On 21 July we reported that the Taylor report into employment practices had been published. These proposals were on a range of issues but most headline worthy was the topic of employment practices within the gig economy. Recommendations included the reform of employment law in relation to worker status and introducing a third category to be known as ‘dependent contractors’. It was expected that the government would launch a consultation on the proposals it made later this year.
However, it has been released today that any reforms will be delayed until next year. It is not clear exactly why this is the case; some sources have cited Brexit negotiations and others have referenced parliamentary opposition. This will be disappointing for the app-based companies operating within the UK’s gig economy who will have been hoping for some better news.
It is estimated that around 1.1 million people do gig work in Britain, predominantly as taxi drivers, delivery couriers and in on-demand trades. The lack of certainty in this area will undoubtedly be causing problems for financial forecasting in terms of both increased labour costs, estimated at 20% if self-employed contractors are upgraded to worker status, and potential legal costs. The ongoing legal battle faced by Uber, which recently lost its appeal on the status of its drivers, provides a valuable case study on the great cost that can accompany these issues.
Given the breadth of recommendations made by the report it is not only gig economy businesses that will be affected by the delay. Issues covered by the report ranged from holiday pay to agency workers to tax. We will keep you updated and when these consultations take place but if you have any questions about employment status in the meantime, contact your dedicated Employment Solicitor today.