Following publication of the government's policy paper, the 'Good Work Plan', a number of significant employment law reforms are due to take effect in April 2020. Whilst employers are currently facing unprecedented workplace challenges because of the coronavirus pandemic, they should nevertheless remain alert to how their businesses may be impacted by these reforms.
Abolition of the 'Swedish Derogation'
From 6 April 2020, the so-called 'Swedish derogation' will be removed by the Agency Workers (Amendment) Regulations 2019.
What is the Swedish derogation?
The Swedish derogation currently allows temporary work agencies to opt-out from the right to pay-related equal treatment in scenarios where its agency workers are given a permanent contract of employment and are paid between assignments. Following its repeal, agency workers will be entitled to the right to pay parity after 12 weeks.
What does this mean for agency workers?
Agency workers with a Swedish derogation provision must be given a written statement by their agency notifying them that, from 6 April 2020, they are entitled to pay parity under the Agency Workers Regulations. This written statement must be provided by 30 April 2020.
What does this mean for employers?
Where appropriate, impacted employers will need to consider how to structure any continued engagement with relevant agency workers, for example, by transferring them onto standard agency contracts or by recruiting them directly.
Key Information Document for agency workers
From 6 April 2020, employment agencies will be required to provide new agency workers with a document known as a ‘key information document’. This document is intended to help agency workers make informed decisions about whether to take on the work and, as such, it must be provided prior to workers agreeing employment terms or starting any work. The obligation will apply even in circumstances where a worker has validly opted-out of the other provisions of the Conduct of Employment Agencies and Employment Businesses Regulations.
- What information must the document contain?
- The type of contract the worker will be engaged under;
- The exact rate of pay the worker will be given or, where unknown, the minimum expected rate of pay;
- How often the worker will be paid and by whom;
- A list of any statutory/non-statutory deductions made to the worker's pay;
- A list of any non-monetary benefits to which the worker may be entitled; and
- Any leave entitlement to which the worker would be entitled and the details of holiday pay.
- Who will enforce the new information requirements and what are the penalties for non-compliance?
This requirement will be enforced by the Employment Agency Standards Inspectorate. There are no specified penalties for incidents of non-compliance, although we expect compliance failures will result in damage to the organisation's reputation and brand.
Written Statement of Employment Particulars
From 6 April 2020, the rules requiring employers to provide staff with a written statement of employment particulars are changing in three important ways. These changes are intended to ensure that employers, employees and workers have the clarity they need to understand their employment relationships.
- How are the requirements going to change?
- Organisations will now have to provide written particulars to all workers, as well as employees. The current entitlement only extends to employees.
- The entitlement to written particulars will become a "day one right". This means that an employee/worker must be provided with the relevant information no later than their first day of work. The current one-month minimum service requirement will be abolished.
- Further to the current prescribed information, the written particulars will need to contain additional information, including:
a) The hours and days of the week the worker/employee is required to work;
b) Whether these hours may be subject to variation;
c) Any entitlements to paid leave (e.g. maternity/paternity leave);
d) Any additional remuneration/benefits available;
e) Details of any probationary period; and
f) Details of any training provided by the employer.
- What does this mean for employers?
Organisations will need to ensure they have adequate systems in place to identify workers, especially in the early engagement stage of the employment relationship, to ensure that a written statement of employment particulars is provided by the "day one" deadline.
Holiday Pay
From 6 April 2020, the reference period for determining an average week's pay (for the purposes of calculating holiday pay) will be increased from 12 weeks to 52 weeks. This change is intended to ensure that workers, whose pay fluctuates significantly over the course of the year, are not disadvantaged by having to take their holiday at a quiet time of the year when their weekly pay might be lower.
What does this mean for employers?
Employers should review their current approach to holiday pay calculation and identity any changes required.
Information and Consultation
At present, employees can trigger a formal information and consultation request under the ICE Regulations if at least 10% of the workforce make the request.
From 6 April 2020, the proportion of employees needed to trigger such a consultation will decrease from 10% to 2% of the overall workforce (subject to a minimum of 15 employees).