The Taylor Review of Modern Working Practices
Monday 24th July 2017
The Taylor Review of Modern Working Practices, which focused on employment rights and new models of working, has recently been published. We summarise the main recommendations below.
The Review recommends that legislation and guidance should be developed to ensure that the employment status tests are clearly set out. The current approach of employee, worker and self-employed is to be retained, but the Review suggests that it should be made easier to distinguish between the two categories of workers. Workers who are not employees should be renamed as “dependent contractors”.
The requirement to provide personal service should be retained for employees. However, for “dependent contractors”, the Review concludes that the absence of a requirement to provide personal service should not be an automatic bar to basic employment rights. Instead there should be more focus on outlining the meaning of “control” and not just as it relates to day-to-day activities, providing clarity and preventing employers from using a substitution clause to circumvent worker status.
The Review proposes addressing the lack of consistency between employment law and tax law by aligning the two systems so that if an individual is employed for tax purposes, they are for employment purposes either an employee or “dependent contractor”.
The Review recognises the need to ensure that changes to employment status definitions are accompanied by an approach which supports flexibility for platform workers who use apps to provide services.
The Review suggests that data providing an accurate guide to potential earnings, based on supply and demand, should be made available and that platform workers should be required to take some responsibility for choosing to work when demand is lower.
Terms & Conditions of Employment
The right to a written statement of particulars should be extended to include “dependent contractors” and detail statutory rights. The development of a standard format is also encouraged, as is the requirement to provide the statement on day one. A standalone right to claim compensation for failure to provide a written statement may also be introduced.
To ensure greater protection for casual workers, the Review recommends continuity of employment be preserved where any gap in employment is less than one month (rather than the current week) and that this increase should be accompanied by clarification of situations where a gap in work might be justified.
The Review recommends that the Low Pay Commission be asked to consider an increased rate of the National Minimum Wage for hours worked that are not guaranteed by the contract as a means of compensating for the additional flexibility zero or short-hour contracts offer employers.
Holiday pay recommendations include increasing the reference period used to calculate holiday pay for those with variable pay from 12 weeks to 52 weeks.
The Review also suggests introducing some new protections for workers who are not employees:
- Statutory sick pay should be made available to all workers and accrue in a similar way to holiday entitlement.
- There should be a right to return to work following long-term sickness absence.
- Agency workers should be given the right to make a request for a direct contract after 12 months on an assignment and have the request considered in a reasonable manner.
- Those on zero-hours contracts should after 12 months have the right to request guaranteed hours which better reflect actual hours worked.
The Review recommends that employment status should be determined through a preliminary hearing and should not incur either the initial issue fee or hearing fee. Further, the burden of proof should be on the employer.
ETs should also consider imposing aggravated penalties and costs orders on employers who have already lost a comparable employment status case. Similarly, it recommends allowing uplifts in compensation where employers commit subsequent breaches of employment law based on similar working arrangements to those already dealt with by ET.
All information in this update is intended for general guidance only and is not intended to be comprehensive, or to provide legal advice.