The UK Good Work Plan was introduced as a response to the Taylor Review of Modern Working Practices, aiming to improve working conditions and clarify employment rights. It represented a significant reform in UK employment law, affecting both employers and employees across various sectors.
The following guide looks at the three main strands of the Good Work Plan, and how it has impacted UK employers and their legal obligations towards their workforce.
Section A: Background to the Good Work Plan
Having been invited to develop proposals to improve the working lives of UK citizens, an independent review of modern working practices within the UK was undertaken by a panel of industry experts, headed by Matthew Taylor, the CEO of the Royal Society for the Encouragement of Arts, Manufactures and Commerce.
In particular, the panel examined how employers can benefit from new technologies and emerging business models, whilst ensuring the protection of workers’ rights in the UK.
The Good Work Plan was the Government’s response to the Taylor review, constituting “its vision for the future of the UK labour market.”
Following various consultations launched by the Government as to how to approach the issue of implementation of some of the 53 recommendations made by the panel, the Good Work Plan also set out how the Government proposed to put many of these recommendations into practice.
Within the Good Work Plan, the Government committed to a wide range of policy and legislative changes, not least to ensure that workers in the UK could access fair and decent work, that both employers and workers have the clarity they need to understand their employment relationships, and that the enforcement system for non-compliance is fair and fit for purpose.
The overall aim of the plan was to strengthen employment rights and improve working lives within the UK. As such, the proposed reforms impacted all UK employers, regardless of the size or nature of the business, or the number of workers employed.
In December 2018 the Government published a number of employment law reforms that it planned to introduce as part of the “Good Work Plan”. Many of these proposals come into force on 6 April 2020.
Section B: Key Provisions of the Good Work Plan
There are 3 main strands within the Good Work Plan:
1. Fair and Decent Work
The first section of the Good Work Plan is intended to reflect the government’s commitment that fair and decent work should be available to all, in particular by improving the rights of intermittent and atypical workers.
As such, one of the main proposals under the plan included the right for those working variable hours to request a more predictable and stable contract. This was a brand new right to enable individuals on casual or zero-hour contracts with more than 26 weeks continuous employment to request a guaranteed minimum number of hours, as well as some certainty as to the days on which they will be required to work.
This right sought to operate in a similar way to the existing right to request flexible working. In other words, even though the right is simply to request a more predictable and stable contract, with no automatic right to be granted this request, the employer must still handle the matter in a reasonable manner otherwise risk being taken to an employment tribunal.
Under the proposed changes, a more lenient approach was also to be taken to any break in continuous service. Under the previous law, a gap of just a week can break an individual’s continuity of service, such that that person may never build up any significant length of service despite working regularly for the same employer on and off, for several months or even years.
However, under the proposed changes, the period required to break an individual’s continuity of service was to be extended from one week to four weeks, thereby helping those who work on a sporadic or casual basis to qualify for greater employment rights. These greater rights included, for example, the right not to be unfairly dismissed which required an employee to have worked continuously for the same employer for a period of not less than 2 years.
Other proposals for fair and decent work included greater protection for agency workers – the removal of the opt-out provision after 12 weeks for agency workers to get a guaranteed level of pay in exchange for the same level of pay as a permanent worker, will ensure these workers receive equal pay. In addition, the right to be involved in workplace discussions – a reduction in the threshold required for a request to set up collective information and consultation arrangements from 10% to 2% of the workforce, was to give employees a greater voice in the workplace in relation to redundancy.
2. Clarity for Employers and Workers
The second section of the Good Work Plan reflected the government’s commitment to bring about greater clarity in the law and within employment relationships, with much of the focus on improving communication and certainty within the working relationship for both employers and workers alike.
One of the key proposals was the right of workers to receive a written statement of particulars containing the main terms and conditions of their employment. Under the previous law, only employees are entitled to receive a written document setting out their basic terms, for example, relating to pay, hours and place of work. By extending this right to workers, this sought to bring clarity for many individuals regarding their contractual rights and obligations.
Further, employers previously had a period of two months in which to provide a written statement of particulars to employees, but this was to change so that the document must be provided on day one. In this way, the parties could be clear from the outset as to the basis of their working relationship, and was to apply to both workers and employees.
The information to be included in the written statement was also expanded, requiring an employer to provide the following information to new starters on or before the first day of employment:
a. Name of Employer and Employee: The full legal names of both the employer and the employee.
b. Job Title and Description: The employee’s job title or a brief description of the work they are employed to do.
c. Start Date: The date on which the employee’s employment begins.
d. Place of Work: The location where the employee will work. If the employee is required to work at multiple locations, this should be specified.
e. Pay Details: Information about the employee’s pay, including how much they will be paid, how often (e.g., weekly or monthly), and the method of payment.
f. Working Hours: The employee’s normal working hours, including the days of the week they are expected to work, and whether their working hours may be variable.
g. Holiday Entitlement: The employee’s entitlement to paid holiday, including how it is calculated and the conditions for taking holiday.
h. Sick Pay: Details of any sick pay entitlement, including statutory sick pay (SSP) and any company sick pay schemes.
i. Pension: Information about pension schemes, including whether the employee will be automatically enrolled in a workplace pension scheme.
j. Notice Period: The notice period required from both the employer and the employee to terminate the employment.
k. Probationary Period: If applicable, details of any probationary period, including its length and conditions.
l. Disciplinary and Grievance Procedures: A summary of the employer’s disciplinary and grievance procedures, or a reference to where this information can be found.
m. Collective Agreements: Information about any collective agreements that directly affect the terms and conditions of employment.
n. Any Other Benefits: Details of any additional benefits provided by the employer, such as health insurance or bonuses.
o. Training: Information on any training entitlement, including whether any training is mandatory and whether it is paid for by the employer.
Employers must ensure that this information is clear, accurate, and provided in a timely manner to comply with legal requirements and to establish a clear understanding between the employer and employee from the outset.
Specifically for agency workers, the government sought to tackle the lack of transparency in their terms and conditions through the provision of a Key Facts Page. This will need to be a written document provided to each agency worker by the employment agency at the start of each assignment.
A Key Facts Page for agency workers is a mandatory document that must be provided by the employment business (the agency) before an agency worker agrees to take up a particular assignment. This document is intended to offer clarity and transparency about the terms under which the agency worker will be employed. The Key Facts Page must include the following information:
a. Identity of the Employment Business: The full name, contact details, and relevant registration information of the agency (employment business) that is offering the work.
b. Type of Contract: A clear explanation of the type of contract the agency worker will be engaged under, such as a contract of employment, a contract for services, or another arrangement.
c. Pay Details: Information on how much the agency worker will be paid.
d. Holiday Entitlement: Details of the agency worker’s holiday entitlement, including how holiday pay is calculated and the procedure for taking holidays.
e. Benefits and Deductions: Information about any benefits the agency worker may be entitled to and any other deductions that will be made from their pay, such as for accommodation or transport.
f. Additional Benefits Provided by the Agency: Any additional benefits provided by the agency, such as pension contributions, training, or healthcare.
g. Illustrative Example of Pay: An example that illustrates how the worker’s pay is calculated, including typical deductions and the net amount they can expect to receive.
h. Umbrella Company Information (if applicable): If the agency worker is being paid via an umbrella company, the Key Facts Page must include details about this organisation.
i. Contractual Terms: A summary of the key contractual terms that will apply to the worker, including their rights and obligations under the contract.
j. Duration and Termination of the Contract: Information on the duration of the contract and the circumstances under which it may be terminated by either party.
In the UK it is an individual’s employment status that determines which statutory employment rights apply and how much tax they are required to pay. However, with the recent introduction of various new business models and employment practices, this has caused increasing confusion about the employment status of individuals.
In particular, it is accepted by the government that more guidance is needed for individuals to ascertain their employment status, with a test that reflects the reality of modern working relationships.
It is also accepted that having separate frameworks for determining employment rights and the payment of tax is especially confusing, where clearly legislative changes are needed to align the tests for determining status for employment and tax purposes.
Needless to say, this is a much-needed area for review, and whilst the government has committed to further align the employment tribunal assessment of employment status with that of HMRC, it remains to be seen exactly how the government will seek to address and resolve these issues.
3. Fairer Enforcement
The third section of the Good Work Plan reflected the Government’s commitment to ensuring fair enforcement when the law is broken, and furthermore, that it remained fit for purpose within the modern labour market.
In particular, in addition to the previous prospect of facing enforcement proceedings, where a penalty notice could be issued to up to 50% of the unpaid award, under the proposals employers who failed to pay a compensation award made against them in the tribunal are to be publicly named and shamed.
Other proposals for fairer enforcement of employment rights included expanding the remit of the Employment Agency Standards Inspectorate –an extension to the powers of the EAS Inspectorate here would be made to cover the enforcement of agency worker rights in relation to umbrella companies, and state enforcement for non-payment of holiday pay to assist vulnerable workers – the new legislation would 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 their behalf.
Section C: Key Dates for Implementation
The Good Work Plan introduced phased changes over these key dates to enhance workers’ rights and clarify employment status and entitlements. Employers have had to adapt their practices to comply with these new regulations.
Key dates for its implementation included:
1. 6 April 2019
a. Holiday Pay Reference Period: The reference period for calculating holiday pay changed from 12 weeks to 52 weeks. This aimed to make holiday pay calculations fairer for workers with variable hours.
b. Written Statements of Employment: The requirement to provide a written statement of particulars was extended to all workers (not just employees) and had to be provided on or before the first day of employment, rather than within the first two months.
2. 6 April 2020
a. Right to a Written Statement from Day One: Employers were required to provide all new employees and workers with a written statement of terms and conditions from the first day of employment.
b. Agency Workers: The “Swedish Derogation” (which allowed agency workers to be paid less than permanent staff in certain circumstances) was abolished. From this date, all agency workers were entitled to the same pay as permanent employees after 12 weeks.
c. Parental Bereavement Leave and Pay: Employees became entitled to two weeks of leave following the death of a child under 18, or a stillbirth after 24 weeks of pregnancy, with statutory parental bereavement pay also introduced.
d. Information on Employment Rights: Employers were required to provide workers with more detailed information on their rights, such as details on any paid leave, including maternity and paternity leave, sick leave, and other paid time off.
3. April 2021 (Proposed but delayed)
Changes to Enforcement and Penalties: Proposals included increasing the maximum penalties for aggravated breaches of employment law and introducing a single labour market enforcement body to protect workers’ rights. These changes were delayed, and the timeline for their implementation remains uncertain.
Section D: Compliance & Penalties
Failure to comply with these obligations can result in significant penalties. Employers who do not provide a written statement or who breach other provisions of the Good Work Plan may face claims from employees or workers. Employment tribunals can award compensation, which may be increased if the breach is considered aggravated. Non-compliance with agency worker regulations can lead to further legal action and financial penalties. Employers must regularly review their policies and practices to ensure they meet the requirements of the Good Work Plan and avoid these potential risks.
Section E: Summary
The Good Work Plan, introduced by the Conservative government in response to the Taylor Review of Modern Working Practices, represented a significant shift in employment law, with wide-ranging implications for employers. Its primary aim was to improve working conditions and provide greater clarity and fairness in employment relationships.
One of the key changes was the requirement for employers to provide all workers, including those on casual and zero-hours contracts, with a written statement of terms and conditions from the first day of employment.
Agency workers in particular gained additional protections under the plan, with the abolition of the Swedish Derogation, ensuring that they receive equal pay to permanent employees after 12 weeks.
For employers, these changes necessitated a review and update of contracts, policies, and practices to ensure compliance. Non-compliance can result in legal challenges and financial penalties, making it essential for employers to stay informed and proactive in implementing the new requirements.
Section F: Need Assistance?
DavidsonMorris are experienced employment law specialists, with expertise in supporting employers with strategic HR and employment legal risk management. We can provide guidance on what the Government’s latest proposals mean for your organisation, its policies, systems and workforce planning and management programmes.
If you have a question or need advice about the Good Work Plan and its implications for your organisation, contact us.
Section G: Good Work Plan FAQs
What is the Good Work Plan?
The Good Work Plan is a set of reforms introduced by the UK government to improve workers’ rights and update employment law. It was developed in response to the Taylor Review of Modern Working Practices.
Who is affected by the Good Work Plan?
The Good Work Plan affects all employers and workers in the UK. It applies to both employees and workers, including those on casual, part-time, and zero-hours contracts.
When did the Good Work Plan come into effect?
Key provisions of the Good Work Plan came into effect on 6 April 2020, with some changes implemented earlier, such as the holiday pay reference period adjustment in April 2019.
What is included in the written statement of terms?
The written statement must include essential information such as job title, pay, working hours, holiday entitlement, and any other benefits. Employers are now required to provide this statement from the first day of employment.
How has the calculation of holiday pay changed?
The reference period for calculating holiday pay has been extended from 12 weeks to 52 weeks. This change is particularly relevant for workers with irregular hours, ensuring they receive fair holiday pay based on their average earnings over the past year.
What rights do agency workers have under the Good Work Plan?
Agency workers are entitled to equal pay with permanent employees after 12 weeks of continuous work with the same employer. The Swedish Derogation, which allowed for different pay arrangements, was abolished under the Good Work Plan.
What are the consequences of non-compliance with the Good Work Plan?
Employers who fail to comply with the requirements of the Good Work Plan may face legal action and penalties. Employment tribunals can award compensation to workers if their rights have been breached, and in some cases, penalties for aggravated breaches can be increased.
Do employers need to review their existing contracts?
Employers should review and update existing contracts and policies to ensure they are compliant with the new regulations introduced by the Good Work Plan. This includes ensuring all workers receive the required written statement of terms from day one of their employment.
Section H: Glossary
| Term | Definition |
|---|---|
| Good Work Plan | A set of UK government reforms introduced to improve workers’ rights and modernise employment law, following the Taylor Review. |
| Written Statement of Terms | A document that employers are required to provide from the first day of employment, detailing key terms such as job title, pay, and working hours. |
| Holiday Pay Reference Period | The period used to calculate holiday pay, which was extended from 12 weeks to 52 weeks under the Good Work Plan, ensuring fairer calculations for workers with irregular hours. |
| Agency Workers | Individuals who work for a company on a temporary basis through an employment agency, now entitled to equal pay with permanent employees after 12 weeks. |
| Swedish Derogation | A provision that allowed agency workers to be paid less than permanent employees in certain circumstances, abolished by the Good Work Plan. |
| Employment Tribunal | A legal body that resolves disputes between employers and employees, including claims related to breaches of employment rights under the Good Work Plan. |
| Taylor Review | A review of modern working practices commissioned by the UK government, which led to the development of the Good Work Plan. |
| Employment Rights | Legal entitlements related to employment, including the right to fair pay, working conditions, and protection from unfair dismissal. |
| Equal Pay | The principle that agency workers should receive the same pay as permanent employees after 12 weeks of continuous work with the same employer. |
| Aggravated Breaches | Serious violations of employment law, where penalties can be increased if an employer is found to have acted in a particularly unfair or unlawful manner. |
| Zero-Hours Contract | A type of employment contract where the employer is not obliged to provide a minimum number of working hours, but the worker must be available to work when required. |
| Casual Workers | Individuals who work on an irregular or flexible basis, often without guaranteed hours, and who are affected by the changes introduced in the Good Work Plan. |
| Parental Bereavement Leave | A statutory entitlement introduced under the Good Work Plan, allowing employees to take leave following the death of a child or stillbirth. |
Section I: Additional Resources
UK Government – Good Work Plan
https://www.gov.uk/government/publications/good-work-plan
Official UK government page detailing the Good Work Plan, its objectives, and the changes it introduced to employment law.
ACAS – Good Work Plan Guidance
https://www.acas.org.uk/the-good-work-plan
ACAS provides practical advice for employers and employees on how to comply with the new regulations introduced by the Good Work Plan.
CIPD – Good Work Plan Overview
https://www.cipd.co.uk/knowledge/fundamentals/emp-law/legislation/good-work-plan
The Chartered Institute of Personnel and Development (CIPD) offers resources and insights into the implications of the Good Work Plan for HR professionals and employers.
Equality and Human Rights Commission – Employment Rights
https://www.equalityhumanrights.com/en/advice-and-guidance/employment-rights
Guidance from the Equality and Human Rights Commission on how the Good Work Plan affects workers’ rights, with a focus on equality and fair treatment in the workplace.
UK Government – Employment Contracts
https://www.gov.uk/employment-contracts-and-conditions
Detailed information on what must be included in employment contracts under the new rules introduced by the Good Work Plan.
Law Society – Employment Law Changes
https://www.lawsociety.org.uk/topics/employment-law/good-work-plan
Resources and legal advice for employers and employees on the changes introduced by the Good Work Plan, provided by the Law Society.
Author
Founder and Managing Director Anne Morris is a fully qualified solicitor and trusted adviser to large corporates through to SMEs, providing strategic immigration and global mobility advice to support employers with UK operations to meet their workforce needs through corporate immigration.
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