Taylor review: modern working practices
Details
The long anticipated Taylor review into modern working practices has been published and its proposals make interesting reading, not simply for those employers operating in the so called ‘gig-economy’ but for other employers too. The report is purely advisory in nature and the Government must decide whether to, and if so, how to, implement its recommendations. The report runs to 116 pages and contains more than 50 recommendations, but highlights include:
Dependant contractors
The current middle ground status of ‘worker’ should be re-labelled as a ‘dependant contractor’. This new ‘dependant contractor’ status will be wider than the current ‘worker’ status because the main focus of the test will be on the employer’s ‘control’ and supervision, rather than the individual’s ‘personal service’ (meaning that the ability to send a substitute to do the work will not be a barrier to gaining this new status).
Dependant contractors will be entitled to receive certain benefits such as sickness and holiday pay. With regard to entitlement to the national minimum wage, the report recommends an adaptation of the piecework regime, under which employers will be obliged to prove that staff can earn at least 20% more than the national living wage (which is currently £7.50 an hour for those aged 25 or above) if they work at an average rate.
Disputes about employment status
The report recommends the introduction of an online tool which can be used to determine the status of the individual. Individuals should be able to get an authoritative determination of their employment status without paying any fee and at an expedited preliminary hearing. The burden of proof in employment tribunal hearings where status is in dispute should be reversed, so that the employer has to prove that the individual is not entitled to the relevant employment rights.
The report suggests employment tribunals should be required to consider the use of aggravated breach penalties and costs orders if an employer has already lost an employment status case on broadly comparable facts. Tribunals should also be permitted to award compensation uplifts if there are subsequent breaches against workers with the same or materially the same working arrangements.
Information about rights/employment contracts
The report recommends that the current right that employees have to receive a written statement of employment terms becomes a day one right, and should be extended to ‘dependant contractors’. This will be supported by a new stand-alone right to claim compensation if an employer fails to comply.
Holiday pay
The report recommends that ‘rolled-up’ holiday pay should be permitted for staff working irregular or casual hours. Their holiday pay should also be based on a 52 week pay average (not the current 12 week average).
Sick pay/long term ill-health
The report recommends the reform of statutory sick pay (SSP) so that it is explicitly a basic employment right for which all workers are eligible regardless of income from day one. It’s suggested that entitlement to SSP should be accrued on length of service, in a similar way to paid holiday currently.
The report recommends a similar approach to the right to return to work after maternity leave should be adopted for sick leave, with individuals having the right to return to the same or a similar job after a period of prolonged ill health (conditional upon engagement with the fit for work service).
Zero-hours contracts
Zero-hours workers should be granted the right to request fixed hours after 12 months. In addition, they should receive a higher rate of national minimum wage for any non-guaranteed hours worked. This will act a bit like an overtime rate and aims to encourage employers to reduce their reliance on zero-hours contracts and to compensate the staff for the uncertainty about working hours/wages.
Continuous service
The report recommends the extension, from one week to one month, to the break in work which will break continuous service. This would help those individuals who work for the same company over a long period of time but who have regular breaks in service (for instance because of school holidays or students during term time). It would also help those individuals who work on and off over a long period of time and who have breaks between assignments of longer than a week which aren’t due to there being no work available (for instance because work is assigned to other people). By allowing longer gaps between assignments to be bridged, these people will find it easier to accrue service and to access rights with a qualifying period.
We can assist you in preparing for the changes which may result from the report, should the Government decide to implement its recommendations. In particular, if you engage ‘self-employed’ contractors and are concerned about whether they may in fact be workers, we can provide you with a risk analysis and action plan to minimise the risk of their self-employed status being challenged.
