Government responds to the Taylor Review into Modern Working Practices

The government’s hotly anticipated response to the Taylor Review into Modern Working Practices was released today and has been received with a general air of disappointment.

The c.80 page document makes 53 recommendations, none of which commit (at this stage) to legislative changes surrounding employment status – a heavily debated and litigated topic in the gig economy. However, four separate consultations will be taking place later on this year in relation to employment status, transparency in the labour market, agency workers and enforcement of employment rights (more detail on this below) which demonstrate the direction of travel.

Some of the key recommendations made by the government are set out below:

Employment status

The Taylor Report recommended that “the government should replace their minimalistic approach to legislation with a clearer outline of the tests for employment status”. In response, the government acknowledged the uncertainty surrounding the assessment of employment status and committed to “take forward further work on the case for legislative change and potential options for reform”. ‘Employment status consultation’ has opened, seeking views on how assessing employment status might be codified in primary legislation and whether the case-law established principles governing the assessment (personal service, control and mutuality of obligation) are still relevant in the modern workplace. The consultation paper also raises the possibility of different tests for employment status, such as basing the assessment on objective criteria (e.g. length of engagement) or by reducing the number of factors to take into consideration.

Views are also being sought regarding how ‘working time’ should be defined for app-based platform workers, specifically whether time waiting for tasks while logged into an app should attract the national minimum wage. This has potentially expensive implications for businesses following the UBER model, whose workers were held to be working between tasks whilst logged into the app.

The additional ‘dependent contractor’ status proposed by the original Taylor report has not been taken forward.

Responses to the ‘employment status consultation’ should be submitted by 1 June 2018.

Transparency / agency workers

The government intends to make it easier for ‘atypical workers’ (e.g. agency workers and zero hours workers) to establish continuity of service. The response suggests that the current period of one week which can break continuity of service should be extended, making it easier for workers engaged on a series of short term contracts to establish continuity of service. Views on this are being sought as part of the government’s ‘transparency consultation’.

The government has accepted that the pay reference period in the Working Time Regulations 1998 (which is used, amongst other things, to determine holiday pay for workers with irregular working hours) should be increased from 12, to 52 weeks, to better account for seasonal variations for atypical workers.

Responses to the ‘agency workers consultation’ should be submitted by 9 May 2018.
Responses to the ‘transparency consultation’ should be submitted by 23 May 2018.

Enforcement

The report suggests that further action will be taken to (a) help individuals pursue employers who fail to pay Employment Tribunal awards and (b) deal with employers who repeatedly refuse to change their practices following adverse Employment Tribunal decisions.

Responses to ‘enforcement consultation’ should be submitted by 1 June 2018.

The big questions asked by the Taylor Report have essentially been parked, pending the outcome of the above consultation.

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