The Retailer Winter 2018/19

Retail and the Good Work Plan

Matthew Lewis Partner, Labour & Employment and Head of Retail Squire Patton Boggs

DESCRIBED AS “THE BIGGEST PACKAGE OF WORKPLACE REFORMS FOR OVER 20 YEARS”, RETAILERS WILL NEED TO CHANGE THEIR EMPLOYMENT PRACTICES. The UK government published its “Good Work Plan” on 17 December 2018, setting out how it intends to take forward the majority of the recommendations made by Matthew Taylor in his Review of Modern Working Practices. This article explores the key changes. As an industrial strategy document, the Good Work Plan builds on the government’s initial response to the Taylor Review published in February 2018. It confirms the government’s intention to legislate to “improve the clarity of the employment status tests, reflecting the reality of modern working relationships”. This comes on the back of a myriad of employment/worker status cases and the changing way that people work. Matthew Taylor identified the issue of “one-sided flexibility”, with workers remaining on insecure, atypical contracts for long periods of time. In light of the number of people in store and distribution centres on atypical working arrangements, change will have a real cost to retailers and related businesses. Employment Status There will be new legislation to seek to improve the clarity of the employment status tests. This is likely to place more emphasis on the degree of control a business has over an individual and less emphasis on whether the individual has the right to send a substitute. The Good Work Plan says little as to how it intends to provide this clarity other than it will develop an online tool to help people more readily determine their employment status. The proposal is to align the employment status framework for the purposes of employment rights and tax to ensure that the differences between the two systems are reduced to an absolute minimum. The Good Work Plan does not specify how to deal with the fact that tax law takes a two-tier approach to employment status (employed or self-employed) and employment law has a three-tiered approach (with the intermediate status of “worker”, which does not form any part of the tax position). At this point, there are more questions than answers but this could lead to “self-employed” becoming “workers” (with rights to holiday pay) and “workers” transitioning to being employed.

Casual employees often have difficulty accruing certain employment rights such as unfair dismissal, flexible working or shared parental leave, because a gap of just one week in employment can break the continuity of service that is needed for these rights. The government intends to extend this gap to four weeks and this will lead to more employees benefitting from employment rights that require a minimum period of service. Holiday Pay There will be legislation to extend the holiday pay reference period from 12 to 52 weeks, together with new guidance to support the interpretation of holiday pay rules. This should help retailers plan more effectively. On the other hand, where there are employees and workers who do not have a regular working pattern, it could mean they benefit by not having to take their holiday at a quiet time of the year when their weekly pay might be lower. There will also be new legislation to enforce payment of holiday pay in the same way as HMRC enforce the national minimum wage. Transparency There will be a new “day one” right for all workers (i.e. not just employees) to have a written statement setting out details of their terms and conditions. This statement will need to include how long a job is expected to last; details of types of paid leave, e.g. maternity and paternity leave; duration and conditions of any probationary period; details of all remuneration (not just pay); which specific days and times workers are required to work; how much notice an employer and worker are required to give to terminate the agreement; and details of eligibility for sick leave and pay. These changes will come into force in April 2020. Tips and deductions The government intends to legislate to ban employers from taking “administrative fees” or other deductions from staff tips.

34 | winter 2019 | the retailer