Government reforms (3): Employment status – reviews

What do we already know?

The law in the UK distinguishes between groups of staff and provides different rights for each group. Broadly these groups are 1) employees, who have the largest selection of legal rights 2) workers who have a more limited selection of rights and 3) the self-employed who have minimal legal rights owed to them (other than contractual rights agreed between themselves and each organisation to whom they provide their services).

For a self-employed, non-employee, to qualify for worker status there must, in general terms, 1) be a contract between the individual and the ’employer’ under which the individual is required to carry out the work personally (so an unfettered right to appoint someone else to do the work in their place is inconsistent with worker status); and 2) the ’employer’ must not be a client or customer of a business operated by the individual.

Those who show they have ‘worker’ status can then access a broader range of employment rights such as the national minimum wage, 5.6 weeks’ paid annual leave each year, right to a pension scheme, a maximum 48 hour average working week and rest breaks and protection of the whistle blowing and discrimination legislation.

What’s new?

The Government has this month published a long awaited review Employment Status Review.  This was commissioned by the previous Government and is dated December 2015.

The review states:

“It has become increasingly clear that determining whether you are an ’employee’, a ‘worker’ or genuinely self-employed is not a simple calculation for some, requiring familiarity with complex legislation and decades of case law.”

The purpose of the review was to investigate ways of ensuring both individuals and employers have the clarity they require up front and to strike the correct balance between the rights of the individual and the needs of business, supporting growth and prosperity.

However, the review does not make any recommendations and has been superseded by the Taylor Review which was launched on 30 November 2016 (available here) and is due to be published later this year.  The Taylor Review will no doubt consider the material in this previous review, but is expected to be more proactive in its conclusions.

The Taylor Review team is expected to speak to employers and workers in the gig economy, the rural economy and the manufacturing sector and the review will consider the implications of new models of working on the rights and responsibilities of workers, as well as on employer freedoms and obligations.

Comment:

In light of the recent case law on employment status (see our Case Updates below), particularly coming out of the ‘gig economy’ these reviews are very welcome.  Hopefully at least the Taylor Review will go some way towards resolving the complexity of employment status and help organisations and individuals get it right at the start; avoiding costly and time-consuming visits to the Courts and Tribunals.