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Good work for all: the Taylor Review and the potential effect on employment laws

View profile for Susan Mayall
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The Taylor Review makes recommendations on a multitude of employment law issues and seeks to establish “good work for all”.

On 11 July 2017, Matthew Taylor, chief executive of the Royal Society of Arts, published his independent review of modern working practices: Good work: the Taylor review of modern working practices (the Review).

At 115 pages, the Review is a weighty tome and not for the feint of heart! It has however, been long-needed and considers a number of important issues that go to the heart of employment law issues and rights.

If the Government implement the proposals, it will mean a shift of approach to work and potentially far reaching changes to employment law. In particular, employers would need to re-assess the status of workers who work in non-conventional ways, to ensure they are given the full rights and benefits to which they are entitled.

What does the Review deal with?

Mr Taylor and his team considered the implications of new forms of work (such as those in the “gig economy”) on worker rights and responsibilities, as well as on employer freedoms and obligations. They also sought to address the challenges facing the UK labour market.

The Review recommends specific measures in the short term as well as arguing for a longer term strategic shift. It calls for us as a country to sign up to the ambition of all work being good work – and that this should be a national priority. The Review also acknowledges that:

  • the most important factors that determine people’s work experience lie in their relationship between employers and managers and employees;
  • most employers understand the value of good employment practice;
  • national policy should not put extra burdens on those already acting responsibly but support good practice.

Three challenges ahead

In setting out the recommendations, Mr Taylor and his team focussed broadly on three challenges:

  • tackling exploitation and the potential for exploitation at work;
  • increasing clarity in the law and helping people know and exercise their rights; and
  • over the longer term, aligning the incentives driving the nature of our labour market with our modern industrial strategy and broader national objectives.

Seven principles for fair and decent work

The Review outlines seven steps towards fair and decent work with realistic scope for development and fulfilment. These steps encompass the principles of:

  • good work for all;
  • protecting those who may not be able to work in conventional ways (possibly by redefining “worker” as “Dependent Contractor”);
  • encouraging transparency and corporate governance, good management and strong employment relations within the organisation;
  • enhancing training opportunities;
  • promoting a more proactive approach to workplace health; and
  • while acknowledging the importance of the National Living Wage, ensuring that workers can progress in the future.

The “Gig Economy” and the need for changes to employment laws

Mr Taylor and his team carried out their review in the context of a rapidly changing workplace - against a backdrop of the digital age and the emergence of the “gig economy” and flexible working.

In the gig economy, thousands of people now take on individual pieces of work and get paid for the “gigs” they take on rather than work for specified hours as a paid employee. This allows more control over hours and flexibility for both the worker and the employer but there are a number of downsides. In particular, such gig workers are not classed as employees.

The legal distinction between independent contractor/employee/worker is important: an independent contractor pays no national contributions and has no legal protection against unfair dismissal. They receive no redundancy payments and are not entitled the minimum wage never mind sick or holiday pay. A worker has some protection and has a right to a holiday entitlement and the minimum wage for example. An employee is fully protected by UK employment law.

These distinctions have caused many disputes about the nature of the work carried out. The dispute between Uber and its drivers as to whether they are employed as an employee or self-employed as a worker is one example.

The Report seeks to address the important issues that arise from these independent contractor/worker/employee distinctions and makes recommendations about how the law could change to ensure that employment rights can be protected. The recommendations are far reaching and deal with many aspects of employment law including holiday pay, hours, continuity of employment and the national minimum wage. They propose, for example:

  • maintaining a legal distinction between workers and independent contractors but rename as “dependent contractors” workers who are not employee as well as placing more emphasis on control as a factor when defining worker status;
  • giving those who work on zero hours contracts the right to request guaranteed hours after they have been working with the company for 12 months;
  • updating statutes to reflect the common law set out in court decisions – such as the law that defines “employees” and “workers”;
  • giving workers a right to a written statement of terms, to be given on the first day of employment, which should include a description of their statutory rights;
  • allowing claimants free access to tribunals to decide on their employment status and giving the burden of proving that status to the employer.

Government to respond

The Taylor Review has taken ten months and involved numerous public hearings, round-table discussions, speeches, challenges and feedback. Its goals and recommendations are ambitious and, if accepted by the Government and implemented into our laws, will change the nature of employment law. There is still plenty of work to do – not all of the recommendations are in their final form.

The Government must now consider the recommendations and give their views. The report is also expected to help the Government finalise its industrial strategy.

We must now wait and see what the Government thinks about the proposals. But don’t hold your breath - the on-going Brexit negotiations will be taking priority and it may be a little while yet before we hear the government’s thoughts on the Review.

You can read the full review here

Contact

For more information on employment law issues, contact Susan Mayall on 0161 684 6948 or make an enquiry.

Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers LLP or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.