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Government responds to Taylor Review

Employment Law & HR

The Government has published its response to the “Good Work” Taylor Report, suggesting it will accept 52 of its 53 proposals. The review was launched in 2016 and headed by Matthew Taylor, Chief Executive of the Royal Society of Arts. Mr Taylor was tasked with evaluating working practices in the UK over the past 20 to 30 years, and reporting on areas for reform.

The Government has stated its commitment to taking forward the recommendations, exploring legislative options where necessary. Some of the practical steps it plans to implement are:

  • Developing an online tool for determining employment status. This will likely be similar to the tool used by HMRC to establish employment status for tax reasons. As with the HMRC tool, it may not be able to establish status with the certainty of an employment tribunal decision but should give employers some guidance.
  • Extending the right to a written statement of terms and to receive a payslip for all workers, including casual and zero-hours workers.  All workers will also be able to request a more stable employment contract.
  • Exploring the option of applying a higher rate of National Minimum Wage and National Living Wage to hours that are not guaranteed under contracts. The Low Pay Commission has been asked to explore this option and report back in October 2018.
  • Enforcing existing rights and making those who are entitled to sick pay and holiday pay aware of this fact. HMRC would be able to enforce this against employers and review their practices in this area without a complaint from an employee, much in the same way as they enforce NMW and NLW.
  • Increasing employment tribunal fines so that employers who have shown malice, spite or gross oversight could be fined up to £20,000. The Government also intends to simplify the process of enforcing Tribunal awards and to introduce a ‘name and shame’ scheme for employers who do not pay Tribunal awards.
  • Targeting sectors where unpaid interns are doing the job of a worker and not being appropriately compensated for this. The Government does not have plans to create a legal status of intern but does plan to introduce new guidance on unpaid internships and to ensure they are being paid the NMW or NLW when they are entitled to it.
  • Making changes to the current regulations around agency workers to increase transparency. This might include repealing laws that allow agencies to employ staff on cheaper rates under the “Swedish derogation” rules. 

The Government has set up four consultations to take these recommendations forward. However, trade unions have expressed doubt that these measures will have any impact on the individuals operating within the gig economy and working on zero hours contracts. They claim that it won’t prevent individuals being taken on under the title of self-employment which, when this is a sham agreement, sacrifices the rights they are entitled to.

It would appear that there is still a long road ahead for employers operating in the gig economy and relying on flexible working arrangements to successfully run their businesses before they can regain any degree of certainty on the future of their employment practices. However, we will keep our clients updated as and when there are any legislative changes. If you have any questions about what the Government’s recommendations might mean for your organisation, do not hesitate to get in touch with your dedicated Employment Solicitor.

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