Christmas Day for Employment Lawyers

Posted on: July 13th, 2017

The Taylor Review ‘Good Work’ Report

If you have any connection to the world of employment law or HR you will have been well aware of the Taylor Review of Modern Working Practices which was launched at the end of 2016 to consider the implications of new models of working.

Those involved in the GIG economy (on both sides of the cyber fence) have certainly been keenly awaiting the outcome. As have Employment lawyers who have been comparatively deprived of much exciting new legislation to talk about in recent years.  Sure Gender Pay reporting was big news and the continually developing holiday pay case law saga also punctuated the normal day to day fare of employee relations issues but real revolutionary change at statutory level has been thin on the ground.

So much like little children in the run up to Christmas we have constantly talked about it, speculated what we might get and hoped desperately that it might be worth the wait. Of course, there was some self-interest in this but much more importantly it was patently obvious that the current rules are outdated and often result in confusion and uncertainty which ultimately benefits no-one.

The big heavy present delivered by Santa in the guise of Matthew Taylor on 11 July was snappily titled the ‘Good Work’ report. In true festive fashion after un-packaging the contents we are confronted with a very mixed bag of the genuinely new (a shiny bike), the practical but necessary (socks) and the huge anti-climax (lump of coal).

There is so much contained in the 115 pages it is simply not possible to cover it all in a bulletin so instead we wanted to pick out a few of the highlights which have been playing on loop in the collective CM employment team’s mind like classic Only Fools and Horses episodes.

The new (aka the shiny bike)
A key focus of the report was stated to be ensuring all work in the UK economy is fair and decent. Taylor said this meant those on lower incomes needed routes to progress, should receive proper benefits and that ‘flexibility’ should not be one sided. To achieve this, alongside a general overhaul of the law around determining status, he has recommended a mix of new rights and greater ease of enforcement. For many, it is these new rights and the method of enforcement that is the most eye-catching.

Specifically extending the right to a written statement of terms to workers as well as employees from day one and requiring the employer to include a description of statutory rights is genuinely new and will be seen by some as progressive but others as unduly onerous.

Similarly giving agency workers the right to request a direct contract and those on zero-hours contracts the right to request guaranteed hours both after a 12 month period would inevitably impact upon current practice in some way. As will the requirement for larger employers to report on their overall workforce structure so this is transparent. Of course, what form the offer which must be made will take and how information is to be collated and presented will be key.

Also entirely new would be an amendment to National Minimum Wage rules so that GIG economy workers can be paid by reference to the output of the work they do when undertaking that work through an app.

Almost flying slightly under the radar is the linked recommendations that claimants be allowed to bring a claim to the ET without paying a fee to determine their employment status as a preliminary issue along with a shifting of the burden onto the employer to prove the claimant is not an employee if a dispute arises. Both are significant and would make it much easier for individuals to bring and win claims. Inevitably this will focus the minds of the engaging business and remove some of the deterrent factor for claimants which the introduction of ET fees brought.

Needless to say, how shiny these particular bikes are depend on which side of the cyber fence or otherwise you sit on but either way they are potentially game changing.

The practical but necessary (aka socks)
Pretty much everyone agreed the rules need updating so the proposal to amend legislation so that case law principles are reflected in legislation itself is welcome but obvious.

The proposal to align the tax regime and employment status and make the decision of one binding on the other, instead of the 2 different systems we have now, is clearly sensible and would increase efficiency.
Increasing the reference period for calculating holiday pay (where pay is variable) to 52 weeks from 12 will also give a truer and therefore fairer picture. By also allowing rolled up holiday pay in certain cases should create flexibility over payment.

A consideration of increasing the rate of National Minimum Wage for all hours worked which are not guaranteed would also be likely to motivate businesses to only operate on this model when it really needs and is likely to be welcomed by individuals.

The anti-climax (aka lump of coal)
The much discussed potential new category of employment status known as ‘dependant contractor’ has actually turned out to be a proposed renaming of the current ‘worker’ category. As a result, it is unlikely to change much except for the vernacular. Specifically the report recommends there should be no shift to a binary employed or self-employed regime (which is currently the case for tax purposes) nor is there seen to be any need for a fourth category.

The recommendations that more emphasis should be placed on the principle of ‘control’ when assessing the correct employment status (which would be self-employed, dependant contractor or employed) is clearly aimed at the GIG economy and could have interesting results beyond just this sector. Likewise the removal of the requirement for workers to have a contract to perform work personally is very much targeted at the genuine but deliberate inclusion of substitution clauses designed to defeat worker status and would definitely see a change in practice and precedent documentation. Now you may well be shouting that these therefore sound more likely a shiny bike rather than disappointing coal. However, until we actually see any legislation and understand the extent of the change we have actually learned very little.

Boxing Day
In keeping with many a family Christmas gathering the result of all this hype and excitement is ultimately a large sugar crash, some simmering tension which was temporarily brought to the surface and nobody entirely happy. Indeed, the Unions appear most unimpressed that this does not go far enough, whilst we are also aware that SME representatives feel the requirements which would be placed upon them could be unduly burdensome. Those businesses at the cutting edge of the GIG economy already feel slightly ‘got at’ and will have taken some solace from parts of the report. Particularly, the calls for a total ban on zero hours contracts were ignored. However, there is much contained in the report which does have the potential to cause a rethink of their models. 

Inevitably, on the basis that a lot of primary and secondary legislation plus guidance will all have to be written even if the report’s recommendations are implemented we will at some stage all be getting together to do it again.

Whatever your own opinion the full report is well worth a read and can be seen here.