Is ‘The Good Work Plan’ good news for those on zero-hour contracts?

Definition of flexible work on sheetThe UK government is planning to make some significant changes to employment law with the aim of offering more stability and working rights to those in flexible jobs and zero-hour contracts, but do the recommendations go far enough? In what’s being called the largest upgrade to workers’ rights in over twenty years, The Good Work Plan has been developed to give ‘atypical’ workers, such as those on flexible contracts, temporary roles, and zero-hour contracts, more rights and protections.

Happy employees in an officeWhat’s in The Good Work Plan

The changes have come about as a result of an independent review into modern working practices by Matthew Taylor, chief executive of the Royal Society of Arts. Given the rise in flexible jobs, the gig economy and zero-hour contracts, the Taylor review highlighted several recommendations for changes to the laws regarding self-employment. And while there is no timeline as yet for the changes, the main focus of The Good Work Plan is to create legislation that prevents employers from misclassifying employees as self-employed. The following are the key recommendations in the report:

  • If, at an employment tribunal, an employer is deemed to have shown ‘malice, spite or gross oversight’, the maximum fine applicable should be quadrupled from £5,000 to £20,000.
  • Ensuring companies provide a ‘statement of rights’ on the first day of a person’s employment (including casual workers on flexible contracts and zero hour contracts) that details workers’ rights, as well as pay and leave entitlements (holiday pay, sick pay and maternity/paternity leave).
  • An increase from one to four weeks to the period required to break the continuity of employment, so workers’ rights continue to be accrued between contracts.
  • Holiday pay should be based on a 52 week period (currently 12 weeks), so seasonal workers are eligible for paid holidays.
  • To remove the practice known as ‘Swedish Derogation’ that allows agency staff to be paid lower rates than their permanent counterparts.
  • Those on flexible contracts or zero-hour contracts should be allowed to request a fixed working pattern after 26 weeks’ continuous service.
  • Clarify employment status tests to ‘reflect the reality of modern working relationships’.
  • Ban employers from making deductions from staff tips.

workers putting up their fists to show supportA step in the right direction

If the recommendations result in actual changes to legislation, then it should make some difference to how those in flexible jobs or zero-hour contracts are treated, but as seen with ‘Swedish Derogation’, a method by which agencies were able to bypass some of rules of the Agency Workers Regulations (AWR) in 2010, companies may be able to get round these new rules too.

By stopping short of banning zero-hour contracts altogether, as it was felt that doing so would ‘negatively impact more people than it helps’, the government has allowed employers to hold on to the one-sided flexibility offered by those types of contracts. And, ‘the right to request a working pattern’ offers no guarantee that such a request will be granted.

Eliminating the practice of Swedish Derogation should help boost the take-home pay of agency workers, but, at a time of chronic job stability, the government really needs to do more to give more workers’ rights to those on zero-hour contracts.

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