The much anticipated Taylor Review into the “gig economy” was published today. As anticipated, he recommends further protections for so called “gig” workers with insecure jobs such as driving for Uber, or acting as a courier whether for Deliveroo or the NHS. Such companies claim their workforce is a grouping of self-employed business people but a string of tribunal claims have found they are in fact ‘workers’ reliant on the one company for their income.
To begin, Taylor recommends enshrining criteria that define ‘employee’ into primary legislation; namely:
- personal service;
- control by the company;
- mutuality of obligation to provide and carry out the work.
It also suggests that employment status should become binary – ie that there should be employees and the self-employed, as there is in tax law, rather than have a third category of worker. This would allow employment and tax laws to become more aligned (which would be a relief as we constantly need to explain that there is a difference).
Confusingly having recommended binary status, the Taylor review then suggests that some of the concepts of worker may be useful to allow for employment protection in less traditional employment relationships and suggests calling these “dependant contractors”. In effect, this is a redrawing of the boundary, changing the name from worker, but using the same concepts in a different way.
Dependant contractors will therefore have worker status without “employment” rights, just as workers do now. The change to the existing laws suggested in the review is in fact a greater emphasis on control by the company, rather than on personal service. The idea being that these individuals are not employees, but are not free like truly independent contractors. There is not enough detail to say how this differs from the status of worker which already exists, save that this would be a UK concept, rather than a European one. It is however a concept which already exists in some other jurisdictions.
In order to address the question of digital platforms, Taylor suggests that the Low Pay Commission should look at a higher National Minimum Wage for hours that are not guaranteed, so businesses who use zero hour contracts, or low hours contracts pay more for the flexibility that gives them. It also suggests changes to holiday pay which would allow holiday pay to both be “rolled up” so that workers would get a pay premium on their hourly rate rather than the entitlement to paid leave. This arguably goes against the spirit of the Working Time Regulations, which were supposed to encourage staff to take rest not money. While this may be welcomed by businesses, legally this may be something which can only be achieved post Brexit, given workers under the current law are entitled to minimum holiday rights under the EU Working Time Directive.
The review also suggests the abolition of the “Swedish Derogation”, which allows agency workers to be paid less that their permanent peers. It also includes suggestions for statutory sick pay reform which will accrue based on length of service, and changes to laws on breaking continuity of service - changing the length of a break from one week to one month.
The key question is whether this new category will do anything for business that cannot already be achieved within the framework of existing laws. If the benefit of the “gig economy” is to allow workers the freedom to be flexible, to work when they want to and not when they don’t, and to have portfolios of jobs, there is currently nothing to stop businesses being flexible in return and pay holiday and sick pay.
So will introducing a new status benefit business? Maybe, through changes to holiday pay or through aligning tax and employment. However it is already possible to be self-employed for tax purposes, but have workers’ rights. It is also already possible to have very flexible employment and agree worker contracts which give both sides the benefits of the “gig economy” to allow companies and workers to flex working hours depending on their circumstances.
Yet another new status may do little more than create doubt and add the category of dependent worker to the confusion. If implemented it may therefore increase litigation. Litigation may further increase if the recommendation that individuals can bring claims on their worker status without having to pay a tribunal fee is accepted. If adopted this is the most revolutionary idea of them all: it may finally spell the death knell for tribunal fees given Taylor makes it clear that he believes fees should be abolished, but “regrets” the fact this is unlikely to happen in this parliament. Maybe this is an attempt through the back door?
A new status is unlikely to do little more than create more work for lawyers and let employers off the hook while cases are fought.