Matthew Taylor's much anticipated report on modern employment practices has been published today. Whilst the review does not have any legal status in its own right, it is likely to form the basis for future legislative reform of employment structures.
The review was commissioned to consider the employment law implications of new forms of work – particularly short-term, casual or 'gig' working, facilitated through online platforms or apps. It also took a broader look at what it called 'good work' in general. The report focusses on seven key areas for promoting 'good work'.
1. A national strategy should be directed at providing "good work for all", with taxation arrangements more consistent across the different forms of employment.
2. Innovative platforms for engaging staff work well and should be retained; but there should be clearer categorisation.
The three tier structure of 'employee / worker / self-employed' should be retained but the definitions should be reviewed.
A key recommendation is that the existing 'worker' category should be re-named 'Dependent Contractor' – this will describe individuals who are not eligible for full-blown employment rights, but are eligible for worker rights. In developing the 'dependent contractor' test, there should be more emphasis on the question of control and less emphasis on the right of substitution. It is felt that re-focussing the definitions in this way will broaden the coverage of employment protection, as a genuine substitution clause can easily defeat the right to employment protection. As the report puts it: "[I]f it looks and feels like employment, it should have the status and protection of employment."
Rather than introducing a raft of detailed legislative changes to implement these proposals, the report suggests revised high level legislation, complemented by guidance which can be adapted to meet the changing needs of the labour market.
The report also suggests that
- the government develops an online portal to assist with determining employment status
- there should be no tribunal fee for employment status cases; and
- the burden of proof in such cases should fall on the employer.
3. The report acknowledges that there is already a significant burden on employers, in terms of additional, largely non-wage, costs associated with taking someone on as an employee – the report calls this the 'employment wedge' - and this should not be increased.
4. The report suggests that the best way to achieve "better work" is not national regulation but responsible corporate governance, good management and strong employment relations.
5. Individuals should feel that they have the ability to improve their future work prospects and develop their learning at work.
6. A more proactive approach to employee well-being should be adopted.
7. The National Living Wage (NLW) should be supported so that individuals do not feel that they are restricted to only ever earning the minimum NLW.
The report does not recommend that zero-hours contracts should be banned; it acknowledges that this model can work well for organisations with fluctuating demand and for individuals seeking flexible work – but the report suggests that employers should be incentivised to provide certainty of hours and income as much as possible.
Please click here to read the full report.
We will provide a more detailed overview and analysis in this month's edition of our employment law update, Employment Eye.