The long awaited Taylor Review of Modern Working Practices has been published.
Matthew Taylor, the Chief Executive of the Royal Society of Arts, was commissioned in October 2016 to look at how employment practices need to change in order to keep pace with modern business models.
The resulting report, which is 115 pages long, has been given the title “Good Work”.
That title reflects the fact that whilst the Report may have been prompted by the development of new forms of labour such as gig work it has considered what makes “good work” and has identified some of the factors that are valued by individuals, for example, worthwhile rewards; security; training; development and two-way communication.
The numerous recommendations that are put forward intend to promote good work principles and address the changed working practices.
Some proposed changes appear aspirational. The current statutory definition of employment status is described as “excessively vague”. The Report’s proposal is to rectify that by amending the legislation so as to define whether the individual would be an employee or self-employed or worker (or ‘dependent contractor’ as it is suggested this class should now be known). How would that be possible when the key principle from the case law is that each case depends on its own facts?
Other recommendations are much more specific, for example providing a right for both employees and dependent contractors to have a written statement on day one, setting out both their terms and statutory rights. Where there is a dispute it is also recommended that they have free access to the Employment Tribunal for a declaration as to their employment status prior to bringing any claim.
Some recommendations are directed specifically to the terms on which individuals are engaged. Zero and fixed hours workers would have a higher rate of pay – a new national minimum wage rate – for all those hours not guaranteed under their contract.
It also suggests that zero hours workers should be able to request a contract with guaranteed hours after 12 months of work which would be based on their average hours. Similarly an agency worker would be able to request a direct contract with the end user after a 12 month engagement.
However it’s worth remembering that a right to request is not a right to be given.
A more telling change for agency workers may be the proposal to abolish the ‘Swedish Derogation’ which allows agencies to avoid matching end user pay by employing agency workers in a way that allows for pay between assignments. Whether the associated increased costs will deter use of using agency workers may have to be taken into account though.
The proposal that holiday pay should be allowed to be paid on a ‘rolled up basis’ will be widely welcomed as a means of avoiding a number of complications in the way that holiday pay is administered for atypical workers. It is a practice that has been declared unlawful under the EU Working Time Directive although it is a means of payment that many already use in order to simplify the payment process for casual work arrangements.
Another welcome change would be the proposal to amend the statutory sick pay scheme. The unusual position of statutory sick pay is recognised as it had until recent years been regarded as a quasi-state benefit the cost of which could be recovered by the employer. Since the recovery of costs is no longer possible it is proposed that the right to sick pay should like other basic rights accrue with service. Avoiding the potential risk a new recruit would have to be paid up to 28-weeks sick pay.
It is proposed that the enforcement procedure for sick pay, like national minimum wage, should rest with HMRC. Controversially though it is recommended that their powers of enforcement are extended to also cover holiday pay.
The Report contains many more recommendations, including proposals for new aggravated penalties and uplifts in compensation against repeated employer breaches. Find out the details behind these and the other recommendations at our forthcoming national programme of HRXchange Autumn Update presentations.
This blog post was written by Christopher Davies. For further information, please contact:
Christopher Davies, professional support lawyer, Employment
T: 0161 836 7936