Employment law in the modern economy: The Good Work Plan

The issue of insecure work received much attention during the 2017-19 Parliament. In December 2018, the May Government published the Good Work Plan (GWP), a wide-ranging set of proposals to reform employment law. The aims are to ensure ‘decent work’, clarity for employers and workers, and fair enforcement. The Labour Party criticised the plan as insufficient, introducing a host of its own proposals in its 2019 manifesto.

What is the Good Work Plan?

The Taylor Review of Modern Working Practices, published in July 2017, made proposals aimed at ensuring employment law was keeping pace with business practices in the modern economy. The May Government accepted 51 of the 53 recommendations. The Good Work Plan set out how the Government intended to implement them. It contains proposals to legislate on a range of issues, from employment status and zero-hours contracts to transparency and the enforcement of employment rights. The Government labelled the proposals “the largest upgrade of workers’ rights in a generation.”

Implementation of the Good Work Plan

The May Government passed secondary legislation to implement a number of the proposals in the GWP. This included legislation extending to workers the right to receive payslips, as well as the right to receive a statement of employment rights. It also passed legislation to abolish the ‘Swedish Derogation’, a rule that excludes agency workers from the right to equal pay with directly hired staff, if their agency pays them at a minimum level between contracts. Much of this legislation comes into effect on 6 April 2020.

In the 2019 Queen’s Speech, the Johnson Government announced legislation banning employers from making deductions from staff tips and committed itself to continue implementing the GWP.

The Resolution Foundation has estimated that between 824,000 and 950,000 people were employed as agency workers in 2018.

Good Work Plan consultations

The May Government also launched five consultations on the GWP. Some of the main proposals consulted on included:

• Extending existing protections from discrimination and redundancy, which apply to women during pregnancy and maternity leave, to a period of six months after they return to work
• Giving workers a right to receive notice of work shifts and compensation in cases of late shift cancellations
• Creating a Single Enforcement Body for employment rights and extending state enforcement to cover holiday pay, sick pay and the regulation of umbrella companies
• Extending sick pay to workers earning under the lower earnings limit (currently £118 per week) and allowing it to be taken flexibly during a phased return to work
• A high-level assessment of the policy objectives underpinning family-related leave and different options for implementing them in practice

The May Government responded to the consultation on pregnancy and maternity discrimination, accepting the need for extending the period during which protections apply. Responses to the remaining four consultations have yet to be published.

What happened to employment status?

One of the key commitments in the GWP was a promise to legislate on employment status.

The range of statutory employment rights that a person enjoys depends on their employment status. There are currently three types: employee, worker and self-employed. While basic definitions of ‘employee’ and ‘worker’ are contained in legislation, detailed tests are set out in case law. Many recent cases have been concerned with whether people working in the ‘gig economy’ are workers or self-employed.

Estimates of the number of people who are employed in the gig economy in the UK vary considerably – from 1.1 million according to RSA and Ipsos MORI research to 4.7 million according to TUC research.

The Taylor Review concluded that the current system was unclear. It recommended new tests be set out in primary legislation, supplemented by detailed rules contained in secondary legislation. It also recommended that ‘workers’ should be renamed ‘dependent contractors’, with greater focus being paid to the control exercised over them by employers. The Government consulted on employment status in February 2018 and committed itself in the GWP to bringing forward this legislation.

To date, no legislation or further consultation has been published. An appeal in Uber v Aslam, one of the key employment status cases, is due to be heard by the Supreme Court in July 2020.

2019 party manifestos

In a House of Commons debate in December 2018, Rebecca Long-Bailey, the Shadow Business Secretary, said there were “small victories” in the GWP. However, she also quoted the TUC as saying the “reforms as a whole won’t shift the balance of power in the gig economy.”

The 2019 Labour manifesto contained a range of commitments aimed at tackling insecure work. These include:

• Introducing a new employment status test with only two types: worker and self-employed
• Giving all workers “full rights” from their first day on the job
• Banning zero-hours contracts and requiring cancelled shifts to be paid
• Introducing sectoral collective bargaining
• Creating a Ministry for Employment Rights, a Workers’ Protection Agency to oversee state enforcement and new Labour Courts
• Doubling paternity leave to four weeks and extending maternity pay to 12 months

Commitments in the 2019 Liberal Democrat manifesto broadly reflected many of the key recommendations in the Taylor Review.

Further Reading

• Zero-hours contracts: rights, reviews and policy responses, House of Commons Library
• Employment Status, House of Commons Library
• Atypical approaches: options to support workers with insecure incomes, Resolution Foundation
• From rights to reality, Resolution Foundation
• Rolling out the Manifesto for Labour Law, Institute of Employment Rights (paywall)