News & Insights

A step closer to good work?

We report on the implications of the Government response to the Taylor Review of Modern Working Practices.

Earlier this month the Government responded to the Taylor Review of Modern Working Practices. Following the publication of the original report in July last year we reported on the recommendations. These mainly focused on the implications of new forms of work such as the gig economy, worker rights and general challenges facing employment practices and law in the UK. Now the Department for Business, Energy and Industrial Strategy has issued a press release setting out how the government intends to respond.

The reaction, as expected, has been mixed. The government has approved the introduction of day one rights including holiday and sick pay entitlements for workers which has been greeted positively. Zero-hour workers will also receive basic rights such as payslips for the first time.

On the other hand significant criticisms include the fact that the Government will not be taking forward the Review’s proposals concerning expedited hearings and a reversal of the burden of proof in employment status cases (meaning, for example in the context of an employment status dispute, it will still be down to the claimant (individual) to prove they are an employee, not the employer to disprove it) nor its proposals regarding rolled-up holiday pay, as the ECJ has held this to be unlawful. Some critics have also stated the Government has missed a chance to reform National Insurance.

The Government fails to address concerns around ‘employee’ and ‘worker’ status and has made this issue the subject of further consultation. The Government has indicated that it is keen to develop an online tool to help employers correctly classify its staff, but this is unlikely to be a complete solution to the uncertainty.

Many of the announcements relate to enforcing or clarifying existing laws, rather than new legislation. The Government want workers to know their rights (including their right to national minimum wage, sick and holiday pay) from the outset and HMRC will enforce these rights to make sure workers receive what they are entitled to.

The Government considers that many of the proposals in the Review require further consultation. The four topics to be covered are enforcement of employment rights recommendations; agency workers recommendations; measures to increase transparency in the UK labour market; and employment status.

Taylor has commented that although there is much more to be done “the Government response to my Review is substantive and comprehensive. It will make a difference to vulnerable workers and that is what matters most”.

There is currently little in the response that will concern many employers at the current time, but we would advise you to keep track of developments (which we will cover in future editions) and to seek advice if you have concerns about the status of your self-employed contractors.

For the full response please click here.