Published: 13 July 2017
Matthew Taylor’s Review of Modern Working Practices, or colloquially ‘Good Work’, was finally published this week. As part of a collaboration with Greg Marsh, Diane Nicol and Paul Broadbent, Taylor sought to consider three challenges: Firstly, tackling exploitation at work; secondly, to increase clarity in the law and inform individuals of their rights and how to exercise these; and finally, to align incentives driving the nature of the UK labour market with a modern industrial strategy and broader national objectives.
The Taylor Review tackles zero hours contracts and notes that, while disparaged by some, zero hours contracts are by their nature flexible and beneficial to those looking to learn while they earn. According to Taylor, 18% of people with these contracts are in full-time education, and the flexibility offered can work for both businesses and individuals.
The Review also contains specific measures in relation to worker status, which would, allegedly, create greater protection and certainty of the rights afforded to each group. The Taylor Review recommends that the Government sets out a clear test for employment status, with primary legislation reflecting current case law providing the key principles, and secondary legislation as guidance. The suggestion is to redefine and replace worker in the current system, introducing a new triad of worker status, being employee, ‘dependent contractor’ and self-employed. The test for ‘dependent contractor’ would focus largely on the control that a business has over an individual, rather than placing emphasis on personal service. However, it is recognised that it is important to maintain the flexibility offered by the so-called gig economy. For instance, in relation to the entitlement to receive national minimum wage, working time will need to be defined and calculated fairly. The Taylor Review recommends that the Government adapts piece rates legislation, allowing those working in the gig economy to be compensated based on their output, for example the number of jobs completed. This would mean that ‘dependent contractors’ would not be paid national minimum wage for each hour logged on an app when there is no work available.
To increase certainty, the Taylor Review also recommends that the right to a written statement be extended to ‘dependent contractors’, a right only currently afforded to employees, which should be provided to both employees and ‘dependent contractors’ on the first day of work. This would be coupled with the ability to bring a stand-alone claim for failure to provide a written statement of terms in the Tribunal, which can currently only be brought as a ‘piggy-back’ claim. The Taylor Review also suggests treating ‘dependent contractors’ as employed for the purposes of tax. The Review also recommends introducing a mechanism where potential claimants can have their employment status determined by the Employment Tribunal without having to pay tribunal fees; a recommendation aimed at securing greater access to justice.
The need for the law to adapt to changing working practices and technology is a strong theme throughout the Taylor Review. The gig economy, whereby people can use apps to sell their labour, such as via Deliveroo or Uber, is noted as one of the key labour market challenges ahead. Again, however, the Review recognises this type of flexible working may be attractive to young people. These businesses should not be reformed to the point that they become unappealing or impractical, however it is key to ensure adequate protection is afforded to those providing services.
With the potential added complications of Brexit, it remains to be seen how the Government will approach the current challenges and need for reform in UK employment law, however the Taylor Review certainly provides an indication and food for thought.