Today, the government has responded to the recommendations of the "Good Work: the Taylor review of modern working practices" published last July (please see our previous alert for more details). The Good Work Plan sets out the government's direction of travel. However, there are only a small number of policy commitments and many of the Taylor Review's recommendations will be dealt with by way of further consultations - including in the key area of worker status.

The government has indicated it will:

  • introduce a right for all workers, including zero-hour and agency workers, to request "a more stable contract";

  • assist workers to enforce holiday and sickness rights;

  • introduce a new naming scheme for employers who fail to pay employment tribunal awards;

  • quadruple employment tribunal fines for employers showing malice, spite or gross oversight to £20,000 and consider increasing penalties for employers who have previously lost similar cases;

  • ask the Low Pay Commission to consider the impact of higher minimum wage rates for workers on zero-hour contracts;

  • define ‘working time’ for flexible workers who find jobs through apps or online so they know when they should be being paid; and

  • take further action to ensure unpaid interns are not doing the job of a worker.

The government will also launch the following consultations today:

  • Consultation on employment status

  • Consultation on enforcement of employment rights recommendations

  • Consultation on agency workers recommendations

  • Consultation on measures to increase transparency in the UK labour market

The government has stated that it has acted on all but one of Matthew Taylor’s 53 recommendations and all but one of the joint Work and Pensions and Business, Energy and Industrial Strategy Select Committees’ 11 recommendations. Unsurprisingly it rejected the Taylor Review's proposals to reduce the difference between the National Insurance contributions of employees and the self-employed. This follows it position following the Budget 2016 and it states there are no plans to revisit the issue.

What does this mean for employers?

Despite the fanfare, this is not a revolutionary overhaul of UK employment rights. A number of small reforms are to be introduced - including a right for zero hours workers to request a more stable working arrangement and welcome clarity over what is meant by an ‘intern’. However the key questions over ‘worker status’ are to be subject to yet another consultation so we may not even see any change in this parliament. The law over who is an employee (with full employment rights ), who is a ‘worker’ (with some employment rights) and who is genuinely self employed (with no employment rights) is notoriously unpredictable and has resulted in a string of test cases both in the ‘gig economy’ and other sectors - with cases turning on very legalistic points. Clarity on workers status is also important to ensure that people are paying the correct tax (whether they should be covered by PAYE etc.) and long term pension provision (whether they should fall with the auto enrolment pension rules). We will have to wait still longer for these issues to be addressed.


Matthew Taylor was commissioned by the Government to lead the review into how employment practices must change in order to keep pace with modern business models. The Taylor review was one of the most important and long awaited investigations into the UK employment market in recent years. Most notably, the review called on the Government to clarify the legislation on the issue of employment status and made various recommendations to help achieve this. However, it also covered wider issues such as proper taxation and pension provision for individuals who work flexibly.

In November 2017, two select committees (Work and Pensions and Business, Energy and Industrial Strategy) published a joint report and draft Bill designed to increase clarity on employment status. The report recommends that legislation should reflect the case law in this area, emphasising the importance of control and supervision rather than the right of substitution when distinguishing between workers and the genuinely self-employed. Among its other recommendations, a new model of “worker status by default” is suggested for companies with a substantial dependent workforce currently treated as self-employed.