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Government reforms (1): Employment status – Taylor Review

What do we already know?

We updated you in our February 2017 Newsletter Government reforms (3): Employment status – reviews on the Taylor Review (launched in November 2016) which has been set up to work towards resolving the complexity of employment status.

What’s new?

The Taylor Review of Modern Working Practices (the Review) was published earlier this month and considers how technology platforms have impacted working practices.  It focuses on the importance of quality work:€œfair and decent work with realistic scope for development and fulfilment“ and makes detailed recommendations for reform of UK employment law in respect of those who are not engaged as traditional employees, both in the “gig economy” and elsewhere.

The report sets out the following key policy approaches:

Practical recommendations of particular interest include:

Zero Hours Contracts

The Review does not suggest the banning of zero hours contracts. It recognises that some workers may want to work in this way. However, the Review concluded that too many employers are still relying on zero hours contracts, short-hours or agency contracts.

The Review made recommendations in relation to zero hours contracts:

Dependent Contractors (new name for those with ‘worker’ status)

A requirement to perform work personally would no longer be crucial to being a “worker” – the focus would be on how much control an organisation has over that individual. The rationale for this is that it is unfair that individuals who, in theory at least, have the right to provide a substitute should not be able to gain “worker” (or “dependent contractor”) status.

Organisations that have a “controlling and supervisory” relationship with individuals, who they may be classifying as self-employed, would have to pay a range of benefits. This would include holiday and sick pay, for example. As a result, the report recommends changing the current pay reference period from 12 weeks to 52 weeks to help seasonal workers and others. The Review recommends that “rolled up” holiday pay should also be available, meaning that “dependent contractors” would be able to choose between taking paid time off and receiving a premium on their pay instead.

Other Recommendations

The Review makes a number of other recommendations which include:


Although potentially far-reaching, it is important to note that the Review only constitutes a set of recommendations for the Government to consider. It is unclear whether or when any of the Review’s recommendations will be introduced in practice, particularly given the Government’s lack of a parliamentary majority. Also, given the very large number of jobs that have been created in the gig economy sector in recent years, and its benefits to consumers and the economy as a whole, this is a matter about which the Government will need to be very cautious to ensure that it does not inadvertently and irreparably “break” the model.

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