REWARD INSIGHT
What does the Taylor review mean for employment
Danny Done, managing director at Portfolio Payroll, reviews some of the proposals
T he final version of the Taylor review on modern employment practices has been published. The review was initially commissioned by the Conservative government to assess whether legislation is applicable to new ways of working and, if not, whether the law needs changing or whether understanding of the law needs improving. The final review contains around thirty employment law proposals with the effectiveness of some key areas of law analysed. Employment status has been in the spotlight over the past few years due to an increase of tribunal claims from those carrying out work in the ‘gig economy’. Many of these claims are falling on the side of the individual with the tribunal applying a number of employment status tests to find that these are actually workers and not self-employed contractors, as claimed by the companies. Unsurprisingly, the Taylor review calls for the government to make legislation clearer to remove uncertainty and the current ambiguity around the status test. The review suggests that the current three distinct statuses should be kept; however, those who are not employees but are eligible for worker rights should be called ‘dependent contractors’ with the test for this status focusing on whether the business controls or supervises their work. Dependent contractor rights will be the same as worker rights, i.e. they should receive paid annual leave and minimum rest break entitlements, but they should receive a written statement of their main terms on the first day of their engagement and their pay should be based on their output and the number of tasks they’re
performing. As a minimum, the review suggests that an average worker should receive 120% of the national minimum wage. The issue of flexible and insecure work has also been a hot topic in employment law for a number of years, helped by the increasing use of zero hours contracts and the spotlight on a number of companies that have been publicly accused of abusing these. The Taylor review does not go as far as the Labour party’s pledge to ban these contracts but does recommend a right to request guaranteed hours. This statutory right will be available to zero hours workers after they have worked in a role for twelve months with the start point for the number of guaranteed hours being an average of the weekly hours worked over the previous twelve months. As well as zero hour’s workers, the review tackles the security of agency workers. It suggests introducing a statutory right to request a direct contract of employment from their hirer when they have been engaged with the same hirer for twelve months. The hirer should be obliged to consider this request in a reasonable manner. In addition to creating security around flexible job roles, Taylor proposes the Low Pay Commission should be tasked with examining whether a higher rate of national minimum wage should apply to those working non-guaranteed hours. Whilst this proposal counteracts the negative financial implication of not working guaranteed hours, this will lead to further uncertainty regarding the application of minimum wage laws.
Matthew Taylor comments that making changes to the law will only be effective if the law can be enforced by workers. As such, the review proposes creating a free, expedited tribunal process to determine employment status claims with the burden of proof being reversed (i.e. in the future the employer will have to prove the individual is not the status they are claiming). There should also be a standalone right to claim compensation for a failure to provide a written statement of main terms; currently two to four weeks’ compensation will only be given where the claim is made alongside another successful tribunal claim. The review also recommends that the government should use costs orders, uplifts in compensation and aggravated penalties to punish employers who have ignored the law and previous court rulings. This will apply where an employer has already lost a previous status case on broadly similar facts. Taylor also wants a presumption that the claimant will receive their costs of bringing a claim when they are successful, unless there is a strong justification to not reimburse them, and for enforcement against employers who do not pay tribunal awards to be made simpler. The review suggests that simpler enforcement should not require the individual to fill out any extra forms, pay any fees or start extra court proceedings. Although these proposals are wide- ranging and positive, they do not bind the government to introduce these changes. Prime minister Theresa May has announced that the government will review the report in full and respond in detail later on this year. The biggest hurdle for introducing these changes will be whether there is enough support for the minority government to pass these through Parliament. n
...focusing on whether the business controls or supervises their work
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| Professional in Payroll, Pensions and Reward | September 2017 | Issue 33
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