The hotly anticipated Taylor Review (Good Work: The Taylor Review of Modern Working Practices) was published last week, having been commissioned by Theresa May last autumn. Matthew Taylor was tasked with chairing a review of employment law practices, the rights of workers and the obligations of employers. It was deemed necessary in light of rapidly changing business models, particularly amidst concerns about exploitation in the so called gig economy (think Uber, CitySprint, Deliveroo all involved in recently publicised employment tribunal cases).
The Review made a number of recommendations in relation to employment status. It recommends that the existing three-tier approach to employment status should remain. However, in respect of the middle category of “worker” (being somewhere between self-employed contractor and employee) these should be renamed as “dependent contractors”. Also, for these workers/dependent contractors, the current requirement for them to provide personal service should be removed and replaced with a greater emphasis on control (with legislation to outline what is meant by “control” in a modern working environment).
On the same note, the Review notes that the various factors to be taken into account when determining an individual’s employment status (control, personal service, mutuality of obligations and whether the person is carrying a business undertaking) should be enshrined in updated legislation. There is also provision for a claimant to bring an employment tribunal claim to determine their status without incurring tribunal fees. Where an employer disputes that a claimant has employee or worker status, the Review suggests the onus should be on the employer to dispute.
Further relevant points
Here are some of the other employment law related recommendations:-
- Extend the requirement to issue a written statement of terms and conditions to workers/dependent contractors in addition to employees. Make this a day-one requirement (currently employers have two months to arrange this) and include a description of statutory rights within the statement.
- Today, an employee wishing to claim to an employment tribunal for a failure to issue a statement of terms and conditions must piggy back this onto another valid claim (e.g. unfair dismissal). The Review suggests making this a standalone claim for compensation (presumably attracting a fee for the employee). An employee can claim for 2 or 4 weeks’ pay.
- Continuity of employment can be broken by any gaps in employment of one week or more – this should be extended so that only breaks of one month or more would break continuity.
- To prevent seasonal workers being shorthanded on holidays, increase the reference period for calculating holidays for those whose pay is variable from 12 weeks to one year.
- Individuals should have the option to receive “rolled-up” holiday pay which is effectively an extra payment (12.07%) on their wages instead of paid time off. This practice is currently unlawful as it incentivises employees not to take time off by paying them more money instead of taking holidays.
- Allow zero hours contractors to request guaranteed hours after 12 months (is this is to be backed up with a sanction for employers who don’t grant such requests? Will there be a list of permitted grounds for rejecting the request akin to the flexible working request scheme?). (All questions which we don’t yet know the answers to).
- Agency workers can request a contract of employment with the hirer after 12 months of engagement with the same hirer.
- Anyone who has worker/dependent contractor status would be treated as employed for the purposes of the tax regime.
- Consideration to be given to implementing a higher rate of National Minimum Wage (“NMW”) for non-guaranteed hours in a contract. Businesses would in essence have to pay a higher wage for the flexibility from which they benefit when using zero hours contracts.
- The NMW legislation should be varied so that gig economy (“platform workers”) are categorised as performing “output work” and will not be entitled to NMW for each hour that they are logged into the app at times where there is not any work available.
- Amend SSP rules so that it becomes a basic employment right which accrues with length of service. Employers should not have to honour the full 6 month entitlement for short service employees.
- Provide enforcement powers to HMRC in respect of holiday pay (as they have already for SSP/NMW).
- The Government should simplify the process for enforcing payment of employment tribunal awards by vesting the power in itself to pursue unpaid awards.
- Review the information and consultation obligations so that these can be triggered when requested by just 2% of the workforce, as opposed to the current 10% required.
These are interesting times in the field of employment rights and workplace relations.
Watch this space as to which of these recommendations the Government implements.
Many of the suggestions are probably good to go straight off the shelf. Employers would be prudent to review the composition of their workforce to assess the likely implications.
However much thinking will need to applied to some of the suggestions before they will be capable of implementation.
Good luck to the draftsman!
Associate Solicitor, Employment