The long-awaited government commissioned review into modern working practices has been published. The Taylor Review sets out seven principles for good work and contains specific proposals that they wish to be enacted. Below sets out a summary of the important recommendations.
To many employers this is an important and uncertain, area of law that has been made more prolific due to the ‘gig economy’. Taylor’s review recommends the government should make legislation in this area clearer and use secondary legislation to increase certainty in the status ‘tests’. This clarification will help employers to determine their staff’s status correctly, and apply the correct rights, without the need for tribunal intervention.
The review suggests keeping the three distinct employment statuses – employee, worker and self-employed – whilst creating a new name for workers who are controlled and supervised by a business. These ‘dependent contractors’ will receive worker rights, such as holiday pay and rest breaks, and should be paid an average of 120% of the National Minimum Wage based on their output. This additional name could counteract Taylor’s intention by confusing employers and making the definition of staff more uncertain.
Flexibility in work
The review recognised the importance of flexibility in work, both for employers and workers themselves, whilst emphasising the need for worker to be treated fairly.
Not going as far as the Labour party’s pledge to ban zero-hours contracts, the review suggests the introduction of a statutory right for zero hours workers to request a guaranteed hours contract once they have been in a role for 12 months. The starting point for guaranteed hours will be an average of weekly hours worked over the previous 12 months.
The report also suggest agency workers should have a statutory right to request a direct contract of employment from a hirer when they have been engaged with a hirer for 12 months, creating certainty around their continued employment. Any requests should be considered in a reasonable manner.
Taylor recommends tasking the Low Pay Commission with examining whether a higher rate of National Minimum Wage should apply to workers with non-guaranteed hours. Whilst this suggestion does allay financial worries for those in insecure roles, an introduction of another pay level when many employers are struggling with the current rules around payment of minimum wage could lead to further wage confusion.
The Review recommends a free, expedited tribunal process is introduced to determine employment status issues with the burden of proof reversed, i.e. the employer will have to prove the individual is not the status they are claiming.
The review also suggests there should be a presumption that a successful individual will receive their costs back when they win a tribunal claim, tribunal fees for all claims should be reviewed and the government should introduce costs orders to punish employers who have already lost a status claim.
Theresa May has announced the government will review the report in full and respond in detail later on this year.
Although the Prime Minister used the Queen’s Speech to announce their intention to use the report to steer the government’s employment law plans, this may depend on whether others are in agreement with the minority government.