Alex Fraser, Director at Engage Technology Partners
Since the publication of the Taylor review in 2017 there has been wide speculation as to just what action the Government will take in response to the recommendations. For recruiters, many of the proposals in the review of modern working practices could have a significant impact on the agency workers and employers they work with, including several “nuts and bolts” matters such as worker status, holiday pay, zero-hours contracts and minimum wage payments.
With the release of the Good Work Plan, the hiring sector has some well-needed clarity, but there will, without doubt, be an impact on the already complex world of agency worker compliance. In particular, the suggestions demonstrate the growing need for robust data collection procedures and systems.
Here are the key proposals agencies need to be aware of.
Employment status clarification
As part of its plan, the Government has stated that it will “bring forward detailed proposals” on how the employment status frameworks for the purposes of employment rights and tax should be aligned. The fact that the status of an individual can differ according to employment versus tax legislation highlights the complexity in this area, so aligning the two will certainly be beneficial for all involved in the hiring of agency workers on a long-term basis. Authorities will presumably seek to design a single framework that provides clarity for individuals and employers, enabling HMRC to better implement tax legislation.
While this is being defined, however, recruitment agencies and end hirers will still need to automate systems to collect and maintain Employment Status Indicator information and ensure that the data collated can live up to the demands of any subsequent audits.
A new right for workers to request a more predictable and stable contract
According to the proposals, staff who work variable hours will have the right to request a fixed working pattern. Akin to the current right to request flexible hours, this seems unlikely to result in any real difference anywhere except the very largest private and public sector organisations who have the flexibility to implement this. For recruiters, it could certainly lead to greater enquires and negotiations when seeking to secure a placement for agency workers.
Introducing a “name and shame” scheme for employers who fail to pay Employment Tribunal awards
While, of course, this approach is designed to encourage good working practices, the Government needs to ensure it doesn’t go the same way as the ‘naming and shaming’ of National Minimum Wage breaches. Originally this appeared to be a strong deterrent until a series of high street names were found to have fallen fowl of these requirements through unforeseen and unintended technicalities. At this point, the negative publicity was all directed at the HMRC, not the criminals who deliberately abused vulnerable workers.
The proposals outlined in the Good Work Plan have certainly been designed to create fairer working practices for agency workers and those engaging with this audience will undoubtedly welcome this move. However, for recruiters and hiring teams it will place a greater strain on their compliance requirements. Having robust data systems and procedures in place is now arguably more important than it’s ever been.