In April 2020, many of the recommendations made in the Taylor Review in 2017 were introduced by the government in what has been described as the biggest shake up of employment law in a generation.
After taking on board many of the 53 suggestions made in the Taylor Review, the government published the ‘Good Work Plan’, which proposes a raft of legislative changes to create a ‘fair and decent’ employment landscape and one that offers ‘greater clarity for employers and workers’ along with ‘fairer enforcement’ of the rules.
While many of the reforms set to be rolled out as part of the Good Work Plan apply strictly to employees, it’s nonetheless important that freelancers and contractors, particularly those working through agencies, are up to speed.
The end of the Swedish derogation model
From 6th April 2020, ‘Swedish derogation’ was abolished. To explain what this means in layman’s terms, we’ll start by running you through the basics of Agency Workers Regulations 2010 (AWR), which it’s tied to.
Agency Workers Regulations were introduced in 2011 to protect vulnerable workers and ensure that agency workers were entitled to the same pay and conditions as a permanent equivalent. One of the rights included was a rate to the same pay as a permanent equivalent at the same end hirer once the worker had been on assignment for 12 weeks.
When the UK adopted this EU directive, we included regulations 10 and 11. This meant that agency workers who were engaged on a full contract of employment, that offered pay in between assignments could waive their right to equal pay.
It’s officially called a ‘Pay Between Assignments Contract’, but has been widely used in Sweden, hence the name Swedish derogation.
To cut a long story short, the government will repeal regulations 10 and 11 on 6th April 2020 and this means from it will no longer be possible for any agency worker to waive their right to equal pay at 12 weeks.
Key information document
The introduction of a ‘Key information document’, which agencies must provide to all workers, is intended to ‘improve transparency of information for agency workers, particularly around pay.’
This document must be given to the worker before a contract is signed, to make sure the individual has a firm idea of what this decision means for their pay. Agency workers will be sent information that details the minimum amount they will receive along with a breakdown of any deductions, such as tax.
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Right to a stable contract
The government acknowledges the importance of flexible working, alluding to freelancing and contracting, but believes this can leave many people vulnerable – particularly those who work on a zero-hour contract. To combat this, the Good Work Plan will give all workers the “right to request a more stable contract” after 26 weeks.
Given this move is perceived to apply to so-called lower earners and not established freelancers and contractors, it’s worth noting that you are under no obligation to ask your client or agency for this.
While these reforms have been welcomed overall by employees and vulnerable workers who may need greater protection, contractor representatives have urged caution, making it clear that the Good Work Plan mustn’t restrict independent workers from delivering flexible working arrangements to clients.
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