CIPP Policy Update - July

2 July 2018

CIPP policy update July Matthew Taylor is a name that has become very familiar, particularly with payroll and HR professionals, due to his review of modern working practices which was published in July 2017. The government's response to the recommendations made in the review, heralded not one, not two, but four consultations (published in February) – all with their own complexities for stakeholders to grapple with.

The CIPP Policy team has been gathering feedback from members on proposals within these consultations, and for the purposes of this article let's just look at one, which proposed certain measures to increase transparency in the UK labour market.

Much of the content of this consultation document involves areas which are of interest to both HR and payroll departments. We published an electronic survey, focussing predominantly on the proposals that will affect payroll, which are to:

  • Extend the right to a written statement to all workers from day one.
  • Extend the break in service period for continuous service beyond one week.
  • Increase the pay reference period for holiday pay from 12 to 52 weeks.
  • Increase awareness of holiday pay entitlements.
  • Ensure a typical workers receive their holiday pay entitlement.

The majority (84%) of respondents were responding as a business or employer and 16% were payroll service providers responding on behalf of their clients. Almost three quarters of respondents operate in the private sector. 76% of respondents employ 250 or more employees.

Key findings:

  • 55% of respondents have provided a written statement to permanent workers within the past 12 months.
  • 59% of respondents said that individuals receive a written statement before commencing paid employment.
  • The majority of respondents believe that it takes, on average, less than half an hour to produce a written statement for a new starter.
  • 63% of respondents rarely or never seek legal advice before producing a written statement.
  • All respondents feel that the current prescribed contents of a principal written statement are helpful in setting out employment particulars.
  • 94% of respondents agree that written statements should be provided on or before an individual's start date.
  • 87% of respondents agree that other parts of the written statement should be provided within two months of an individual's start date.
  • Opinion was divided as to whether the existing exemptions to the break in continuous service rules are sufficient.
  • Respondents felt more guidance in all areas of continuous service would be helpful.
  • 57% of respondents agreed that the holiday pay reference period should be amended.
  • 77% of respondents agreed that the holiday pay reference period should either be 52 weeks, or 52 weeks with the option to shorten that period if both employer and employee agree.

The responses to this survey reveal that written statements are a helpful way of setting out employment particulars and should be provided on or before an individual's start date.  However, whilst perhaps considered good practice, the evidence in this research suggests that not all employers are providing these statements to new employees - a situation which becomes even less clear, when non-permanent workers are provided through an agency.

There is strong support for the holiday pay reference period to be extended beyond 12 weeks to reduce the impact of seasonal peaks and troughs, with the majority in favour of an optional flexible period.

The CIPP has recommended that further work should be undertaken to explore how the measures explored in this consultation can be introduced whilst minimising the administrative burden on employers. Any legislative changes must be supported by clear, comprehensive and timely guidance.

Our open consultation surveys and formal consultation responses can be found under My CIPP/ Policy hub on the CIPP website.

  • Author Profile
    • Sp avatar Diana Bruce

      Diana is CIPP Senior Policy Liaison Officer and Guest Author for Smart Pension.