PAYROLL INSIGHT
Review of modern working practices
Helen Hargreaves MSc ChFCIPPdip, CIPP associate director of policy and membership , reveals the government’s response
O ver the last few months we have written several articles about the progress of Mathew Taylor’s review of modern working practices. This high-profile review, which has attracted much media attention, explored the implications of new forms of work on employee rights and responsibilities and on employer freedoms and obligations. The review also included views from workers and employers working in sectors such as the ‘gig’ and rural economies and manufacturing. The aim was to fully understand the impact of modern working practices and how different labour markets work. In July 2017, Good Work: The Taylor Review of Modern Working Practices (https://bit.ly/2q4SFCm) was published and duly discussed in most newspapers and television news programmes. The report was 116 pages long and covered a range of issues, including the implications of new forms of work, the rise of digital platforms and the impact of new working models on employee and worker rights, responsibilities, freedoms and obligations. Amongst the 53 recommendations in the report were several key elements impacting on payroll. Labour market framework Perhaps the biggest and most challenging section of the review addressed the UK’s existing three-tier approach to employment:
Aligning employment status and tax status Few of us would disagree with the review’s finding that the lack of alignment between a worker and the self-employed in employment law and employed and self-employed in tax law is a source of confusion for organisations, individuals and the wider public. And whilst there are reasons why employment status legislation and tax status legislation are not at the moment aligned, the Taylor review was hopeful that the suggested approach to employment status would help to bring these two systems closer together and create clearer boundaries. In simple terms, the report suggested that when designing a new tool for determining status, the dividing line should be between the new dependent contractor status or self-employment so that being employed for tax purposes naturally would mean an individual is either an employee or a dependent contractor. And whilst self- employment is not an employment status, the government should aim for ‘self- employed’ to mean the same for both employment rights and tax purposes. Modern working The issue which attracted most media interest was the concern that modern day flexibility of the workforce only benefits business and not the individual. Issues considered by the review included workers
l employee – entitled to a full range of employment protections l self-employed – employment protections do not apply l worker – a relative safety net for those who are neither employees nor self- employed, ensuring that this group of more casual workers are protected by a set of baseline rights such as the national minimum wage (NMW). ...a fresh look at the legislation to introduce clarity for both employers and individuals... The report acknowledged the confusion that exists between the two categories of people who are eligible for ‘worker’ rights, suggesting that it should be made easier to distinguish from one another by the introduction of a new name for those categorised as workers but who are not employees: dependent contractors. The report concluded that the government should take a fresh look at the legislation to introduce clarity for both employers and individuals so that everyone can understand what employment status applies and what rights an individual is entitled to.
| Professional in Payroll, Pensions and Reward | May 2018 | Issue 40 20
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