Government announces new UK workplace regulations

Legislation to reform workers’ rights have been introduced, including a day-one statement of rights for all workers and rules to bring agency workers’ pay into line with permanent staff pay.

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The package of new legislation and measures unveiled by Business Secretary Greg Clark MP yesterday aims to ensure workers can access fair and decent work. The government hopes the package will also provide businesses with greater clarity on their obligations around non-standard forms of employment.Mr Clark’s announcement carries forward 51 of the 53 recommendations made by Matthew Taylor in his Modern Working Practice review. The reforms aim to support the Good Work agenda set out in the Taylor Review and the government's Modern Industrial Strategy.The Taylor Review concluded that the flexibility of gig working is compatible with ensuring atypical workers have access to employment and social security protections and sought to promote genuine two-way flexibility.

What are the new worker protections?

The new legislation introduced today will:
  • close a loophole by repealing the Swedish derogation, which currently allows agency workers to be employed on cheaper rates than permanent counterparts
  • extend the right to a day one written statement of rights to workers, to include detail on rights such as eligibility for sick leave and pay and details of other types of paid leave, such as maternity and paternity leave
  • quadruple maximum employment tribunal fines for employers who are demonstrated to have shown malice, spite or gross oversight from £5,000 to £20,000
  • 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
  • lower the threshold required for a request to set up Information and Consultation arrangements from 10% to 2%.
The government is also committing to legislate to improve the clarity of the employment status tests to reflect the reality of the modern working relationships.Announcing the new protections, Business Secretary Greg Clark said: “The UK has a labour market of which we can be proud. We have the highest employment rate on record, increased participation amongst historically under-represented groups and wages growing at their fastest pace in almost a decade.“Today’s largest upgrade in workers’ rights in over a generation is a key part of building a labour market that continues to reward people for hard work, that celebrates good employers and is boosting productivity and earning potential across the UK.”

What do the reforms mean for agency workers?

Responding to the government’s new package of reforms, Recruitment & Employment Confederation chief executive Neil Carberry said: “The Taylor review set out how valuable the UK’s flexible approach to work is for workers as well as employers, and that is reflected in today’s government response. Recruiters across the country will welcome the acknowledgement that temporary and agency work is a key part of a vibrant jobs market that delivers opportunity. “Making sure workers have more knowledge of their rights at work – and greater ability to ensure flexibility works for them – is sensible.“Agencies have always been clear that the Swedish derogation should not be an excuse for poor treatment. We favoured reforming the rules to ensure those whom were being adversely affected by the model were protected. “Looking ahead, public policy must do more to reflect the fact that many people choose to work flexibly. For example, the REC asked for the apprenticeship levy to be broadened to include training for agency workers, which Taylor agreed with in his recommendations. We are therefore disappointed the government continues to drag its feet on something that could help agency workers develop and progress up the career ladder and provide added skills to employers."

Are the reforms flexible and fair?

Matthew Fell, chief UK policy director at the employers' body, the CBI, also responded to the announcement, acknowledging work that’s "flexible and fair" is essential to the success of the UK’s labour market."Companies support the Good Work agenda because there is a strong business case for it. Focusing on issues like employee engagement, fairness and inclusion boost productivity as well as being the right thing to do."The CIPD also acknowledged the legislation as a step in the right direction, Peter Cheese, chief executive of the CIPD, the professional body for HR and people development, welcomed “this ambitious range” of workplace reforms. “Work can and should be a force for good and these measures will give atypical workers, such as temporary staff and people on zero hours contracts, more rights while recognising the value of such ‘non-standard’ employment contracts to both workers and employers. 
“We particularly welcome the extension of the right to a clear and comprehensive day-one written statement of rights to all workers."

Scope for better support on personal development?

Echoing the REC's focus on developing people's skills, Mr Cheese also urged employers to ensure all workers are supported to do their jobs through training and development.“While the new reforms will go some way to improving employment rights for people on atypical working arrangements, simply changing regulation will not be a silver bullet for improving job quality more broadly.“Businesses must also take responsibility for improving the quality of work by investing in how they manage and develop people, for example by boosting training, improving job design and creating more flexible working opportunities, to ensure that all workers have the opportunity to reach their potential at work.”

New protections for gig workers and people on zero-hours contracts 

TUC General Secretary Frances O’Grady also voiced fears these latest reforms won’t shift the balance of power in the gig economy, especially for zero-hours contract workers, believing their new “right to request guaranteed working hours is no right all”.Alongside announcing the new reforms, the government also yesterday responded to the Labour Market Strategy set out by Sir David Metcalf, the Director of Labour Market Enforcement, setting out plans to protect low-paid workers, including:
  • bringing forward proposals in early 2019 for a single enforcement body and legislation to enforce holiday pay for vulnerable workers
  • more resource for the Employment Agency Standards (EAS) Inspectorate
  • creating new powers to impose penalties for employers who breach employment agency legislation like non-payment of wages
  • consulting on Salaried Hours Work and Salary Sacrifice Schemes to ensure National Minimum Wage rules do not inadvertently penalise employers
  • consulting on the recommendations on non-compliance in supply chains.
Head to our HR section for more news and insight on employment legislation.  
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