Towards the end of last year, Theresa May appointed Mr Matthew Taylor (a former adviser to Tony Blair) to head up a review of modern working practices. He was asked to consider whether our current laws are ‘fit for purpose’, having regard to the modern, flexible and diverse way in which people earn a living.
Mr Taylor’s report was published, to some fanfare, on 11 July 2017. In an effort to save you the job of reading all 115 pages yourself – surely life’s too short – I have put together this thumbnail sketch of what it’s all about.
What’s he trying to achieve?
In a nutshell, Mr Taylor’s ambition is to ensure that all work in the UK economy is “fair and decent”. Who could possibly disagree with such an admirable ambition? Of course, a report of this nature needs to come up with concrete proposals, as well as high-minded ideals. In the remainder of this article, I will set out some of the more significant policy ideas that Mr Taylor advocates.
Clarity of status
It might seem strange, but lawyers and judges can still struggle to agree on who is an employee and who is not. Add into the mix the fact that as well as ‘employees’ and the ‘genuinely self-employed’, we also have the intermediate legal status of ‘worker’, and it can all become very confusing. If employers categorise people wrongly, the implications for both the business and individual can be significant. Look no further than the high-profile claims recently brought against Uber, CitySprint and Pimlico Plumbers for evidence of this!
Having considered submissions from a wide range of interested parties, Mr Taylor is inclined to retain the 3-tier status system currently in place. However, he recommends introducing:
- a new and more detailed statutory definition of what amounts to ‘employment’ (to be supplemented by regulations and guidance, where appropriate);
- the term ‘dependent contractor’, as an alternative to ‘worker’; and
- a definition for ‘dependent contractor’ that focuses on the level of control exercised over the person concerned, reducing the potential for businesses to wrongly categorise people as self-employed.
Mr Taylor has also recommended unifying the way in which we categorise people for both employment law and tax purposes.
Where disputes arise regarding a person’s status, Mr Taylor suggests that Employment Tribunals should be in a position to make swift determinations, without the claimant having to pay a fee. The burden of proof should be on the business to substantiate the status of the individual.
Clarity of terms
Mr Taylor has recommended that businesses should be required to provide a written statement of main terms and conditions to both employees and ‘dependent workers’ from day one of their engagement. Businesses that fail to provide such statements would open themselves up to claims for financial compensation.
Mr Taylor has suggested that the Low Pay Commission consider whether employees on ‘zero hours’ contracts (or contracts with few guaranteed hours) should be entitled to a higher national minimum wage. He has also advocated looking at novel ways in which fair rates of pay can be calculated for workers in the ‘gig economy’. For example, could their pay be calculated by reference to their output, rather than the time spent working (so-called piecework)? There are already provisions within the national minimum wage legislation that allow for this. However, they may require some tweaking, in order to apply them to the novel working arrangements that we see nowadays.
Mr Taylor has recommended allowing businesses to provide casual workers with a ‘rolled-up’ rate of pay, inclusive of their normal basic pay and any accrued holiday pay. In this way, they would receive holiday pay as they go along, rather than when they actually take their leave. This is a practice already widely used in relation to casual workers; the problem is that it does not currently comply with the provisions of the Working Time Regulations 1998.
New ‘rights to request’
Mr Taylor suggests that agency workers who have worked on the same ‘assignment’ for 12 months or more, should be entitled to request a direct contract of employment with the business for which they work. In a similar vein, ‘zero hours’ workers should be entitled to request a contract with guaranteed hours after 12 months’ service. Mr Taylor is not the first person to suggest such measures; will he succeed where others have failed?
So what now?
Many organisations have been quick to criticise Mr Taylor’s report. Unsurprisingly, business groups have suggested the measures go too far, whilst trade unions feel they do not go far enough. Of course, reports of this nature are only as good as the efforts made to implement their findings. Some commentators are already questioning whether Mr Taylor will garner sufficient political support to turn his ambitions into government policy. When politicians of all persuasions are so distracted by ‘Brexit’, what are the chances of Theresa May (and friends) finding the time or the inclination to roll out the sorts of policies that Mr Taylor has in mind?
I remain unconvinced about the chances of many (if any) of the Taylor recommendations being put into practice any time soon. However, I would be very happy to be proved wrong!
Head of Employment