Delays to the off-payroll working rules and business changes due to the COVID-19 crisis may have taken up the majority of your focus as a recruiter recently, but it’s vital that your business is also ready for new legislation arising from the Good Work Plan. Many of these measures will be rolled out on 6th April.
The Good Work Plan will see a number of reforms introduced to employment legislation, as the government looks to make the UK labour market “fair and decent”, offering “greater clarity” for workers and employers and help to better enforce the rules.
As a recruiter, you need to be aware of these changes and know how to prepare for them. To help you do so, in this article we’ll spell the major reforms out in simple terms and advise on the action to take.
The Swedish derogation model will be repealed
The Good Work Plan will see the ‘Swedish derogation model’ scrapped. If you’re unsure what this is, we’ll explain now. ‘Swedish derogation’ as its commonly referred to, is officially called a ‘Pay Between Assignments Contract’ that, as the name suggests, offers agency workers pay in between assignments.
It’s linked to the Agency Workers Regulations (AWR), which was rolled out in 2011 to offer greater protection to agency workers, namely by giving them the right to the same pay and treatment to their permanently employed counterparts after 12 weeks.
However, when the UK adopted this EU legislation, it made a few tweaks. By including regulations ‘10’ and ‘11’ to the AWR, agency workers engaged on a full employment contract could waive their right to equal pay in exchange for pay between assignments.
From 6th April, all agency workers will be entitled to equal pay at 12 weeks, they will no longer be able to waive this right.
How can recruiters prepare?
Recruiters should think carefully about how they plan to manage the transition away from these contracts. It goes without saying that in all of this, communication is key and will minimise any disruption.
If you haven’t already updated agency workers who hold these contracts, you should discuss this with them sooner rather than later, given the worker may need to serve a notice period. If you do not make any changes to contracts the worker will still be entitled to pay parity at 12 weeks.
Introduction of a Key Information Document
As part of the Good Work Plan, agencies will be required to provide all new work seekers with a ‘Key Information Document’ (KID) before a contract is signed. The government has said this is to ‘improve transparency of information for agency workers, particularly around pay.’
How can recruiters prepare?
You won’t need to give existing workers a KID, which should, in theory, make implementing this change simpler. However, the government has said it should be “one of the first things they (workers) receive”, so agencies need to make sure they have the processes in place to distribute them from 6th April onwards.
While the document itself doesn’t need to include specific payment details, it must demonstrate how a worker’s pay is impacted by fees and deductions, as explained below:
They must, though, clearly reflect the minimum amount an employment business expects to achieve for an agency worker (for example, not less than national minimum wage). They must also include a description of all deductions to be made to a worker’s pay. For statutory deductions (e.g. income tax), this can just be an explanation that the deduction will be made. For non-statutory deduction and fees (e.g. an umbrella company’s margin), the key information document must EITHER state the amounts to be deducted OR explain how they are calculated.
You can download template a template KID on the government website.
A written statement of rights
The Taylor Review, which informed the Good Work Plan, explained that workers often enter into contracts without knowing the rights they are entitled to. This has been a big issue in recent years, especially for those who work in the gig economy, such as Uber drivers and Deliveroo riders. Despite being technically self-employed, a number of these individuals have successfully staked their claim for employment rights.
This grey area of employment status law has prompted the government to consult on rules that allow workers to access a ‘statement of their rights’, so they know where they stand before agreeing to a contract.
How can recruiters prepare?
From 6th April, all new workers need to be sent a written statement before they sign their contract. You can find out what exactly you need to include in this statement, here.
It’s worth noting that changes to written statements will not impact workers engaged through Parasol. Employees of Parasol will be given a full contract of employment that meets the written statement requirements.
Right to a stable contract
As part of the changes resulting from the Good Work Plan, all workers will be given the ‘right to request a more stable contract’ after 26 weeks of service at the same business. This is largely due to concerns held about the lack of job security experienced by zero-hour contract workers, which has led to employers benefitting from ‘one-sided flexibility’.
How can recruiters prepare?
While the government is yet to respond to the consultation it held on the issue last year, agencies should brace themselves for workers, particularly those on zero-hour contracts, requesting this right.
Recruitment agencies should also bear it in mind when discussing roles with hiring organisations, given considerations such as compensation for shift cancellation and a right to a fixed working pattern must be understood by all parties involved.
As 6th April closes in on us, what matters most is that recruiters take a proactive approach to managing the changes resulting from the Good Work Plan.
Parasol, serving the agile workforce
For more information and to learn more about how Parasol can help you compliantly implement these reforms, please get in touch with our partner support team on 01925 644 861.
