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GOOD WORK IF YOU CAN GET IT. MICHAEL DUGGAN QC ON THE TAYLOR REVIEW OF MODERN WORKING PRACTICES

The eagerly awaited Taylor Review of Modern Working Practices, otherwise entitled “Good Work” contains a plethora of recommendations to improve working practices and employment protection in the modern world of work. Michael Duggan QC considers the scope and challenges of the Review.

Taking in employment status, from apprenticeship to the gig economy, with a nod to atypical working, self employment, casual working and employment protection, there is something which will be of interest to everyone of working age (and beyond – there is passing mention of pensions). The Review sets itself up to meet the following three challenges:

  • Tackling exploitation and the potential for exploitation at work;
  • Increasing clarity in the law and helping people know and exercise their rights; and
  • Over the longer term, aligning the incentives driving the nature of our labour market with our modern industrial strategy and broader national objectives.

The second challenge will be of interest to employment lawyers and the Review has a lot to say about this. As one of its seven steps towards fair and decent work “The same basic principles should apply to all forms of employment in the British economy – there should be a fair balance of rights and responsibilities, everyone should have a baseline of protection and there should be routes to enable progression at work.”  The Review is as much concerned with Quality of Work as employment protection and rights are considered within the criteria of wages, employment quality, education and training, working conditions, work life balance and consultative participation and collective representation, the aim being to achieve “good work” for everyone.

Unsurprisingly, legal protections loom large and after considering different types of employment developments and trends  in Chapter 4, the Review turns its attention to ‘Clarity within the Law’ in Chapter 5 and the rest of the document.

Perhaps not the most helpful comment, given the case law over the last forty years, is that “Ultimately, if it looks and feels like employment, it should have the status and protection of employment.” The Review, nevertheless, grapples with how one should define such status. The definitions of employee and worker (section 230, ERA 1996) which are described as minimal should be given more clarity by “outlining in primary legislation, the high level criteria” such as control, mutuality and personal service, that need to be met. The criteria should not be so ambiguous that only a court can fully understand the basic principles. Secondly, legislation and guidance should provide more detail. Rather than rewriting the definitions, the Review suggests that the learning taken from case law should be clarified and encoded in legislation.

The Review considers “worker” status and suggests a new category; the “dependant contractor”, who is a person eligible for worker rights but not an employee. “The status of ‘dependent contractor’ should have a clearer definition which better reflects the reality of modern working arrangements, properly capturing those more casual employment relationships that are on the increase today – an individual who is not an employee, but neither are they genuinely self-employed.” The current three-tier approach should remain (employee, self-employed, dependant contractor/worker).

The Review is not impressed with ‘substitution’ clauses and thinks that Government should ensure that “the absence of a requirement to perform work personally is no longer an automatic barrier to accessing basic employment rights.” Instead, “greater emphasis on control and less emphasis on personal service will result in more people being protected by employment law.”

Further, to support flexibility in the gig economy the Government should adapt the Piece Rate legislation in the National Minimum Wages legislation, since “no individual should be expecting to be paid for all the time that he or she has the app open (regardless of whether or not they are seeking work). For instance, it would clearly be unreasonable if someone could log onto an app when they know there is no work and expect to be paid.”

The right to a Written Statement should exist from day one and be given to dependant contractors as well as employees. Further rights are proposed that will improve the lot of employees and workers:

  • Consideration by the Low Pay Commission of the introduction of a higher NMW rate for hours that are not guaranteed as part of the contract.
  • Extension from one week to one month, the consideration of the relevant break in service for calculating qualifying periods for continuous service and clarification of the situations where cessations of work could be justified.
  • Increased transparency of information which must be provided to agency workers both in terms of rates of pay and those responsible for paying them.
  • Promotion by Government of awareness of holiday pay entitlements, increasing the pay reference period to 52 weeks to take account of seasonal variations and give dependent contractors the opportunity to receive rolled up holiday pay.
  • A right to request a direct contract of employment for agency workers who have been placed with the same hirer for 12 months, and an obligation on the hirer to consider the request in a reasonable manner.
  • A right to request a contract that guarantees hours which better reflect the actual hours worked, for those on zero hour contracts who have been in post for 12 months.
  • Examination by Government of the effectiveness of the Information and Consultation Regulations in improving employee engagement in the workplace. In particular, it should extend the Regulation to include employees and workers and reduce the threshold for implementation from 10% to 2% of the workforce making the request.
  • New duties on employers to report (and to bring to the attention of the workforce) certain information on workforce structure.
  • The Government should require companies beyond a certain size to:
    1. Make public their model of employment and use of agency services beyond a certain threshold.
    2. Report on how many requests they have received (and number agreed to) from zero hours contracts workers for fixed hours after a certain period.
    3. Report on how many requests they have received (and number agreed) from agency workers for permanent positions with a hirer after a certain period.
  • Repealing legislation that allows agency workers to opt out of equal pay entitlements.
  • HMRC to take over enforcing basic core rights, notably holiday pay, for lowest paid workers.
  • The ability to get a ruling on employment status from a Tribunal without paying a fee.
  • A reversal of the burden of proof when employee or worker status is in dispute.
  • A simpler enforcement process.
  • Naming and shaming of employers who to not pay tribunal awards.
  • The use of aggravated breach penalties and costs orders if an employer has already lost an employment status case on broadly comparable facts – punishing those employers who believe they can ignore the law.
  • Allowing tribunals to award uplifts in compensation if there are subsequent breaches against workers with the same or materially the same working arrangements.

The Review also contains recommendations to bring the tax schemes for self employed and employees into alignment, to encourage self-employment and to support and protect the many forms of employment. In its final chapter, “Embedding lasting change” it is stated that

“The Government must place equal importance on the quality of work as it does on the quantity by making the Secretary of State for Business, Energy and Industrial Strategy responsible for the quality of work in the British economy.”

The Review is polemic; whether it is sufficient to address the issues and problems thrown up by the gig economy and current issues in employment law, such as agency workers, holiday pay and other rights, will ultimately depend on the appetite of the Government for the detailed legislation that is suggested.

 

12th July 2017

Posted: 11.07.2017 at 16:49
Tags:  Comments  Employment Law
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