The long-awaited Taylor Review of Modern Working Practices, called ‘Good Work’, which can be read in full here, was finally published this week.
In a long list of proposals, largely concerned with addressing employment status and recognising the modern world of work we are now living in, including the rise of the ‘gig-economy’, the main ‘takeaways’ from the report for employers to take note of are:
‘Worker’ status could be scrapped
The proposed dropping of ‘worker’ status for that of ‘dependent contractor’, in a bid to distinguish more clearly between those who are genuinely self-employed and those who are not.
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 potentially just complicate things for both parties.
The report 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.
It also concludes that dependent contractors are most at risk of being taken advantage of by businesses, so suggests that those who fall under this category should be granted additional protections.
Regulation may not be the answer
The review 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.
So regulation may not be the best answer for improving workers’ experiences, and if this becomes a general approach it will be music to employers’ ears – too much burdensome regulation has long been the bugbear of every employer.
Employers could face bigger consequences in a tribunal
Although the report does not go as far as calling for tribunal fees to be scrapped (sadly for individuals, good news for employers!), 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 could be hit with penalties.
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.
A few other interesting proposals that the report mentions, are:
- Amend the legislation defining employees and dependent contractors so that case law principles are reflected in the legislation itself – possibly with supporting secondary legislation
- 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
- Treat dependent contractors as ’employed’ for the purposes of HMRC tax status
- Extend written statement of terms to include description of statutory rights
- Give a stand-alone right to compensation if employer has not given written statement
- Consider increasing the rate of the National Minimum Wage for hours that are not guaranteed by the employer
- Preserve continuity of employment where any gap in employment is less than one month, rather than one week
- Increase the reference period for calculating holiday pay (where pay is variable) to 52 weeks (currently 12 weeks).
- Allow holiday pay to be paid on a ‘rolled up basis’ (currently not allowed)
- Require employers to set up Information and Consultation arrangements when requested by just 2% of the workforce (currently 10%)
- Give HMRC enforcement powers in respect of sick pay and holiday pay as well as minimum wage issues
- Place burden on the employer in ET claim to prove that claimant is not an employee / worker
- Consider allowing flexible working requests to cover temporary as well as permanent changes to contracts
- Reform Statutory Sick Pay to make it a proper employment right available to all workers – accrued in line with length of service
- Give individuals a right to return to work following long-term sickness absence
Some of the reports ambitious proposals would be able to be implemented relatively quickly whilst others would obviously require a great deal of work to turn them into something specific e.g. a clearer definition of who is an employee and who is a ‘dependent contractor’.
Exactly which of the proposals will be implemented and what they will actually look like in practice in the coming months or years ahead and the impact this may have on employers in the challenging times that clearly lie ahead will be important.
Overall, is this an opportunity to make things better or worse for employers? Only time will tell – watch this space!