NEWS
The Government has published the eagerly awaited ‘Good Work’ report setting out the findings of the Taylor Review of Modern Working Practices (the "Review"). The aim of the Review, which was led by Matthew Taylor, was to consider how employment practices and the current legislative framework needs to change in order to keep pace with new business models, (including sharing and gig economies).
DETAILS
Described as the ‘heart’ of the Review, the report focuses on the relationship between employers and the people who work for them – with a single overriding goal of good work for all. To achieve this, the report sets out seven policy approaches.
One such approach focuses on increasing clarity in the law, following the introduction of new, innovative forms of work and changes in the labour market.
The Review has found a compelling case for greater clarity in determining employment status, recommending that the Government replaces the existing law with a clearer outline of the tests for employment status.
The distinction in employment status is significant as it determines which rights and responsibilities arise between the individual and the business. At present there are three categories of individuals providing their services on the job market: (1) employee; (2) worker; or (3) self-employed independent contractor. Despite strong suggestions that the existing approach to employment status be aligned with the tax system which provides only for a choice between employment or self-employment, the report rejected this proposal favouring instead the retention of the status of ‘worker’ - to be renamed as ‘dependent contractor’.
'Dependent contractors' would form a smaller category of people, who would be eligible for ‘worker’ rights, but who would not be employees. In addition, in recognition of the current ambiguity in the definition of ‘employee’ and ‘worker’ the report recommends that greater emphasis should be placed on the principle of ‘control’ exercised by employers over their staff in determining dependent contractor status. To provide for maximum clarity on status and rights of all individuals, the report also suggests extending the right to written particulars to 'dependent contractors' as well as employees; developing a free online tool providing individuals with an indication of their employment status; and making it easier for individuals to get an early determination of their employment status from the employment tribunal without paying any fee.
Whilst recognising the importance of flexibility in enabling businesses to respond to changing market conditions, the report also makes a number of proposals with a view to ensuring that flexibility is genuinely a mutually beneficial agreement for both parties. The proposals include:
The report not only focuses on changes to legislation but also on good management and strong employment relations within organisations, highlighting that both workers and self-employed contractors must have an effective voice in the workplace. To action this, the report suggests reviewing the existing information and consultation regulations and developing digital solutions to enable workers to be heard and to facilitate forms of collective action.
COMMENT
Simon DeMaid, Partner, comments: “Overall the Good Work report appears to be well-balanced, addressing the need to ensure that individuals’ basic employment rights are protected whilst recognising the requirement for employers to be able to adapt to changing market conditions. It will be interesting to see how the Government responds to the recommendations and observations in the report, particularly given that it remains unclear what the new definition of 'dependent contractor' will actually look like.”
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