The Taylor Report: What change for Employment Law?
When Matthew Taylor was commissioned by the Government to conduct a review, he was asked to look specifically at long-standing existing laws applied against the backdrop of modern and emerging methods of working such as the gig economy, zero hours contracts, agency work etc.
His 116 page report was recently published, setting out the need for a fresh look on employment law to make it fit for modern purpose.
Taylor begins his report by creating seven principles for “good quality work for all”:
- The ‘British Way’ should be directed towards the goal of ‘good work’ for all;
- The flexibility provided by platform based working e.g. via online apps, should be protected whilst ensuring fairness for those who use them;
- The law should help businesses make the right choices and help individuals know their rights;
- Responsible corporate governance and good management is more effective than laws;
- People should feel they have realistically attainable ways to strengthen their future;
- There should be a more proactive approach to workplace health and wellbeing;
- The National Living Wage should be accompanied by sectoral strategies to ensure people are not stuck at the living wage minimum.
Taylor’s recommendations were wide ranging, spanning areas such as employment status, sick pay, minimum wage, written contracts and enforcement. In this article, we’ll consider those in relation to employment status and agency workers. Part 2 of this series will contain Taylor’s plans on sick pay, flexibility for workers including zero hours and changes to the tribunal system.
- Whilst the three current employment statuses (employee, worker or self-employed) should remain, the category of ‘worker’ should be renamed ‘dependent contractor’;
- The difference between the statuses should be made clearer. Ambiguity must be removed so that determination of employment status is not open to interpretation;
- Clarity can be helped by confirming in legislation the tests used to determine status rather than relying on case law.
Taylor went on to recommend that dependent contractors should:
- Have the right to receive a written contract in the same way as employees, but which sets out the employment rights specific to them. This contract should be provided on the first day of work, whether it be for employees of dependent contractors (currently, employers have 2 months to provide the contract);
- Be able to receive rolled up holiday pay.
The Agency Workers Regulations give agency workers rights to be treated the same as people who were recruited directly by the company where the agency worker is placed. One of these rights is to receive the same basic pay as a direct recruit after 12 weeks on assignment unless the agency worker is on a ‘pay between assignments’ contract. Taylor has suggested removing this exception, meaning that all temporary agency workers would have rights to equal basic pay after 12 weeks.
Interestingly, this measure was included in the General Election manifest for the Labour Party.
Secondly, agency workers should be able to request a direct contract with the hirer after 12 months on assignment. Employers would be under a duty to consider the request in a reasonable manner.
These recommendations show that there is no broad brush approach to changing the law – several small technical points have been put forward in the report to even out the distribution of employment protection to all.
Zero Hours Workers
Workers whose contract permits their employer to give no minimum guarantee of weekly working hours should be protected, according to Taylor, by the following measures:
- A right to request a guaranteed hours contract where non-guaranteed work has been provided for a period of 12 months. Where this happens, the number of hours to be guaranteed in the contract would be the average number worked per week over the previous 12 months;
- Examination of whether a new bespoke minimum wage should be introduced. The rate would apply only to those with non-guaranteed hours with a dual purpose of discouraging employers from engaging people in this way and also compensating the workers more favourably.
Sickness Absence and Pay
- The Statutory Sick Pay (SSP) regime should be overhauled and made available to all eligible workers from the first day of employment regardless of their income;
- It should be accrued on length of service similar to annual leave accrual so that employers are not faced with paying what can be substantial SSP payments to people who have only worked with them for a short time;
- People on long term sick leave should have a right to return to the same job similar to the system currently used for maternity leave;
- Employers should facilitate a return to work after sickness absence above and beyond the current reasonable adjustment duty for disabled employees.
Flexibility For Workers
- The law currently requires a one week gap between periods of employment to break continuity of service. Taylor recommends increasing the gap to one month meaning that employers would have to wait longer before bringing an employee back in order to trigger brand new employment;
- Casual workers currently have their holiday pay calculated over the 12 week period prior to the holiday. Taylor has suggested this be increased to 52 weeks.
- Claimants should be able to win financial compensation if their employer has failed to give them a written contract. This is not currently available;
- There should be a presumption that a claimant falls within the status they are claiming at Tribunal to be. It should be for the employer to provide evidence that they are not; the ‘burden of proof’ should not be on the claimant;
- Extra penalties should be levied against an employer who is taken to tribunal repeatedly for the same complaint;
- Successful claimants who do not then receive the award from their employer should not have to go through as much red tape to try to enforce receipt of payment.
Taylor also made recommendations on the removal of Employment Tribunal fees which are now, following recent developments, redundant.
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