The Taylor Review is out. The report looks at modern working practices in the UK, but the main focus is on the so-called gig economy. So, what does the report recommend, and what do the experts think?
The review focuses on flexibility, increasing the quality of work and improving the clarity of current legislation.
As for the ‘gig economy’, Taylor suggests that the government has to make legislation clearer and increase clarity so the basic principles can be understood by all. The three existing statuses – employee, worker and self-employed – should be retained with a new name of “dependent contractor” covering workers who are controlled and supervised by the business. Under this label, workers will receive worker employment rights, including holiday pay and rights to rest breaks, and businesses should class these workers as employed for tax purposes.
The report also suggests that a free tribunal system should be introduced to allow individuals to find out what their status is whilst encouraging the government to review tribunal fees in other areas.
Recognising the importance of zero-hours contracts for those requiring flexibility, the review does not go as far as banning these but, instead, recommends that those on these contracts for 12 months should have the right to request fixed hours. Taylor also suggests that the Low Pay Commission should be tasked with examining how a higher rate of minimum wage could be applied to those with non-guaranteed hours to ensure they are not unfavourably treated unfairly due to the insecure nature of these contracts.
Theresa May has announced the government will study the report carefully and will respond later this year.
Alan Price, Director at Peninsula Employment Law, said: "For many employers, the introduction of a new name for those who have worker status will not be helpful as it appears to introduce another status at a time when many are struggling to apply the tests on a practical basis. Additionally, introducing another level of the National Minimum Wage for those on non-guaranteed contracts will increase complexity of minimum wages at a time when non-compliance is high due to a lack of understanding about the current rules. The request for clarity and making legislation clearer is a must and the government should heed this call to ensure the determination of status, and the application of employment rights, can be carried out by businesses correctly without the need for a tribunal to determine this."
Adam Hale, EVP of Sage People, said: "Thanks to the rise of the gig-economy, we’re finally seeing this discussion on the front page and we must act - people-centered technology can help to integrate gig economy workers into teams and ensure they are properly protected. We’ve been talking for years about the 'employee experience' when it comes to managing people, but we must now look at the wider 'workforce experience'. After all, the dynamics between retained employees and gig economy contractors will dictate the nature of the future workforce.”
Kathryn Dooks, Employment Partner at Kemp Little LLP said: "Taylor’s proposals on hours of pay, the minimum wage and statutory sick pay risk undermining the rights of employees and workers in the wider workforce in unforeseen ways. They will be complicated to administer and are bound to lead to even more tribunal litigation. Focussing on the level of control a company has over its staff will be highly fact-specific and is likely to generate even more tribunal litigation. The key issue is the enforcement of these rights: the government’s employment tribunal fees policy means that legal action is too costly for most gig economy workers to contemplate. The report proposes that employment tribunals would determine worker status questions for free, as a preliminary aspect of any case. This only solves part of the problem: the individual would still need to pay Tribunal fees at a later stage. The report therefore calls on the government to consider reducing the cost of employment tribunal fees but in reality, the government is unlikely to back-track on this policy.”
