Government reforms (2): Employment status – Government response to the Taylor review

employment status

What do we already know?

We updated you in our July 2017 Newsletter Government reforms (1): Employment status – Taylor Review that the Taylor Review of Modern Working Practices had been published.  The Taylor Review made 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.  For further detail on the background of this Review please see our updates here.

What’s new?

The Government has published its ‘Good Work’ plan (available here) in response to the Taylor Review of Modern Working Practices.

The Government has decided to take forward all but one of the Taylor Review proposals.  However, many of the plans are being progressed by way of consultation and may result in increased guidance rather than legislative change.  Therefore although recent press reports suggest that the Government has announced substantive changes to employment law, in fact there are few immediate changes.

Importantly, the one Taylor Review proposal not to be taken forward is to equalise National Insurance for employees and the self-employed. Therefore National insurance contributions for the self-employed will not be increased.

Summary of the Response

Measures that have been announced include:

  • Ensure day-one rights such as holiday pay and sick pay entitlements and a new right to a payslip for all workers, including casual and zero-hours workers;
  • Help enforce vulnerable workers’ rights to holiday pay and sick pay;
  • Introduce a right to request a ‘more stable contract’ (explained in the report as being a contract with more predictable and secure working conditions) for all workers including those on agency and zero-hours contracts. This goes further than the recommendation in the Taylor Review to allow zero-hours workers to ask for a secure contract after 12 months of work;
  • Make it easier for atypical workers to secure holiday rights by increasing the reference period to 52 weeks;
  • Make it easier for atypical workers to establish continuity of service by potentially extending the relevant break in service from one week to one month;
  • Extend the right to a written statement of particulars to all workers (rather than just employees);
  • Provide all agency workers with a clear breakdown of who pays them, and any costs or charges deducted from their wages. Also, seek evidence on the extent of the abuse of the ‘Swedish derogation’ that allows work-seekers to opt-out of equal pay entitlements; and consider repealing the laws which allow agencies to employ workers on cheaper rates;
  • Ask the Low Pay Commission to consider the impact of higher minimum wage rates for workers on zero-hours contracts;
  • Define ‘working time’ for flexible workers who find jobs through apps or online so they know when they should be being paid;
  • Ensure unpaid interns are not doing the job of a worker;
  • Launch a task force with business to promote awareness and take-up of the right to request flexible working;
  • Make sure new and expectant mothers know their rights;
  • Launch a new campaign to encourage more working parents to share childcare through shared parental leave;
  • Introduce a new naming scheme for employers who fail to pay Tribunal awards; and
  • Quadruple Tribunal fines for employers showing malice, spite or gross oversight to £20,000 and consider increasing penalties for employers who have previously lost similar cases.

Four separate consultations will be published on:

  • Employment status (available here): examining options, including new legislation, to make it easier for both the workforce and businesses to understand whether someone is an employee, worker, or self-employed.  Also  to determine which rights and tax obligations apply to them.
  • Enforcement of employment rights (available here).
  • Agency workers (available here).
  • Measures to increase transparency in the UK labour market (available here).

We’ll continue to update you on the progress of these measures and consultations in our Newsletters so watch this space…

employment status