The Government’s Good Work Plan: what you need to know

This article from our partners Taylor Vinters talks about the effort the law is making to catch up with the growth of the gig economy, including the ‘good work plan’ key proposals and potential impact.

The law is making some effort to catch up with the growth of the gig economy, but progress is slow and, to date, it is struggling to make all the necessary running. The trend in the courts and tribunals on “employment” and “worker” status issues is about as clear as one can be, especially once the nuances of the different platforms are taken into account, in an area of law which is generally so fact specific. Nevertheless, they are moving towards recognising the worker status of individuals in the gig economy. The caveat, however, to that conclusion is the pace of the UK’s litigation system is – frankly – glacial compared to evolving tech platforms.

Matthew Taylor, in his report on working practices in Britain, recognised that Parliament needed to intervene to ensure that the future of work was good for everyone. He suggested a wide range of reforms, including guidance on employment status and changes to enforcement mechanisms.

This has led to the Government publishing the “Good Work Plan” – a detailed report which sets out how it intends to plug gaps in the overall employment law regime.

Here we outline the plan’s key proposals and their potential impact:

1.  Legislation to “improve the clarity of the employment status tests”. However, the plan stops short of promising a new statutory definition of “dependent contractor” as Taylor recommended in his report, so it remains to be seen whether new legislation introduces this, or any, new statutory definition.

2.  Zero hours contract workers will have the right to request “a more stable and predictable” contract after six months’ service. Note this is only a right to ask, so this may not bring a fundamental shift in improving certainty for those stuck on long-term zero hours arrangements.

3.  A written statement of employment rights will be a day one right for both employees and workers. Currently, employers have two months to produce a written statement and the right only applies to employees. To be useful in practice, this is of course dependent on whether the employer recognises an individual as a worker in the first place.

4.  The holiday pay reference period will be extended from 12 weeks to 52 weeks to smooth out the peaks and troughs of the level of “normal remuneration” (e.g. overtime and commission) so that individuals can take rest periods when they wish.

5.  There will be harsher penalties in the employment tribunals for employers who flout the rules. Guidance will encourage judges to use their powers to impose aggravated breach penalties on employers and the maximum penalty will be raised from £5,000 to £20,000. Further sanctions will be introduced for repeat offenders and judges will, by law, be required to consider in every case whether such a penalty should be imposed on an employer.

It remains to be seen whether these measures will work as intended. The Government is moving in the right direction but unanswered questions remain. And as yet, it is difficult to see how the proposals will help an individual claimant win their case and secure an award if an employer is adamant they are operating in accordance with their legal obligations and are intent on defending litigation.

For further insights and views on the future of work, please visit https://thezebraproject.co/. This is an initiative set up by Taylor Vinters to support and guide other entrepreneurial firms seeking to manage both the opportunities and challenges that the ever-changing world of work presents.

If this impacts your business and you want to speak about your strategic hr please get in touch at [email protected]