The Taylor Review, commissioned by the Conservative government in October 2016, was published last week.
It sets out a number of recommendations to government aimed at improving modern working practices by responding to the changing labour market in which we find ourselves.
We consider and comment on some of the report's key recommendations.
The review proposes keeping the current three tier system of employee, worker and self-employed, but renaming the worker category "dependent contractors", with a clearer definition.
Whilst improving clarity on employment status can only be a positive move, the new category of "dependant contractor" would have an unintended domino effect. The statutory definition of "worker" already has different meanings across various pieces of legislation, all of which would need amending and streamlining. This would be a complex and time consuming task, with the existing definitions potentially unsuitable for the complex range of jobs that now exist within our economy.
The introduction of an online tool for individuals to determine their employment status and associated rights has also been suggested by the review. Whilst this would be an interesting use of technology, it is unclear how its results could be more than an indicator of status given that the authoritative determination of employment status is reserved for the employment tribunal.
To compensate platform workers based on their output, the review proposes amending the national minimum wage piece rates legislation. This legislation was developed to calculate an average base rate of pay for agricultural workers. As such, great care would need to be taken to adapt it to accurately apply to platform based workers, who are working in an altogether different and highly complex sector.
Written statement of particulars
The proposal to extend the requirement to provide a written statement of particulars to dependant contractors as well as employees (including the statutory rights the individual is entitled to) would improve transparency between the parties from the outset. This positive step would both reduce the risk of conflict and the tribunal time in resolving disputes.
Zero hours contracts
The review's proposal to introduce a higher NMW rate for hours that are not guaranteed as part of the contract (to incentivise employers to schedule guaranteed hours) is a sensible suggestion that would work to protect such workers from exploitation. As is the proposal to give zero hours workers who have been in post for 12 months the right to request a fixed hours contract.
Agency workers would be protected by the proposal to introduce a right to request a direct employment contract where they have been placed with the same hirer for 12 months. They would further be protected from exploitation by the suggested removal of the legislation which enables agency workers to opt out of receiving equal pay to permanent employees of the hirer.
The proposals to increase the reference period used to calculate holiday pay for those not on normal hours from 12 weeks to 52 weeks is a sensible step to produce a fairer result for workers experiencing significant peaks and troughs across the year. Indeed a 12 month reference period would accord with recent holiday pay case law and should more accurately result in holiday pay which reflects "normal remuneration".
It is also proposed that dependant contractors should be given the option to receive rolled-up holiday pay rather than take their holiday. Current government guidance prevents such practice. However, it is anticipated that businesses and workers whose working arrangements mean that electing to be paid for their holiday is preferable to taking it would welcome this change. Indeed this proposal may serve in reality to legitimise a practice that is already taking place for those workers that would fall into the new "dependent contractor" category.
The proposal to reform Statutory Sick Pay so that both employees and dependant contractors would be entitled to it from day 1 would both simplify the existing rules as well as encourage greater attendance at work in the early stages of employment.
Good work for all?
The goal of the Review is "good work for all". It remains to be seen whether this moral ambition can be achieved. Much will depend on how the government responds to the Taylor Review's recommendations and whether it will act as a springboard for changing modern employment practices in the UK. Theresa May has indicated that the report will be studied over the summer and a detailed response should be expected later this year. However, without a majority government, it may be some time before these recommendations become reality.