The Taylor Review of Modern Working Practices

The Taylor Review of Modern Working Practices was published yesterday. It covers employment practices in the UK and focused on the “gig economy” and employment status amongst other more general issues facing individuals and employers.

The reviews key recommendations are as follows:

1. The current three-tier status system consisting of:

a. Employee, benefiting from full employment protection;
b. Worker, benefiting from limited protection; and
c. Self – Employed, benefiting from no statutory protection

should remain in place. It is suggested the category of “Worker” should be renamed as “Dependant Contractor”. This will give an opportunity for the Government to review the definition of the “Dependant Contractor”. It is suggested that a greater emphasis should be placed on the element of control an employer has over the worker, rather than the current requirement to perform the work personally. It is not clear, however, how renaming “worker” will really benefit those individuals who often find themselves in that category, or where the cut off would be with levels of control and when someone tips into being an employee.

2. The additional element of control paves the way for the government to require Dependant Contractors to be paid the National Minimum Wage. The report makes clear the Government should be careful to maintain the element of flexibility for those who wish to work atypically, particularly in terms of working time. In practice it is not clear how this would work if the requirement for control is emphasised.

3. The Government is also advised to improve the clarity, certainty and understanding of all working people by extending the right to receive a written statement of terms of employment to Dependant Contractors as well as Employees. In order to further achieve this, it is suggested the government produce an online tool which employers and individuals can use to determine employment status in the majority of cases.

4. If a dispute arises between an employer and an individual as to status, the report suggests the Government should make it easier for an individual to obtain a determination from the court without having to pay fees. It is also suggested the burden of proof in these cases should be flipped onto the employer to establish that a certain relationship does not exist.

5. The report goes on to suggest tougher sanctions should apply to employers who choose to ignore the courts, either by non-payment of a financial order or failing to apply judgements to other relevant relationships within their workforce.

6. It is also suggested all workers should be eligible to receive Statutory Sick Pay from day 1 of their employment making it a comparable employment right to the National Minimum Wage.

7. Recommendations have also been made with regard to the tax system and how changes to modern working practices need to be reflected in a tax system with more purpose, including consideration of the number of individuals working on a “cash in hand” basis.

8. Finally, the report focuses on the national careers strategy and encourages the Government to focus attention on those in low paid and atypical work to ensure they are supported to progress. The Government is also encouraged to examine effective ways of ensuring self-employment is considered alongside other employment options.

These recommendations do serve to offer some further protections for working individuals, but of course they are subject to implementation by the Government, for which a timetable has not been set. It is considered, however, that the review does not necessarily go far enough in terms of adjusting the system to reflect the changing nature of working practice in the UK in 2017.

If you have any queries over employment status with your current workforce please contact the Ashtons Legal Employment team.