What next for the gig economy? The Good Work Plan

The Government published its Good Work Plan on 17 December 2018 which it hailed as the “largest upgrade in a generation to workplace rights”. This is its latest response to the Taylor Review following four consultations earlier this year. The aim is to redress one-sided flexibility, take into account new business models and technological advances and provide clarity for workers and employers. Good Work received a lot of press interest primarily because of the high profile “gig” economy employment status cases involving companies such as Uber, Deliveroo and Addison Lee and also the abuse by some employers of zero hours contracts. 

The Key Proposals:

1. Employment status

• The Government confirmed its plan to align the employment status tests for employment rights and tax so that any differences are reduced to an absolute minimum. Employment status tests should also reflect the reality of modern working relationships. It does not appear to be taking forward Taylor’s recommendation to reclassify workers as “dependent contractors” with a new status test. 
• The Government has commissioned independent research to help with supporting those with uncertain status when bringing forward the legislation.
• It is also intending to improve guidance and online tools to help people understand their status.  

2. Right to request predictable and stable contract

The Government has decided not to completely scrap zero hours contracts on the basis that the flexibility does benefit some workers. However, it will be introducing legislation to give all workers the right request a more predictable and stable contract after 26 weeks service. This is intended to give greater certainty around the number of hours or fixed days workers will be asked to work.

3. Continuous service

In order to give greater access to employment rights associated with length of service (e.g. unfair dismissal, redundancy payments) the Government is proposing to extend the gap which has the effect of breaking continuous service from one week to four weeks. 

4. Statement of rights 

From 6 April 2020, the right to a written statement will be extended to all workers, as well as employees, from day one rather than two months as is currently the case. Additional mandatory content will include how long a job is expected to last, the notice to be given by each party, eligibility for sick pay and leave, details of other paid leave (e.g. maternity leave), all remuneration (not just pay) and which specific days and times workers are required to work. 

5. Holiday pay

• From 6 April 2020, the holiday pay reference period will be extended from 12 to 52 weeks. This is to ensure those in seasonal or atypical roles get their entitlement to paid time off.
• The Government will be campaigning to raise awareness of entitlement to paid holiday to ensure all workers are benefitting from this.
• New guidance will be provided together with an updated and improved holiday entitlement calculator.
• State enforcement of vulnerable workers’ holiday pay rights will be introduced backed up by financial penalties.

6. Agency workers

• The so-called Swedish derogation will be scrapped from 6 April 2020 to end the legal loophole which enables some firms to pay agency workers less than permanent staff.
• All employment businesses will be required to provide every agency worker with a Key Facts Page which will specify the type of contract, minimum rate of pay and whether they are paid through an intermediary.

7. Information and consultation

• From 6 April 2020 the threshold required to set up Information and Consultation arrangements will be lowered from 10% to 2%. 

8. Tips

Employers will be banned from making deductions from staff tips. 

9. Enforcement

• The maximum employment tribunal fine for aggravated breach will be quadrupled from £5,000 to £20,000 (from 6 April 2019).
• Employment tribunal judges will be under an obligation to consider the use of sanctions in the case of repeated breaches.    
• Employers who do not pay employment tribunal awards will be named and shamed.   

Although the Government states that Good Work takes forward 51 out of the 53 recommendations made by the Taylor Review there is still much which needs to be fleshed out. Whilst there are timeframes in place for some simpler aspects of the proposals, the more complex aspects will take more thought.  The Government recognises, for example, that it will not be simple to draft legislation clarifying employment status.  It is also not clear how the right to request a predictable and stable contract will work in practice, and it appears to be a right to request (perhaps similar to the right to request flexible working) rather than a right to have a stable contract.  As ever, the devil will be in the detail. 

For more information please contact Nick Hurley.