The Taylor Review of Modern Working Practices has now been published. Having considered the implications of new forms of work on workers’ rights and responsibilities, as well as on employers’ freedoms and obligations, it has made a number of recommendations, including:
- The three status approach – employee, worker and independent contractor – is retained but with the intermediate ‘worker’ category re-designated as ‘dependent contractor’ and self-employed re-designated as ‘zero hours’ with a recommendation for a new simpler, clearer statutory delineation between the three categories to give a greater level of certainty and understanding of what employment status applies.
- The category ‘dependent contractors’ is intended to capture those who have ‘worker’ status but don’t have ’employee’ rights. They would be entitled to basic protection (eg national minimum wage (NMW), paid holiday (or the right to enhanced pay in lieu) and other existing ‘worker’ rights, such as whistleblowing protection and the right to rest breaks), and to a written statement at the start of their engagement. Dependent contractors will have the right to earn the NMW if they choose to do so based on the ‘output work’ (piece rate) in the NMW legislation, which would be adapted so if dependent contractors chose deliberately to work at a time of low demand they would lose that entitlement.
- There will not be a ban on zero hours contracts but after 12 months an individual will have the right to request a guaranteed hours contract. Similarly, agency workers engaged by a hirer for 12 months will have the right to request a direct contract from the hirer which must consider that request in a reasonable manner. In addition, the ‘Swedish derogation’ (which allows agency workers to opt out of equal pay with permanent employees and instead receive a minimum level of pay between assignments) should be abolished.
- Steps should be taken to ensure taxation is consistent across all forms of employment and to align the employment status and tax status frameworks.
- There shouldn’t be an explicit extension of workplace consultation/representation (except for widening the rules on entering negotiations about establishing workplace representatives when 2% of employees request it (currently the threshold is 10%)) but an acknowledgement of the importance of strong employee relations and responsible corporate governance.