There’s been a lot of press coverage about the Taylor Review on modern employment practices which delivered its recommendations earlier this week. We’ll have to wait and see which of the proposals are adopted by the government and, significantly, how long we have to wait until they do so.
One of the key issues looked at dealt with the employment status of the so-called “gig economy” workers. This follows on from several high profile cases which have, in many cases, given these individuals better legal rights (holiday pay, sick pay and national minimum wage in particular) than had been intended by the companies engaging them. The Taylor review has recommended that we stick broadly to the current system of categorising individuals as employees, self-employed contractors and a half way house of “worker” or, as Taylor would prefer us to call it, “dependent contractor”. It is also proposed that the definitions of each category is tightened up in new legislation, both to reflect the recent developments in case law, but also to put more emphasis on who controls the work the individual carries out.
Taylor also addressed the tax status of workers, perhaps reflecting concerns from the Revenue that those without employment status could pay less tax than if employed. On this point it’s suggested that the middle category of worker / dependent contractor is treated as employed for tax purposes.
National Minimum Wage may also be affected. It’s been suggested that an increased NMW could apply if hours of work are not guaranteed by the employer or if the employee elects to have their holiday pay “rolled-up” into their normal earnings, rather than being paid when periods of holiday are taken.
Another area looked at was contracts of employment and the idea was introduced of a legal minimum statement of terms to be provided to workers, rather than just employees. Terms for both employees and workers would need to be issued on the first day of work and individuals could be entitled to bring a stand-alone claim for an employer’s failure to do so – at the moment these claims can only be brought if the employee is also bringing another claim.
Whilst there aren’t any immediate changes in law, employers need to be clear now about who they engage and whether they are an employee, worker or are genuinely self-employed. We’re happy to chat through with you the best way to work this out and, then what steps to take from there – whether it’s an assessment of the risk and potential value of claims or guidance on what documents you need to put in place.