculation period. You should speak with your payroll team/provider to check whether you’re prepared for this change coming into force from 6 April 2020.
The long disputed Swedish Derogation contract is being abolished. The Government has concluded that in reality agency workers are not having gaps between assignments. The Swedish Derogation contracts are just used as a means of reducing the pay bill.
What does this mean in practical terms? Once these contracts are abolished, agency workers will have the right to pay parity after being engaged at an end user’s site for 12 weeks. These changes will come into effect from 6 April 2020. They’re likely to result in employment agencies requesting information regarding your permanent employees’ pay rates (because they will have to pay in line with this after 12 weeks at your site). It may also result in higher costs for agency staff. This is because employment agencies may seek to pass this additional cost on to your business.
Before the changes come into force, consider discussing with your suppliers what, if any impact it will have on your commercial relationship.
The Government has heralded the Good Work Plan as the “largest upgrade in a generation to workplace rights”. Although, it actually contains a number of small, discreet changes rather than a radical overhaul of employment rights. However, in a sector where a large number of zero hours workers and casual workers are engaged, the implications could be felt harder. Particularly alongside the immigration implications which are occurring as a result of Brexit.
If you would like to discuss how any of the above could affect your business, please do not hesitate to get in touch.
The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
‘Doing the right thing’ is at the heart of Freeths. Find out more about our excellent client service and the strong set of values that guide the way we work.
Talk to us
Freeths are a leading national law firm with 13 offices across the UK. If you have a query about our services or just want to find out more, why not give us a call?
Contact: 03301 001 014