It’s been a turbulent year. With many businesses adopting survival mode mid-March it is understandable that certain aspects of the operation have found themselves lower on the priority list than would be justified in a “normal” year.
As an Umbrella company, we are classified as an essential service – our office staff members are noted as key workers throughout the entire pandemic – meaning we had the full operational capacity to keep a close eye on legislation that affected our employees, contractors, and supply chain.
Though we spent time becoming COVID secure, the fact that we continued to work meant that we had a better vantage point of new legislation than many other businesses that temporarily shut down. The Government’s Good Work Plan was implemented in April despite the evolving pandemic. Its introduction was largely shadowed by global events, meaning many businesses may have overlooked key changes required within their operation.
The Government published the Good Work Plan (GWP) in December 2018, in response to the 2017 Taylor review of employment practices in the UK. The GWP introduced several items of reform designed to provide clarity for employers and workers, to ensure fair and decent engagement conditions for all. As a result changes to employment law (relevant to all employers) were implemented in April 2020.
With eyes and attention firmly on COVID at that time we thought that it may be worth recapping a few of the highlights:
As part of the government’s plans to provide clarity for employers and workers, the right to a written statement of employment particulars was introduced. In the umbrella and recruitment agency world this is often referred to as a Key Information Document.
Written statements must address a variety of key factors. It is important to note that the right to review a statement is not only for employers, employees must be privy to the details also.
Before April it was mandatory to provide an employee with a document that included the following:
April’s GWP introduction meant that the following additional aspects must also be incorporated:
Most of this information pre-April 2020 would be available in supplementary documentation, but should now be included in the main statement now.
Organisations did not have to issue new contracts to existing staff, all the new requirements apply only to new employees starting after the April 2020 start date. Existing employees may, however, request a written statement that complies with the new requirements. The company is obliged to fulfil this request within a month, but the employee can only ask for the document once.
The calculation of holidays also changed. The old system of using a 12-week reference period to determine an average week’s pay for the holiday pay entitlement is not gone. The reference is now updated to a period of 52 weeks or the number of completed weeks for which the worker has if employed for less.
Two key changes for employment businesses and those that engage with them (many parties within the umbrella/contractor supply chain) are the abolition of the Swedish derogation and provision of a Key Information Document (mentioned earlier) to agency work seekers.
As levels of self-employment and flexible working have increased, so has the number of umbrella companies acting as the employer between the end-client and worker.
The Taylor review concluded that, while higher-skilled and higher-paid sectors are well served by umbrella companies, their role is more questionable for lower-skilled, lower-paid roles. The statutory protections for these workers must be adhered to and the margin that umbrellas are able to attain (while remaining a financially viable expense to the contractor) may jeopardize the operation from a revenue perspective.
One of the perceived drawbacks for workers is that the added layer of umbrella companies can create uncertainty as to who their employer is. This means that it can be hard to know who to hold responsible for paying wages in full and on time and who should be ensuring their employment rights are being observed. Our advice – send contractors our way, we provide full clarity as to the role of every party within the supply chain as a matter of simple customer service (which we know can be hard to come by nowadays!)
The Government is planning to introduce legislation to expand the remit of the Employment Agency Standards Inspectorate (EASI) to cover umbrella companies. This will empower the EASI to investigate complaints involving an umbrella company and take enforcement action where required. This action will focus on situations where agency workers have not received adequate pay and will protect decent employers from unfair competition.
As mentioned, we’ve been operating consistently throughout the pandemic, our practices have evolved and our engagement with our employees has developed in accordance with the GWP. We were so confident in our practices and in operational standards that we approach the Employment Rights Assessment for a guided audit and certification. We are pleased to say that we passed and are now ERA Certified.
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