14 July 2017 by Bhavika Badola

Taylor’s Recommendations on employment status and the gig economy – does it strike a fair balance?

The RSA Chief Executive and former advisor to Tony Blair, Matthew Taylor, has now published his recommendations for modern working practices. This report is central to the Government’s agenda for change on employment status and its efforts to ensure that the UK is fit for the flexible demands of modern work.

What might be the impact of some of these recommendations and has the Taylor report struck a fair balance between flexibility and workers’ rights?

Recommendations

To support flexibility in the gig economy, Taylor recommends a renaming of some workers to “dependent contractor”, which is directly aimed at people working for the likes of Uber and Deliveroo.

Whilst the employment distinctions that we currently have will remain the same, the new dependent contractor label does mean that individuals (ie workers) will have basic rights, such as sick pay and holiday pay protected.

Further, those working in the gig economy can still enjoy maximum flexibility at the same time as being able to earn the national minimum wage (NMW). This will however be calculated by using a mean average hourly output rate.

The wider employment status recommendations will have a substantial impact on businesses particularly if the Government implements the following proposals:

  • day 1 rights to a written statement of terms including a description of legal rights to workers (as well as employees). Failure to comply could result in an individual’s standalone right to compensation;
  • gaps in employment service of less than one month will still count towards continuous service, which will give individuals greater legal rights depending on their length of service;
  • variable pay “reference periods” being calculated by way of a period of 52 weeks (not 12 weeks) to work out average holiday payments;
  • the burden of proof on employment status being flipped to the employer not the individual;
  • far-reaching enforcement powers, such as:
  • HMRC taking responsibility for enforcing basic set of core pay rights that apply to all workers such as, NMW, sick pay and holiday;
  • Tribunals imposing aggravated penalties for employers that do not apply rulings on employment status to similar groups of workers;
  • allowing uplifts in compensation where an employer commits subsequent breaches based on similar working arrangements;
  • giving the Department of Business, Energy and Industrial Strategy the power to pursue enforcement of Tribunal awards and impose penalties for non-compliance.

For full details please read the Taylor Report.

What next?

The recommendations are receiving mixed responses. A balance has been struck between individuals and business but is it fair? Our overall view is that it is too early to tell but what is clear is that there is a huge amount for businesses to do if, these recommendations are to become part of UK employment law.  For now, the debate on employment status is far from concluded and will continue.

If you would like to discuss the impact of the Taylor Report on you or your business or any other employment law issue affecting you, please contact one of our solicitors in the Employment team here.

30 June 2017 by

The General Data Protection Regulations (“GDPR”) – is your business prepared?

On 25th May 2018 the General Data Protection Regulations (“GDPR”) will become effective in the United Kingdom. Their purpose is […]

7 July 2017 by

Trustees’ duties clarified by the court

Two recent court cases serve as a warning to trustees that they must properly account to their beneficiaries and that […]

Signup To Our Weekly e-News

"*" indicates required fields

We’ll never share your details with any third party in line with our privacy policy.