The long awaited Taylor Review of Modern Working Practices, called 'Good Work', which can be read in full HERE (if you’re really interested?!), was finally published last month.
Below is a summary of the proposals on employment law from the review (my own thoughts/ comments on some of them are in italics):
1. Maintain the distinction between employees and workers, but rename workers who are not employees ‘dependent contractors’ (DC’s) (but could this be more confusing for employers?)
2. Amend the legislation defining employees and workers (this article will refer to DC’s as workers throughout this list) so that case law principles are reflected in the legislation itself – possibly with supporting secondary legislation
3. Remove the requirement for workers to have a contract to perform work personally
4. Place more emphasis on control in the definition of worker status
5. Consider taking account of the subtly different definitions of ‘worker’ in the legislation
6. Retain need for personal service in employment contract
7. Amend the law on the National Minimum Wage to make it clear that gig-economy workers allocated for through an app are undertaking a form of output work and will not have to be paid NMW for each hour logged on when there is no work available
8. Treat workers as ’employed’ for the purposes of tax status
9. Extend the right to a written statement of terms to workers as well as employees
10. Require written statements to be given on day one of employment
11. Extend written statement of terms to include description of statutory rights
12. Give a stand-alone right to compensation if employer has not given written statement
13. Consider increasing the rate of the National Minimum Wage for hours that are not guaranteed by the employer
14. Preserve continuity of employment where any gap in employment is less than one month, rather than the current one week
15. Improve the information to be given to agency workers
16. Increase the reference period for calculating holiday pay (where pay is variable) from 12 weeks to 52 weeks.
17. Allow holiday pay to be paid on a ‘rolled up basis’ - currently not generally allowed
18. Give agency workers the right to request a direct contract with the end user after 12 months on an assignment
19. Give those on zero-hours contracts the right to request guaranteed hours after 12 months
20. Require employers to set up Information and Consultation arrangements when requested by just 2% of the workforce rather than the current 10%
21. Require larger employers to report on their overall workforce structure – including requests from zero-hours workers for regular hours
22. Abolish the ‘Swedish Derogation’ which allows agencies to avoid matching end user pay by employing agency workers in a way that allows for pay between assignments
23. Give HMRC enforcement powers in respect of sick pay and holiday pay as well as minimum wage issues - employers would be kept on their toes
24. Allow claimants to bring a claim to ET (without fee) to determine employment status as a preliminary issue prior to substantive claim
25. Place burden on the employer in ET claim to prove that claimant is not an employee / worker
26. Give BEIS the power to pursue the enforcement of Tribunal awards – i.e. pursuing the actual award, not just imposing a penalty for non-compliance
27. Allow ET to impose aggravated penalties on employer who does not apply ET ruling on employment status to similar groups of workers
28. Allow uplifts in compensation where the employer commits subsequent breaches of employment law based on similar working arrangements to those already dealt with by ET
29. Consider allowing flexible working requests to cover temporary as well as permanent changes to contracts
30. Reform SSP to make it a proper employment right available to all workers – accrued in line with length of service
31. Give individuals a right to return to work following long-term sickness absence
The main ‘take-aways’ from the report to take note of are:
1. ‘Worker’ status could be scrapped
The proposed dropping of ‘worker’ status for that of ‘dependent contractor’, is a bid to distinguish more clearly between those who are genuinely self-employed and those who are not. The review adds that more weight should be given to the concept of control when determining employment status, as opposed to the concept of substitution or whether a worker can nominate somebody else to do a job for them. Because the report also concludes that dependent contractors are most at risk of being taken advantage of by businesses, it suggested that those who fall under this category should be granted additional protections.
However, far from clarifying the position, the new category of employment status of a ‘dependent contractor’ who has a number of employment rights, but presumably different to those of a ‘worker’, could just complicate things for both parties. This new status is unclear and unnecessary - recent employment tribunal rulings have required prominent gig economy employers to pay their workers basic benefits, like sick pay, holiday leave and the national living wage and what is needed is for these rights and responsibilities to be clearly set out in legislation. Clarity is king, in the ‘grey’ areas of employment.
2. More red tape may not be the answer
Regulation is not the best answer for improving workers’ experiences according to the review - it calls for responsible corporate governance, better management and stronger employment relations, stressing that companies should strive to be open about their practices and make sure all their workers are engaged and feel heard.
3. Companies dragged before a tribunal could face bigger consequences
Although the report does not go as far as calling for tribunal fees to be scrapped, it does advocate some big changes to the system, including introducing a mechanism where people can have their employment status determined without having to pay tribunal fees. The review also calls for businesses that don’t pay awards from tribunal rulings within a reasonable timeframe to be named and shamed, while those companies that fail to change the status of their staff after a tribunal ruling and get hauled up in front of a judge again on the same issue could be hit with penalties.
4. Zero-hours workers and agency workers to get further rights after 12 months
The review suggests the creation of a right that would allow those who have worked on a zero-hours contract for 12 months or longer to request fixed hours from their employers that better reflect the hours they have actually been working.
Also agency workers could be asking for more stability, too - much like the zero-hours contracts right, the review also suggests a right that would allow agency workers who have been placed with the same hirer for at least 12 months to request a direct contract of employment. The hirer would be obliged to treat any such requests seriously.
Some of these proposals are ‘ready to go’ and others would clearly require a great deal of work to turn them into reality e.g. a clearer definition of who is an employee and who is a ‘DC’ – in reality what would those definitions actually look like? Watch this space.