The Taylor ‘Good Work’ Report of the gig economy: the key points
Partner Debbie Fellows discusses the key points from the recent Taylor 'Good Work' Report.
The report, Good Work: The Taylor Review of Modern Working Practices, published on 11 July 2017, was commissioned by the government to address increasing concerns around workers’ rights in the context of the gig economy, the use of zero-hours contracts, and new business models. The report recognises the importance of retaining a dynamic and flexible labour market but makes certain recommendations aimed at clarifying an individual’s employment status and rights. The report’s key recommendations are set out below:
- Renaming workers who are not employees ‘dependent contractors’ but keeping the distinction between employees and workers. Taylor proposes changing the name of a “worker” to “dependent contractor”, not creating a fourth status of employment. It is unclear why different terminology is necessary and if this were implemented it would result in a large volume of re-drafting of existing employment legislation.
- More emphasis should be placed on control than personal service in determining worker status to ensure that fewer employers are able to use substitution clauses and that more workers are consequently covered by employment rights.
- Change the law relating to national minimum wage (NMW) to state that NMW should not be paid when a worker is logged onto a platform but there is no work available for them. There is a suggestion that platforms should indicate how much work there is available when a worker logs onto the system and therefore what the potential earnings for the period of work would be. A piece rate should be applied although it is suggested that the worker should take responsibility for logging onto the platform at times when labour outstrips demand.
- Look at the effect of increasing NMW for those on contracts which do not guarantee a minimum number of hours. This would ensure that employers pay more to their workers for the benefits of flexibly engaging them.
- Ensure that it is clear that workers should be provided with a written statement on the first day of their job. This should include the statutory rights that they will be entitled to. If the employer does not provide this on the first day of work, the worker has a right to compensation. This seems very restrictive.
- Increase the gap for continuity of employment from the current period of one week, to one month to allow for longer breaks to occur without employment rights being lost.
- Increase the average pay reference period for those not on normal hours from twelve weeks to fifty-two weeks in order to allow continuity and fairness in holiday pay.
- Workers should be given the choice of whether or not they want to be paid rolled up holiday pay. This would mean that a workers hourly pay would be topped up by their hourly holiday pay (12.07% of their hourly pay). Example: an individual on national living wage would receive £8.41 an hour instead of £7.50. However, the result of this is that there would be no pay available should the worker go on holiday.
- Agency workers and zero-hours’ workers should be able to request a contract of employment which better reflects the hours that they generally work after being with the same employer for 12 months or more. It is important to note however this is simply a right to request which may be viewed as a somewhat “toothless” right.
- All workers should be entitled to receive statutory sick pay during a period of illness. The length of time during which SSP will be payable will be determined by the length of service to the employer and will be accrued in a similar way to holiday rights.
- The burden of proof should be reversed in employment tribunal hearings so that the employer has to prove that employment rights are not applicable to the worker, rather than the worker having to prove that the rights are applicable.
The report has attracted much criticism with TUC general secretary Frances O'Grady stating: "From what we've seen, this review is not the game-changer needed to end insecurity and exploitation at work." On the other hand others have welcomed Taylor’s recognition that the UK’s flexible labour market is a great source of strength and competitive advantage. It is clear that balance between job-security and a flexible workforce is not easy to achieve.
Whilst some of the changes suggested in the report would be fairly easy to implement, it remains to be seen whether the Government will be able to gain the support of the House of Commons to alter legislation to instigate these suggestions.
Debbie Fellows is a Partner in our specialist Employment Law team. If you are looking for Employment Law advice, please contact Debbie on 01382 229111 or alternatively contact any member of our Employment Law Team.