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Government proposes workplace reform

18 December 2018

The government has announced its intention to introduce a number of legislative changes designed to implement many of the recommendations made by the Taylor Review; the report into employment and modern day working practices published in July last year. The reforms increase protection for agency employees, those working in the ‘gig economy’ or those workers engaged on zero-hour contracts.

Businesses will be required to provide a ‘statement of rights’ to a worker on their first day of employment. This statement must detail the worker’s eligibility for paid leave, such as sick leave, maternity and paternity leave. A worker will also have a statutory right to request more predictable hours if they have worked non-fixed hours for a business for 26 weeks.

Further changes include the removal of a loophole known as the ‘Swedish derogation’ which enables agency staff to be paid less than permanent employees, and there will also be an increase to the maximum financial penalty that an employment tribunal can impose on an employer found to have shown malice, spite or gross oversight (from £5,000 to £20,000).

Of particular significance is the proposed amendment as to how holiday pay is calculated for those in atypical roles, such as zero-hour or seasonal contracts.  At present the holiday pay of an individual who works fluctuating hours is calculated by taking an average of the total number of hours worked in the preceding 12 week period. Under the new legislation, this calculation period will be extended to 52 weeks. The period required to break continuity of employment between contracts will also change increasing from one week to four.

The proposals, expected to come into effect April 2020, are published within the government’s ‘The Good Work Plan’. There is no stipulated timetable for their introduction but the government does confirm its intention to legislate a test for employment status. However it is difficult to see how this could provide any greater certainty of outcome than the case law tests currently applied by the courts.

As always, if you need commercial and pragmatic employment law advice, we’re here to help so please get in touch.

Matthew heads our employment law team. He handles the full range of contentious and non-contentious employment law issues for clients which include multi-national companies, owner-managed businesses and not-for-profit organisations. He is recommended by independent legal directory Chambers and Partners in which he has been described by a client as “responsive, commercial, understands where employers are coming from and gets right to the point, with meaningful and practical advice.” 

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Matthew Clayton MA LLM (Cantab), CIPP/E
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