Worker status: Government publishes its ‘Good Work Plan’ in response to Taylor review consultations

The Government’s review of modern working practices has been a rather protracted affair but today there has been a significant development with the publication of the Government’s Good Work Plan, which sets out its vision for the future of the UK labour market.  However, as before, when making its initial response to the Taylor Review, the detail provided by the Government is a bit thin on the ground.  No draft legislation has been published, and there are very few indications of timescales for the changes. NB – SEE UPDATE BELOW.

Employers should, however, take note of the key proposals which include:

  • streamlining the employment status tests so they are the same for employment and tax purposes;
  • abolishing the Swedish derogation which allows employers to pay agency workers less than their own workers in certain circumstances;
  • a right for workers to request a fixed working pattern; and
  • changing the rules on continuity of employment so that a break of up to 4 weeks will not interrupt continuity.


Matthew Taylor was commissioned in November 2016 to carry out an independent review of modern working practices. The overriding ambition of the review was that, “all work in the UK economy should be fair and decent, with realistic scope for development and fulfilment”. The Taylor Review reported in July 2017, with the publication of itsGood Work’ paper, which made wide-ranging recommendations for reform.

The Government responded to the Good Work recommendations in February 2018 saying that it would carry nearly all of them forward. However, it said that some recommendations required further consultation to decide on the best way to deliver change. It therefore published 4 consultation papers:

The Good Work Plan published today is the Government’s response to these consultation papers.  It says it is committed to, “a wide range of policy and legislative changes to ensure that workers can access fair and decent work, that both employers and workers have the clarity they need to understand their employment relationships, and that the enforcement system is fit for purpose”.

The Government’s proposals for change

The Government says that it will:

  • Align the employment status frameworks for the purposes of employment rights and tax

The Government believes that having separate frameworks for determining employment status for the purposes of employment rights and tax causes confusion for individuals and employers. It says that it will bring forward detailed proposals on how the frameworks could be aligned.  There is, however, no further information at this stage.

  • Improve the clarity of the employment status test and improve guidance and online tools

The Government also says that it will legislate to improve the clarity of the employment status tests and improve the guidance and online tools available to help people understand their status. It will also legislate to prevent businesses from trying to misclassify or mislead their staff. It refers to the Taylor Review’s recommendation that whether someone is self-employed or has worker rights should have more emphasis on control, rather than the right to send a substitute.

  • Introduce a right to request a more stable contract

There will be a right for individuals, who have at least 26 weeks’ service with an employer, to request a more stable employment contract if they would like a more fixed working pattern. For example, this may be in relation to the number of hours a person receives, or fixed days on which they will be asked to work.  There is no detail yet on the obligations of an employer to consider this type of request.

  • Increase the time required to break a period of continuous service

Currently a gap of one week in employment with the same employer can break what counts towards continuous service, making it difficult for some employees to accrue employment rights. The Government proposes to allow a break of up to 4 weeks before continuity is affected.

  • Ban the use of pay-between-assignment contracts for agency workers (the Swedish derogation)

Agency workers can currently exchange their right to be paid equally to permanent employees in return for a contract guaranteeing pay between assignments (the Swedish derogation).  The Government says that it has evidence that this opt-out is not benefiting agency workers and that there are cases where pay between assignments simply does not happen. It therefore intends to repeal the Swedish derogation to guarantee long-term agency workers equal pay with comparable permanent workers.

  • Reduce the threshold of support for information and consultation rights

The Government proposes to lower the threshold required for a request to set up information and consultation arrangements from the current 10% of employees required, to 2%. The minimum threshold of 15 employees will remain.

  • Ban employers from making deductions from staff tips

Tips, gratuities and service charges can be a significant part of staff income. The Government will legislate to ban employers from making deductions from staff tips to offer a financial benefit to workers and to give consumers confidence that they money they leave to reward service is going to staff as intended.

  • Require a written statement of employment rights for workers

Currently, once they have been employed for a month, employees are entitled to a written statement of their employment terms which must be provided within 2 months of starting work. This will be extended to all workers and also made a day one right for both employees and workers. The information required to be given will also be expanded.

  • Increase state enforcement on behalf of vulnerable workers in respect of holiday pay

There will be an awareness campaign to boost awareness and understanding with regards to entitlement to paid annual leave, with new guidance and an improved holiday entitlement calculator. The reference period for determining an average week’s pay will also be increased from 12 to 52 weeks.

There will  be state enforcement of vulnerable workers’ holiday pay rights so that these workers can raise a complaint with a state enforcement body which will pursue the payment of arrears on the worker’s behalf, backed up by financial penalties.

  • Increase state enforcement on behalf of agency workers where they have pay withheld by an umbrella company

The Employment Agency Standards Inspectorate will be empowered to investigate complaints involving an umbrella company and take enforcement action where required. The action will focus on situations where agency workers have not received adequate pay.

The Government also says it will legislate to require all employment businesses to provide every agency worker with a Key Facts Page to include the type of contract the worker is employed under; the minimum rate of pay; how they are to be paid; and, if they are paid through an intermediary, any deductions of fees that will be taken, and an estimate of what this means for take-home pay. The Employment Agency Standards Inspectorate will have powers to take enforcement action for non-provision of a Key Facts Page.

  • Increase the maximum level of penalty that tribunals can impose in instances of aggravated breach to £20,000, plus create an obligation for tribunals to consider sanctions where an employer has lost a previous case on broadly comparable facts

Whilst recognising that the tribunal’s existing powers to award aggravated damages are not used as widely as they could be, the Government proposes to provide new guidance to help tribunal users understand the options available to make employers face the consequences of their actions. The maximum limit of an aggravated breach penalty will also be increased from £5,0000 to £20,000.

There will also be legislation to facilitate the use of sanctions where there are repeated breaches by the same employer and tribunals will be obliged to consider the use of these sanctions.

  • Name and shame employers who fail to pay tribunal awards

The Government proposes to make publicly name employers who do not pay employment tribunal awards which have been made against them. Employers will be able to avoid being named if they pay the outstanding award once prompted. Non-compliant employers will be identified through the BEIS penalty scheme which already allows individuals to register their unpaid employment tribunal award with an enforcement officer.

  • Create a new single labour market enforcement agency

In early 2019, there will be proposals for new single labour market enforcement agency to better ensure that vulnerable workers are more aware of their rights and have easier access to them, and that businesses are supported to comply.



The Government has now published a series of draft regulations to implement some of the proposals laid out in its Good Work Plan:

  • The Employment Rights (Miscellaneous Amendments) Regulations 2019
    • From 6 April 2019:
      • the maximum level of penalty which a tribunal may award for aggravated breach will rise from £5,000 to £20,000.
    • From 6 April 2020:
      • the section 1 ERA 1996 rights will apply to both employees and, for the first time, workers. The details of the rights are set out, and extended, in the Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018 – see below.
      • the Information and Consultation of Employees Regulations 2004 are amended so that the percentage required for a valid employee request for the employer to negotiate an agreement on informing and consulting its employees is reduced from 10% to 2% of the total number of employees employed by the employer.
  • The Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018
    • From 6 April 2020:
      • there will be a day one right to receive a written statement of particulars of employment for both employees and workers;
      • the statement of particulars provided is extended to include extra information including:
        • the days of the week the worker is required to work;
        • whether or not the days or hours may be variable and, if they may be, how they vary or how that variation is determined;
        • other paid leave (aside from holiday and sick leave);
        • any other benefits provided by the employer;
        • any probationary period, including any conditions, and its duration;
        • any training entitlement provided by the employer, and any part of that training entitlement which the employer requires the worker to complete, and any other training which the employer requires the worker to complete and which the employer will not bear the cost of.
      • these changes will apply to individuals whose employment begins on or after 6 April 2020.
    • From 6 April 2020:
      • the reference period for calculating an average week’s pay, where a worker has variable remuneration, is increased from 12 weeks to 52 weeks;
      • if the worker has been employed for less than 52 weeks, the reference period is the number of weeks for which the worker has been employed;
      • if earlier weeks must be brought into account because the reference period contains weeks in which no remuneration was payable, no account is taken of weeks preceding the 104 weeks before the beginning of the period of leave. If this gives fewer than 52 weeks to take into account, the reference period is that lower number of weeks or, if it gives no weeks to take into account, a week’s pay must instead be calculated on the basis of the amount which fairly represents a week’s pay (taking into account the considerations in s.228(3) ERA).
  • The Agency Workers (Amendment) Regulations 2019
    • From 6 April 2020:
      • the Swedish derogation is abolished – these are the provisions in the AWR 2010 which disapply the right of an agency worker to the pay they would be entitled to if they had been recruited directly by the hirer (after a qualifying period), provided that a permanent contract of employment is entered into between the temporary work agency and the agency worker, and certain conditions are fulfilled, including that a minimum amount of pay is paid to the agency worker between assignments;
      • where a temporary work agency and agency worker are already in a Swedish derogation arrangement when the new regulations take effect, the agency must give the worker a written statement which informs the worker that, with effect from 6 April 2020, the agency worker is entitled to the right to the pay they would receive if they were employed directly by the hirer (subject to the qualifying period). The statement must be given by 30 April 2020. Non-compliance entitles the worker to bring a tribunal claim and seek a remedy including compensation.