Taylor Review…what does it all mean?

So the Taylor Review into current and modern working practices and Britain’s employment was released yesterday. We thought we’d break down the full 116 page Report into what you need to know or be aware of.

What does it all mean?

Here’s the stats for starters:

  • Part-time working
    • Nearly 26.2% of total employment
    • Self-employed more likely to be part-time than employees
    • 4% of part-time workers couldn’t find full-time hours
    • 7% do not want a full-time job
  • Self-employment
    • 15% of total employment in 2016
    • Joinery, plumbing and construction are the biggest sectors
  • Zero hour contracts
    • 8% of total employment are on zero-hour contracts
    • 16-24 year olds account for a third of total zero-hour contracts
    • 18% of those on a zero-hour contract are in full-time education – these contracts allow them to balance working and studying
  • Gig economy
    • Unknown how many people are working in the gig economy
    • Unknown whether people work in the gig economy to supplement their income or if it is their only work

These are the highlights from the Report:

  • ‘The Review has heard evidence that the current employment status framework and the rights of individuals under each status are difficult to understand’ (pg. 26)
  • ‘The challenge for Government is to balance access to flexibility with suitable protection for those workers that may be more vulnerable to exploitation.’ (pg. 28)
  • Challenges for the labour market ahead:
    • Poor real wage growth – ‘average weekly earnings remain below their 2008 level’ (pg. 28)
    • Poor productivity – ‘improved productivity will rely on a number of things, not least investment in infrastructure, improved skill-levels, more technological advancement and delivery of the modern industrial strategy.’ (pg. 28)
    • Jobs to match the skills profile – ‘The proportion of graduates working in low-skilled jobs increased from 5.3% in 2008 to 8.1% in 2016.’ (pg. 28)
    • New business models (e.g. gig economy) – ‘this type of work is particularly attractive to young people; with 1 in 4 people aged 16-30 saying that they would consider some form of gig working in the future, again highlighting the potential for gig working to grow quickly.’ (pg. 28)
    • Automation – ‘widely varying predictions around the number of jobs that could be lost to automation.’ (pg. 29)

What’s wrong?

The Taylor review suggested there was a lack of clarity for both employers and employees around employment status and therefore employment rights.

For the vast majority of people in employment this is more straightforward as they are employees, however the growing changes in labour markets are blurring some areas such as in the gig economy.

The Report found that others working in employment law feel the current legal framework works well and is flexible enough to handle the current changing landscape however they found that the interpretation of the law varied widely.

Please have a look at the Report’s suggestions for a new approach and legislative change below.

What should change?

 The wish list on Employment Status & Rights

  • Make legislation clearer
  • Employment status needs to be more distinct – less ambiguous and open to interpretation so you don’t need a court to decipher it
  • More protection for people working under significant control
  • Introduction of ‘dependent contractor’ – in a new three tier approach – who are eligible for “worker” rights but not employees
  • Not being required to provide the service personally should not hinder access to employment rights – emphasis on control rather than personal service
  • Adaptation of piece rates for ‘dependent contractors’ and people working in the Gig economy –compensated with NMW based on their output
  • ‘Self-employed’ should mean the same from an employment and tax perspective – cross-jurisdiction in court also
  • Statutory requirement of a written statement on day 1 of the job for employees and ‘dependent contractors’
  • Develop legislation that assesses what needs to be met to be an employee or ‘dependent contractor’
  • For employers in the gig economy to maintain maximum flexibility while those working within it access NMW legislation
  • Develop an online tool to provide clear advise on employment status and rights
  • Low Pay Commission to advise on the effects of bringing in higher NMW for non-contractually agreed hours
  • Preserve continuity of employment where any gap in employment is less than one month, currently at one week
  • Agency workers should receive information on rates of their pay and who is responsible for paying them
  • Increase awareness regarding holiday pay, especially regarding accruing it, and increase the calculation period to 52 weeks, as opposed to 12
  • Verified approval ratings for those working in the gig economy should be transferable across gigs, third parties and platforms
  • Further promotion of genuine flexibility should be considered as part of the statutory evaluation of the Right to Request Flexible Working taking place in 2019 for example the possibility of flexible arrangements on a temporary basis for caring needs
  • Legislation on pregnancy and maternity protection should be consolidated and available in one place. The Government should start with a cultural change around pregnancy and maternity discrimination and move to concrete action should this change
  • Health and Wellbeing in the workplace needs to be improved through a collaborative approach across Government departments
  • SSP should be available from day 1 of employment as an explicit and basic employment right. The employer should pay it based on length of the employee’s service – similar to holiday pay
  • Employees who have been on a long term absence due to a long term health issue should be granted the same entitlement to have their job protected for a period of time when away from work, similar to employees on maternity leave so they can return to the same or similar role.

The wish list on Enforcement and Employment Tribunals

  • Enforceable changes to the law – tribunal fees continue to hinder access to Employment Tribunals
  • Whether policing umbrella companies with regard to agency workers should be considered by the new Director of Labour Market Enforcement
  • Legislation allowing agency workers to opt out of equal pay entitlements should be repealed
  • NMW, sick pay and holiday pay should be enforced by HMRC more responsibly
  • Individuals should be able to understand their employment status without the need for legal fees and at an expedited preliminary hearing
  • With regard to status disputes, the burden of proof should lie with the employer rather than the individual, as is current practice now, and they should prove why the person is not entitled to relevant rights
  • Action against employers or engagers who have not paid Tribunal awards should be enforced in a more simple process without the need for the employee/worker to fill out extra forms or pay extra fees
  • Introduce a name and shame scheme for employers when they don’t pay awards within a reasonable time
  • Obligation on Tribunals to consider using aggravated breach penalties and cost orders when an employer has already lost an employment status case with comparable facts

 The wish list on Employee Engagement

  • Improve employee engagement by reducing the threshold to implement Consultation of Employees Regulations (essentially a staff forum) from 10% to 2% of the workforce making the request
  • The Government should work more closely with Acas, Trade Union and other bodies to promote developing employee engagement
  • Develop proposals around transparency of workforce structures with regard to corporate governance

 The wish list on Self-Employed

  • Continue with the proposed NI changes in the Spring 2017 Budget to close the gap between self-employed and employee NI contributions
  • Use technology to facilitate self-employed people to come together and discuss employment issues and work with employers to positively encourage this
  • Explore opportunities for better pension provision for self-employed
  • Government should continue to partner with providers to help self-employed people have access to online tools supporting their compliance with tax payments

 The wish list on Apprentices & Internships

  • The apprenticeship levy should be reviewed with regard to atypical working, e.g. agency workers and disparities in the take up of apprentices by differing groups should be addressed
  • Unpaid internships should be eradicated through clearer interpretation of the law and enforcement action

The Report also states the Government should identify metrics to quantify the success of improving work and report on the quality of work in the UK on an annual basis.

It’s over to the Government to consider and implement now!

For advise on employment status and rights, or any employment law issue, please contact our employment lawyers on 01892 773970 or email info@lochassociatesgroup.co.uk

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