The Taylor Review, now named the ‘Good Work’ Review, was published earlier this month. This review involved a review of the state of the current labour market in the UK and examined how new models of working have affected the freedom and rights of workers. Launched at the end of 2016, the review’s overriding ambition is that all work in the UK economy is fair and decent with a realistic scope for all workers of development and fulfilment. To this end, the review has made a number of recommendations for the Government to consider when examining the current legislative framework in the coming years.
The report begins by looking at the changes to the UK labour market over the past few decades. As we have reported on in previous blogs, the gig economy has sprung up over the last few years which has put this area of law into the spotlight.
By and large, employment law in the UK has developed in such a way that allows it to adapt to changes in the labour market. However, with particular regard to the often difficult question of employment status (and related rights), the review makes the valid point that legislation needs spruced up to provide greater clarity to employees and workers.
Employment Status
Presently, employment status is broadly split into three categories. An individual can either be an ‘employee’ which carries the most legal protections and rights, a ‘worker’ which carries only basic legal rights, and ‘self-employed’ which carries only minimal legal rights. The blurring of the line between these three distinct categories of workers as a result of the growth of the gig economy and other changes in the world of work is one of the key points made by the review.
The review suggests that the term ‘employee’ needs to be clearly defined in legislation. Previously, the term employee has developed primarily through decisions issued by the courts and there is little guidance in the legislation itself. The review recommends a number of factors which should be included in the legislation to better define an employee:
- Requirement of personal service by the individual;
- Control over the individual by the employer;
- Mutuality of obligations of employer and employee; and
- Whether or not the individual is carrying out a business undertaking.
Although this would seek to clarify the key aspects of who an employee is, there would still be some degree of uncertainty as any statutory definition would simply put the current case law position into legislation.
The report also goes on to suggest that the term ‘worker’ should be replaced with the term ‘dependent contractor’ for better clarity. It is highlighted that the category of ‘worker’ is helpful to allow basic protections to apply to less formal employment relationships. The review also suggests removing the requirement of a ‘worker’ to perform work personally and place more emphasis on control.
The difficulty in trying to define these terms in a specific way is that the modern workplace is not a uniform model, covers a myriad of working arrangements and regularly changes. It is debatable whether a statutory definition would be best suited to keeping pace with new working practices as time develops.
‘Gig Economy’
The review highlights that many individuals do enjoy the flexibility that is on offer from working in the gig economy, where employees can choose the jobs they wish to accept through online platforms. It suggests that ‘working time’, for the purposes of the national minimum wage, would have to be adapted so that individuals wouldn’t be paid from the moment they log in to an app where they know there is no work available.
Some of the other suggestions that the review made are:
- ‘Dependent contractors’ should have the right to a written statement of employment terms at the start of their engagement;
- The Government should look into bringing in a higher National Minimum Wage for hours that are not guaranteed in a contract, e.g. zero hours contracts, so that these workers receive a higher pay for working in a flexible arrangement;
- Increase the reference period for holiday pay from 12 to 52 weeks for casual and zero-hours workers (the default position is presently an average over the 12 week period immediately preceding the holiday);
- Develop the legislation to allow zero-hours workers to request guaranteed hours after a period of time; and
- Statutory Sick Pay to be reformed so that it becomes a basic employment right, similar to the National Minimum Wage.
As we have suggested in our previous blogs, the law on employment status is riddled with complexity and reforming the law in this area won’t be easy. This report does make some good suggestions for ways to simplify the law and it does provide some good analysis of the current labour market, however the changes will take some time to implement in practice (if they are adopted by the government/ parliament) and clarity in this area may be difficult to achieve.
