As you may have read, Matthew Taylor has published his eagerly awaited Government commissioned review into ‘Modern Working Practices’ (the Review), which can be found here in full.
First, do you have to change any of your employment practices or procedures right now?
No, you do not. As the Guardian explains in the linked article, the Government will consider the Review and assess whether to pass legislation putting these recommendations into effect.
The 116-page Review can be approached from various angles. Its first recommendations relate to ensuring employment quality – for example, fulfilment and work-life balance. That is only partially a legal matter. The Review also touches various areas of law, such as tax. Below are a few of the Review’s recommendations that touch on substantive employment law:
1. Factors relevant to employment status are enshrined in legislation. Currently, legislation leaves these definitions wide open and they have been developed through case-law in courts and tribunals. Once the Government defines the various employment statuses in legislation, it should be easier to discover the relevant factors.
Don’t expect litigation on this issue to disappear however: there will always be borderline cases where it is difficult to define the individual’s status.
2. The Review agrees with the current three-tier approach to employment status. However, it suggests changing one term. Currently, we have ‘employee’, ‘worker’ and ‘self-employed’. The Review suggests changing ‘worker’ to ‘dependent contractor’ to improve clarity. People working under a large degree of control and working via a larger company’s platform are likely to be considered workers. ‘Dependent contractor’ is a good way of thinking of such workers.
3. The Review suggests that some changes will need to be made to the definition of working time for ‘platform workers’ – i.e. people working in the ‘gig economy’ who are defined as workers because they operate on a platform. The problem it highlights is that individuals should not be able to log on to their app at a time they know will be quiet for the purpose of being guaranteed minimum wage.
4. The Review is not against zero-hours contracts, and acknowledges that casual work often benefits both employers and employees. However, in some circumstances, it benefits the employer far more than the employee. To address that, the Review suggests that minimum wage for such contracts should be increased.
5. The Review suggests that individuals should be able to opt to be paid rolled-up holiday pay, instead of taking actual holiday. At the moment, you can only pay in lieu of holiday on termination of employment. That is so that workers and employees are not encouraged to work instead of taking holiday, though it accepts that safeguards will be needed.
One difficulty with the final suggestion is that the European Court of Justice (ECJ) has ruled that in most circumstances, holiday must be guaranteed – they see it as a health and safety issue. Until Brexit actually happens, that is likely to be a massive stumbling block. But even after, there is a suggestion that we will retain most EU employment rights.
Does the Review herald radical changes in employment rights? My initial reading is that it does not, and indeed Labour and trade unions have criticised it for not going far enough in its concrete suggestions. In any event, much work will now be required to transform these recommendations into concrete rights, and they may be dependent on how Brexit develops.
Accordingly, for the time being, it’s business as usual. But you should expect some changes in the not too distant future.
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She [Theresa May] said the government would carefully study his recommendations, which include ensuring workers in the gig economy have sick and holiday pay, the possibility of a higher minimum wage for non-guaranteed hours and a new definition of “dependent contractors” to stop companies wrongly claiming their workers are self-employed.