Good Work heading the way of the agency worker

22 January 2019

CIPP's Samantha Mann explores the latest Good Work Plan proposals and examines parallels with work carried out by its equivalent in tax.

What do Matthew Taylor and the Office of Tax Simplification (OTS) have in common? 

The Matthew Taylor review was based on an underlying principle that all work should be fair and decent. Taylor now has a seat on the Industrial Strategy Council, which has been tasked with informing how the government intends to measure this by developing a set of metrics to measure the quality of the work in the UK Labour market based on five ‘foundational’ principles:

  • Satisfaction
  • Fair pay
  • Participation and progressions
  • Wellbeing, safety and security
  • Voice and autonomy

The outcome of the Taylor Review and subsequent government consultations, as revealed in the Good Work Plan, is set to keep us busy in the coming months and years but the proposed solutions to benefit agency workers was a subject that hit the headlines as we all headed towards the festive period in December 2018.

Swedish Derogation

Otherwise referred to as ‘Pay between Assignments’, Swedish Derogation is so called because it was an amendment request that was originally put forward by the Swedish government during the drafting of the Agency Workers Directive that reflected common practice within Sweden.

The Agency Worker Regulations 2010 (AWR) provide entitlement to agency workers with the same rights to pay and conditions as comparable employees after they have worked for a 12-week period.

Pay between assignment contracts allows an agency to provide a contract to the temporary worker that is permanent and provides the worker with payments during the periods where no work is available. The employee must be made aware (and understand) that they are surrendering their right to equal pay as provided for in AWR.

Rules for this type of contract, which aim to provide protection from abuse, state that pay must be at a rate that is at least 50% of the highest rate paid in the previous 12 weeks and cannot be below the relevant minimum wage rate. The contract must also last for a minimum of four weeks before being terminated.

This doesn’t impact on their continued right to annual leave entitlement, rest breaks or entitlements granted from day one of working.

Always a controversial subject, it is unsurprising therefore that following consultation the government has laid amendment regulations that will repeal the use of this type of contract from April 2020.

The Good Work Plan highlighted that the Department for Business, Innovation and Skills (BEIS) research had come across cases where pay between assignments does not happen for a number of reasons. During consultation, many recruitment agencies confirmed that they had either moved away from this type of contract already or indeed have never provided for it.

The agency must provide a written statement to affected agency workers to inform them of this change and notify them that they are entitled to the rights relating to pay and conditions as provided for in AWR. It must be provided by 30 April 2020.

Further work continues with the recruitment sector and relevant stakeholders, and guidance for employers and their advisers will be released through the Employment Agency Standards Inspectorate (EAS).

Key facts page

Transparency continues to be a dominant theme in every conversation relating to pay and employment, and in continuation of this theme for the benefit of agency workers there will be a legal requirement for all employment businesses to provide each agency worker with a key facts page that will include details of:

  • The type of contract the worker is employed under
  • The minimum rate of pay that they can expect
  • How they are to be paid
  • If they are to be paid through an intermediary company
  • Any deductions or fees that will be taken
  • An estimate or examples of what it means for the worker’s take-home pay

It must be easy to understand and work is continuing with vested stakeholders to ensure this assurance is delivered. It will fall to the employment businesses to ensure the worker receives the key facts page.

Written statement of employment particulars

On the subject of employment particulars, but not unique to agency workers, the right to be provided with a written statement of employment particulars is to become a day one right to workers in addition to employees.

The Employment Rights (Miscellaneous Amendments) Regulations 2019 have been drafted that will see this obligation coming in from April 2020. Currently, only employees who have worked for their employer for one month or longer are entitled to this written statement, which must be provided writing two months of starting work.

Period of continuous employment

Again, this is not unique to agency workers but relevant enough for the purpose of this conversation. The relevant period that will count as ‘breaking continuous service’ is to be extended from one week to four weeks.

Annual leave calculations – reference period

Certainly worthy of a mention at this stage are The Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018, which have been laid before Parliament. They make provision from April 2020 to extend the reference period, used for the purpose of calculating annual leave entitlement, from 12 to 52 weeks where a worker has worked for at least 52 weeks. Where the employment contract spans a period of fewer than 52 weeks, the calculation period will be that period.

But that isn’t all the Good Work plan promises to deliver…

There were many challenges detailed in the Good Work Plan, such as the right to request a more stable contract and of course the thorny subject of employment status – but more about these subjects (and many others) as greater detail and certainty is revealed.

There has been significant discussion over recent months about the quality and fairness in the application of compliance and enforcement. Matthew Taylor highlighted it, as does the Director of Labour Market Enforcement and the Low Pay Commission, which regularly includes this important subject within its annual reviews.

Add to these the voices of professionals working in accountancy, payroll and HR who regularly share experiences in this space, it is with interest then that we await further news detailing a single labour market enforcement agency – also mentioned within the Good Work Plan.

April 2020 promises to be a full year of change in the employment space and we can all be assured that change will continue to flow through as a result of the research carried out by Matthew Taylor and others, just as we have experienced (and continue to do so) in the tax arena as a result of research carried out by the OTS.

Tax simplicity hasn’t proven to be easy to deliver, and I suspect that delivering work that is fair and decent will also provide many challenges.


This article was originally written for Accounting WEB (22 January 2019)