Clifton Ingram

Government review into employment practices

The results of a long-awaited Government review into employment practices were released in July in ‘Good Work: The Taylor Review of Modern Working Practices’. The review does not recommend a wholesale change in the law but it does propose various tweaks to it in order to achieve its vision of a “good quality work for all”.    

Currently there are three different categories when it comes to employment status – employee, self-employed and the hybrid category of worker.  The Report’s headline recommendation is that the “worker” category be renamed “dependent contractor” to better distinguish workers from those who are truly self-employed.  A typical example of a dependent contractor is a so called “gig economy” worker.  Suggestions include:

  • Giving dependent contractors the right to a written statement of terms of engagement in the same way that employees have the right to a written contract of employment.  This right would be from day one for both categories (currently employers have two calendar months in which to issue a contract to an employee) and it is also suggested that the statement should include a description of the individual’s statutory employment rights
  • There should also be a stand-alone right to compensation if the engager/employer has not provided the written statement of terms
  • Treating dependent contractors as “employed” for the purposes of tax status

Away from the gig economy, there were other suggestions in the Report that are relevant to employees, for example:

  • Increasing the rate of the National Minimum Wage for hours that are not guaranteed by the engager/employer and the preservation of continuity of employment where any gap in employment is less than one month (rather than the current one week).
  • Consider allowing flexible working requests to cover temporary as well as permanent changes to contracts
  • Allowing for holiday pay to be paid on a rolled up basis (provided there are safeguards to ensure that individuals did not simply work 52 weeks per year as a result)
  • Giving zero hours workers the right to request guaranteed hours after 12 months
  • Giving HMRC enforcement powers in relation to holiday pay and sick pay as well as National Minimum Wage issues
  • Reforming the Statutory Sick Pay regime so that SSP is a basic employment right and so that it accrues from day one and is based on length of service (like holiday entitlement).
  • Improving the way in which an individual’s return to work after long-term sickness absence is managed, with employers doing more to support those able to return above and beyond the current obligation to make reasonable adjustments
  • Giving individuals a right to return to work following long term sickness absence so that they do not lose their job or see their long-term career damaged through sickness absence (similar to the current right to return about maternity leave)

It will be interesting to see how the proposals are implemented in forthcoming legislation and whether the “dependent contractor” category will simplify or complicate further what is already a difficult issue for some employers.

For more information on these, or any other Employment Law issues, please contact Alison Gair or Robert Cherry