The governments Good Work Plan hopes to preserve the flexibility of work opportunities as well as protect the workers in this area. Fair work and treatment of all employees is a core value at People Solutions, so we decided to take a look at how the Good Work Plan will affect contractors.
Fairer work and lower risks for agency workers
Temporary workers are sometimes burdened with excessive risk by their employees. If a company with a team of zero-hours contractors needs to downsize, the company themselves see no repercussions. In contrast, the contractor is left without a job, and there is no legal protection for this.
Agency workers can currently opt out of equal pay in return for a contract guaranteeing payment between assignments. This was initially designed to give reassurance to people that they would earn during periods where there were gaps in work availability. However, evidence has arisen that contractors are not always benefitting from this as employees are keeping them on long term contracts without their right to equal pay. It appears that some employers are instead merely using this opt-out to reduce the size of their pay bill.
Without government action, many agency workers will continue to lose out, which is why they are seeking to ban this type of contract. The Good work plan observes that this model of one-sided flexibility allows businesses to respond to fluctuating demands, but they don’t give enough protection to the workers. These changes will hopefully enable equal wages for all long-term agency workers.
Some exciting new work arrangements are emerging as companies evolve. As a result, there have also been many recent disagreements around the employment status of the workers. The government understand that there needs to be a lot more clarity on the law and protections that covers the contractors at the start of a contract to stop problems emerging later. They admit that employment status tests have contributed to a significant lack of clarity faced by individuals and their employers. To combat this, the government intends to legislate to improve the clarity of the employment status tests and reflect the reality of modern working relationships with the development of helpful guidance and online tools to support them. Businesses should not be able to avoid their responsibilities by trying to misclassify or mislead their staff. As a worker knowing if you are self-employed and knowing what employment rights you have is critical.
If employment rights or payment is challenged, it can be difficult for contractors to get fair justice. The government are striving to overcome this by committing to the extension of state enforcement, on behalf of vulnerable workers, to underpayment of holiday pay. The government also plans to change the maximum level of penalty that Employment Tribunals can impose in instances of an aggravated breach to £20,000 in a bid to build workers trust and create a deterrent for all businesses.
Metrics for change
The Good Work Plan details an intention to legislate for contract workers to be able to request a more stable contract as well as considering changes to the following:
participation and progression
well-being, safety and security
voice and autonomy
The above metrics have been suggested by the Industrial Strategy Council (ISC) to inform how the government measures the quality of the work in the UK labour market. The ISC believes it’s in the interest of all businesses to tackle these changes and put them into practice.
The ambitious Good Work Plan looks to deliver a UK employment system which is fair, transparent and fit for the future. At People Solutions we believe, these kinds of changes will go some way in helping change the contractor landscape, giving workers the support they need, and providing an economy and labour market which works for everyone.
What is it? The national living wage is to rise by 2.2% in 2021 and will be extended to those age...Read more