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Employment rights consultations

22 March 2018

Alongside its Good Work document (a response to the Taylor Review of Modern Working Practices), the Government published three employment rights consultation documents.

Measures to increase transparency in the UK labour market

The Department of Business, Energy and Industrial Strategy (BEIS), has accepted some of the proposals on transparency from the Taylor review and is consulting as follows: 

  • Extending the right to a written statement to ‘dependent contractors’ [worker status rather than full employees] – consulting on how to implement this proposal
  • Extending the period [currently one week] that counts as a ‘break in service’ for continuous service purposes – consulting on how much longer the ‘break in service’ period should be
  • Increasing awareness of holiday pay entitlements – BEIS will implement
  • Extending the holiday pay reference period [for calculating a week’s pay] for workers without normal working hours from 12 to 52 weeks – consulting on whether a 52 week period is appropriate
  • Allowing ‘dependent contractors’ [worker status rather than full employees] to receive their holiday pay flexibly – as ‘rolled up’ holiday pay has been found to be illegal - BEIS is consulting on other ways for workers to take holiday pay flexibly
  • Introducing a right to request a direct contract of employment and an obligation for the hirer to consider it ‘reasonably’ where an agency worker has been working for the same hirer for 12 months or more or on a zero hours contracts with the same business for 12 months or more – here the consultation is on how to ensure all individuals (not just agency and zero hours workers) have a right to request “predictable and stable contracts”.

The consultation runs until 23 May 2018 and you can read the full proposals here.

Enforcement of employment rights recommendations

The Taylor Report recommended seven areas where employment rights should have new enforcement support. The Government is consulting on how to implement these recommendations as follows: 

  • Enforcing holiday pay compliance – consulting on how HMRC can add this to its existing remit of enforcing the rules on payment of national minimum/living wages and sick pay
  • Enforcement action where employers do not honour tribunal awards – consulting on the most effective way to implement a naming and shaming regime for non-compliant employers 
  • Making it an obligation for employment tribunals to consider applying aggravated breach/cost orders for repeat employer offenders and allowing tribunals to uplift compensation awards if there are subsequent breaches by an employer – consulting on simplifying the process for enforcement of employment tribunals rulings including increasing the aggravated breach penalty limit to at least £20,000
  • The Government will take responsibility for enforcing a basic set of core rights for vulnerable workers – requesting information to help determine the best next steps in developing this support.

There are two recommendations that the Government is not pursuing. Firstly, it is not taking forward the idea of workers being entitled to a free authoritative determination on their employment law status. As the upfront fees for bringing a claim about employment rights to an employment tribunal have been ruled to be illegal, the Government says there is no need to take this forward. 

Secondly, the Taylor report recommended that the burden of proof be reversed so that the employer has to prove the worker is not entitled to employment rights rather than each worker having to prove that they are. The Government does not wish to introduce this until some safeguards for employers are in place – for example, requiring the use of a Government online tool to reach an initial determination of employment status.

The consultation runs until 16 May 2018 and you can read the full proposals here.

Agency workers 

The Taylor Report made a number of recommendations concerning agency workers that, while preserving the flexibility of agency working, are intended to ensure that it is not “one-sided flexibility” with all the benefits going to the engager. The key points of the consultation are:

Improving the transparency of information which must be provided to work seekers (both rates of pay and who is paying) – the consultation is on how to implement greater transparency in practice

Extending the remit of the Employment Agencies Standards (EAS) Inspectorate to cover policing umbrella companies and other intermediaries in the supply chain – the consultation seeks views on how such regulation by the EAS would improve working conditions for work seekers

Repealing the legislation that allows agency workers to opt out of equal pay entitlements (the ‘Swedish Derogation’) – consultation to seek views on the proposal

Extending the remit of the EAS Inspectorate to include compliance with the Agency Worker Regulations – consultation to seek views on the proposal.

The consultation runs until 9 May 2018 and you can read the full proposals here

BDO does not advise on employment law but if you need help and advice on the tax issues arising from employment disputes or employment status issues please contact Stephanie Wilson

Employer Essentials index