BREAKING NEWS: Government Releases its Good Work Plan and Commits to “largest upgrade in a generation to workplace rights”!

The Good Work Plan (“the Plan”) has been released by the Government along with a press release.   In the Plan, the Government has formally confirmed that the Swedish Derogation will be removed and it has announced some other important changes for recruitment businesses as well.     

The Government commits to a wide range of policy and legal changes in the Plan.  This raises a number of questions for Employers, including what are the key changes, how will these affect your current recruitment suppliers and what should you be doing? Here are some headline details.

What are the Changes?

The Government’s Plan and the accompanying press release can be found here:  https://www.gov.uk/government/news/largest-upgrade-in-a-generation-to-workplace-rights-getting-work-right-for-british-workers-and-businesses

The Government’s latest response to Matthew Taylor’s review of the impact of modern working practices, and another recent review commits to building a fairer economy for everyone.  This includes the following commitments:

• repealing the Swedish Derogation; 

[The Swedish Derogation is an exemption provided for under the Agency Workers Regulations 2010, which means that an agency worker is not entitled to equal pay (in comparison to comparable employees at the end client) after a 12 week qualifying period on assignment so long as certain conditions are met by the employer]

• that tips left for workers go to them in full;
• extend the holiday pay reference period from 12 to 52 weeks, ensuring those in seasonal or atypical roles get the paid time off they are entitled to;
• that workers are paid fairly by providing agency workers with a key facts page when they start work, including a clear breakdown of who pays them, and any costs or charges deducted from their wages;
• enforcing vulnerable workers’ holiday pay for the first time;
• introducing a list of day one rights including holiday and sick pay entitlements and a new right to a payslip for all workers, including casual and zero-hour workers;
• introducing a right for all workers, not just zero-hour and agency, to request a more predictable and stable contract;
• the Secretary of State for Business, Energy and Industrial Strategy takes on a new responsibility of ensuring “quality of work”;
• revising the GLAA’s licensing standards to ensure that they reflect current worker rights and employer obligations;
• taking further action to ensure unpaid interns are not doing the job of a worker;
• quadruple maximum employment tribunal fines for employers who are demonstrated to have shown malice, spite or gross oversight from £5,000 to £20,000 and introducing a new naming scheme for employers who fail to pay employment tribunal awards; and
• to lower the threshold required for a request to set up Information and Consultation arrangements from 10% to 2%.

Does some of that sound familiar?  Well, you may remember that some of these issues were previously raised in Matthew Taylor’s independent review and the Government then consulted over what action it should take in four separate resulting consultations.  The Government’s detailed response in the Plan is now available for reading and outlines the proposed next steps following the consultations.

What Should you be Doing at this Stage?

The changes will no doubt raise a number of concerns for both recruiters and employers.  For example, the removal of the Swedish Derogation is likely to lead to many having to re-visit their terms and pay rates, which is always difficult to manage and needs careful consideration.   There are other legal issues to consider as well, including how to change employee’s terms and conditions that refer to the Swedish Derogation provisions, identifying appropriate comparators in readiness for the change and more.

The gov.uk website confirms that legislation will be introduced, but there is no further detail yet as to any transition periods, guidance or enforcement of the changes concerning the Swedish Derogation. Although it’s not clear when this change will come into effect, businesses would be wise to begin considering and agreeing a strategy for dealing with them when they do become effective, particularly those who currently use the Swedish Derogation model.

If you are considering reviewing your recruitment suppliers, or just want a general discussion to clarify if and how these changes could impact your business, feel free to contact Kevin Maughan at Kelburn Recruitment on kevin@kelburn.com