In its "Good Work Plan", published earlier this week, the government has proposed a range of changes to improve access to, and enforcement of, existing employment rights. Two of these are likely to require action on the part of employers: firstly, the government is proposing to extend the right to receive a written statement of terms (previously reserved to employees) to workers, and expand the scope of information to be covered. Going forward, the right will be a "Day 1" employment right. Most of the information to be included will already be covered under most employers' template contracts and policies. However, as and when a concrete implementation date and draft legislation emerge, we recommend that employers review their templates to ensure they comply with the updated requirements and seek advice where necessary.
Secondly, the government is increasing its focus on the enforcement of holiday pay rights. Holiday pay is a complex and thorny issue. While it has been the subject of recent case law, many employers do not operate compliant holiday pay, and most employees do not have a clear understanding of their rights. The government is seeking to address the issue by (i) launching an awareness campaign to educate employees and workers of their rights, which may involve the development of a holiday pay calculator tool, and (ii) expanding the remit of HMRC to oversee the state enforcement of holiday pay rights for vulnerable workers. Simultaneously, the government is proposing to expand the reference period for the calculation of holiday pay for workers earning variable remuneration to 52 weeks (previously 12 weeks). Increased understanding of the holiday pay rules may lead to an uptick in holiday pay claims. We therefore recommend that any employers who have not already done so review their holiday pay arrangements well in advance of any change, and seek legal advice where necessary.
Other changes in the area of enforcement focus on the powers of Employment Tribunals to punish aggravated or repeated breaches of employment legislation. Existing penalties for aggravated breach of employment legislation will be raised from £5,000 to £20,000. As these penalties are rarely used, this change is unlikely to have a great practical impact. More significantly, the government plans to introduce sanctions in relation to repeated breaches, and place an obligation on employment judges to consider the use of these sanctions in appropriate cases. Employers who are facing test cases in the courts, such as Addison Lee and other "gig economy" employers, will need to react very quickly to any adverse judgement in order to avert sanctions for repeated breaches in connection with follow-on claims.
Co-Authored by Hannah Disselbeck