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Tuesday, 19 March

Swedish Derogation Repealed In Huge Worker Rights Shake-up

The government has closed legal a loophole by repealing the Swedish derogation – which currently allows agency workers to be employed on cheaper rates than permanent counterparts

New legislation to upgrade workers’ rights was introduced on December 17 with the government setting out what it claims to be 'the biggest package of workplace reforms for over twenty years'.

The legislation and other measures were unveiled by Business Secretary Greg Clark, who says they will ensure workers can access fair and decent work. "They will provide and give businesses greater clarity on their obligations and ensure the enforcement system is fair and fit for purpose," he said.

 

The new legislation will:

  • Close a loophole by repealing the Swedish derogation – which currently allows agency workers to be employed on cheaper rates than permanent counterparts.
  • Extend the right to a day one written statement of rights to workers, going further to include detail on rights such as eligibility for sick leave and pay and details of other types of paid leave, such as maternity and paternity leave.
  • Quadruple maximum employment tribunal fines for employers who are demonstrated to have shown malice, spite or gross oversight from £5,000 to £20,000.
  • Extend the holiday pay reference period from 12 to 52 weeks, ensuring those in seasonal or atypical roles get the paid time off they are entitled to.
  • Lower the threshold required for a request to set up Information and Consultation arrangements from 10% to 2%.

The government is also committing to legislate to improve the clarity of the employment status tests to reflect the reality of the modern working relationships.

 

Modern Working Practices

The announcement takes forward 51 of the 53 recommendations made by the Taylor report in to Modern Working Practices and claims to make the UK the first country in the world to address the opportunities and challenges of the gig economy and the changing world of work - and its impact on a modern economy.

 

Industrial Strategy

Greg Clark said: "The UK has a labour market has been underpinned by policies and employment law which strikes an effective balance between flexibility and worker protections. But the world of work is changing, bringing new opportunities and new business models With new opportunity also comes new challenges and that is why the government asked Matthew Taylor to carry out a review to ensure the UK continues to lead the world, through our modern Industrial Strategy, in supporting innovative businesses whilst ensuring workers have the rights they deserve."

 

Labour Market Strategy

Clark continued: "As part of our major reforms to upgrade workers rights and improve the quality of work the government is also today responding to the Labour Market Strategy set out by Sir David Metcalf, the Director of Labour Market Enforcement, with detailed plans to tackle exploitation of low paid workers, including:

  • Bringing forward proposals in early 2019 for a single enforcement body to ensure vulnerable workers are better protected.
  • More resource for the Employment Agency Standards Inspectorate.
  • Creating new powers to impose penalties for employers who breach employment agency legislation such as non-payment of wages.
  • Consulting on Salaried Hours Work and Salary Sacrifice Schemes to ensure National Minimum Wage rules do not inadvertently penalise employers.
  • Bringing forward legislation to enforce holiday pay for vulnerable workers.
  • Consulting on the recommendations on non-compliance in supply chains.

Sir David Metcalf said: "I am pleased that the vast majority of my 37 recommendations have been accepted, including my recommendations regarding a shift to more proactive enforcement and improving joint working between the 3 enforcement bodies under my remit and wider organisations within labour market enforcement.

 

 

Good Work Plan

  • Ensuring tips left for workers go to them in full.
  • Ensuring workers are paid fairly by providing agency workers with a Key Facts Page when they start work, including a clear breakdown of who pays them and any costs or charges deducted from their wages.
  • Enforcing vulnerable workers’ holiday pay for the first time.
  • Including as part of the day-one rights notification of holiday and sick pay entitlements and a new right to a payslip for all workers, including casual and zero-hour workers.
  • Introducing a right for all workers, not just zero-hour and agency, to request a more predictable and stable contract, providing more financial security for those on flexible contracts.
  • Revising the Gangmasters and Labour Abuse Authority licensing standards to ensure that they reflect current worker rights and employer obligations.
  • Introducing a new naming and shaming scheme for employers who fail to pay employment tribunal awards.
  • Taking further action to ensure unpaid interns are not doing the job of a worker.

The government is also looking at the Low Pay Commission’s concern of ‘one-sided flexibility’, which the Taylor Review described as the issue where some businesses have transferred too much business risk to the individual.

 

Gig

In his review, Matthew said that banning zero hours contracts in their totality would have a negative mpact on more people than it helped and that the flexibility of ‘gig working’ is not incompatible with ensuring atypical workers have access to employment and social security protections.

Picture: The government has closed legal a loophole by repealing the Swedish derogation – which currently allows agency workers to be employed on cheaper rates than permanent counterparts.

Article written by Brian Shillibeer

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