Following the Taylor Report on modern working practices the Government published its Good Work Plan. This had a number of commitments aimed particularly at improving the lives of vulnerable workers and those in the growing gig economy.  See Freeths article The Good Work Plan – A Vision for the Future for more details.

Some of the Government’s commitments remain promises for the future – however, legislation has now been published to bring various aspects of the Good Work Plan into force. We take a look at how these apply to the hospitality sector to allow you to make plans for your business.

Itemised payslips

From 6th April 2019 all workers have been entitled to receive a payslip.  The payslip must show the number of hours where the pay varies according to the number of hours worked – for example where a worker is hourly paid, or where they are salaried, but overtime is paid at an hourly rate.  You can provide a payslip in hardcopy or electronic format.

Written terms for all workers

All employees have the right to a written statement of terms and conditions, with the statement having to be provided within 2 months of their employment commencing. This is changing so that more individuals have the right to a written statement of terms – it is being extended to workers (as well as employees) and will need to be provided on or before the first day of employment.

There are also changes to the information that must be given in the written statement – including the length of time a job is expected to last, the notice period, eligibility for sick leave and pay, and all pay and benefits. These changes come into effect on 6 April 2020 so it is worthwhile checking with your HR function to ensure that your standard terms include all of the necessary information and that you will be in a position to provide this information from the start of the employment relationship.

Holiday Pay

From April 2020 the reference period for determining an average week’s pay will change from 12 weeks to 52 weeks. This will ensure that workers who do not have a regular working pattern throughout 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.

Again, given the often varying working patterns of workers in the hospitality sector, this is likely to have a cost impact on the business, as well as an administration change required to ensure you are using the correct calculation period. Speak with your payroll team/provider to check whether you are prepared for this change before it comes into force next April.

Agency Workers

The long disputed Swedish Derogation contract is being abolished. This currently allows agency workers to opt out of equal pay entitlements, effectively enabling employers to pay agency workers less than their own permanent staff. The Government has concluded that in reality agency workers contracts are just used as a means of reducing the pay bill.

Once these contracts are abolished, agency workers will have the right to the same pay as your own staff once they have been working for your business for 12 weeks. These changes will come into effect from 6 April 2020 and are likely to result in employment agencies requesting information regarding your permanent employees’ pay rates (because they will have to pay in line with this after 12 weeks at your site).

It may also result in you seeing a higher cost for agency staff as employment agencies may seek to pass this additional cost on to your business. Therefore consider having a discussion with these businesses before the changes arrive to see what, if any, impact it will have on your commercial relationship.

What’s still to come?

Although the Government has heralded the Good Work Plan as the “largest upgrade in a generation to workplace rights”, it actually contains a number of small, discreet changes rather than a radical overhaul of employment rights. However, in a sector where a large number of zero hours workers and casual workers are engaged, the implications could be felt harder, particularly alongside the immigration changes which are occurring as a result of Brexit.

Additional promises in the Good Work Plan which are still to be legislated include:

  • Zero hours contracts

The right for a zero hours worker to request a more stable contract after 26 weeks of working for you. The process for this will be similar to that which is currently in place for a flexible working request.  There is not yet a timescale for this to come into effect, but it could be relevant for businesses who currently have a number of workers on zero hours contracts but who regularly work consistent hours. There will not be a right to insist upon a more predictable and stable contract and it is envisaged (although not yet confirmed) that refusal of such a request will potentially have to be on the basis of one, or a number of statutory reasons.

  • Continuity of employment

Historically it has been difficult for casual employees to ascertain certain employment rights because of the rule that a gap of one week in employment can break continuity of employment. To redress the balance, the Government will legislate to extend this gap to four weeks before continuity of employment is broken. Again, the timescale for implementation of this is currently unknown.

  • Employment status

Crucially we also await legislation promised to improve the clarity of the employment status tests aimed particularly at protecting those working in the gig economy.  There are no current proposals as to how this is to be achieved.