The Government has recently published its Good Work Plan. Hospitality businesses should be aware that there are some proposed legislative changes to “…ensure that workers can access fair and decent work, that both employers and workers have the clarity they need to understand their employment relationships and that the enforcement system is fair and fit for purpose“.

This follows the Taylor Review of modern working practices which was published in July 2017. The report made recommendations to improve working life and employment rights, particularly of vulnerable workers in the growing gig economy.  The Government published its response and launched various consultations in February 2018.   Reforms will be particularly relevant to those who employ or engage atypical workers i.e. agency workers, those on zero hours contracts, casual workers and workers in the gig economy – which is relevant to hotels, pubs, restaurants and bars.

The key planned reforms are:

Fair and decent work

  • After 26 weeks on a non-fixed pattern of work e.g. zero hours contract, a worker will have the right to request a more stable contract. Employers will need to deal with such a request in a similar way in which they respond to a request to work flexibly. They will have to do this within 3 months.
  • The time required to break a period of continuous service will rise from 1 week to 4 weeks.
  • The threshold required for a request to set up information and consultation arrangements is to be lowered from 10% to 2% of employees subject to a minimum of 15 employees. This provision will come into force in April 2020.

Clarity on status

  • Legislation to improve the clarity of the employment status tests, which will tackle the problem of employers misclassifying or misleading staff, is on the cards. The Government also intends to develop an online tool to enable workers to determine their employment status. There are no proposals as yet as to how the Government intends to achieve the desired clarity.
  • Reduction to an absolute minimum of differences in the tests for employment status in the employment and tax regimes. Again there are no current proposals as to how this will be achieved.
  • All workers (not just employees) will have the right to receive a written statement of their employment before or on the first day of employment. Additional information will be required to be included in this statement – including the length of time the job is expected to last, the notice period, eligibility for sick and other leave, any probationary period, pay and benefits and days and times of work.  These changes will come into effect in April 2020.
  • The holiday pay reference period will be extended from 12 to 52 weeks.

Enforcement

Amongst other things the Government proposes to legislate to

  • Increase the maximum penalty that an Employment Tribunal can impose, where there has been aggravating conduct by the employer, from £5,000 to £20,000.
  • Oblige Tribunals to consider the use of sanctions where an employer has lost a previous case on broadly comparable facts.

Tips and deductions

As part this plan the Government has announced that it will legislate to ban employers from making deductions from staff tips. This is to ensure that, as most employers currently do, all tips are passed on to staff whether the money has been left as cash or on a card. Legislation will give staff protection and give customers confidence that the tip will go to staff to reward good service as intended.  It has to be said that the Government consultation on tipping closed in 2016 and there is still no draft legislation or a proposed timescale for its introduction. We will keep you posted…

Comment

For all of these proposals, there is currently no draft legislation and no timescales (except where stated above).  We will have to wait and see whether the Government fulfils its commitments over time.

It is clear that in the key area of employment status more detail is needed and that the Government is currently announcing an intention to achieve its aim rather than the method by which it will seek to achieve it.  We will keep you updated on future developments.