The Taylor Report: What change for Employment Law?
When Matthew Taylor was commissioned by the Government to conduct a review, he was asked to look specifically at long-standing existing laws applied against the backdrop of modern and emerging methods of working such as the gig economy, zero hours contracts, agency work etc.
His 116 page report was recently published, setting out the need for a fresh look on employment law to make it fit for modern purpose.
Taylor begins his report by creating seven principles for “good quality work for all”:
- The ‘British Way’ should be directed towards the goal of ‘good work’ for all;
- The flexibility provided by platform based working e.g. via online apps, should be protected whilst ensuring fairness for those who use them;
- The law should help businesses make the right choices and help individuals know their rights;
- Responsible corporate governance and good management is more effective than laws;
- People should feel they have realistically attainable ways to strengthen their future;
- There should be a more proactive approach to workplace health and wellbeing;
- The National Living Wage should be accompanied by sectoral strategies to ensure people are not stuck at the living wage minimum.
Taylor’s recommendations were wide ranging, spanning areas such as employment status, sick pay, minimum wage, written contracts and enforcement. In this article, we’ll consider those in relation to employment status and agency workers. Part 2 of this series will contain Taylor’s plans on sick pay, flexibility for workers including zero hours and changes to the tribunal system.
- Whilst the three current employment statuses (employee, worker or self-employed) should remain, the category of ‘worker’ should be renamed ‘dependent contractor’;
- The difference between the statuses should be made clearer. Ambiguity must be removed so that determination of employment status is not open to interpretation;
- Clarity can be helped by confirming in legislation the tests used to determine status rather than relying on case law.
Taylor went on to recommend that dependent contractors should:
- Have the right to receive a written contract in the same way as employees, but which sets out the employment rights specific to them. This contract should be provided on the first day of work, whether it be for employees of dependent contractors (currently, employers have 2 months to provide the contract);
- Be able to receive rolled up holiday pay.
The Agency Workers Regulations give agency workers rights to be treated the same as people who were recruited directly by the company where the agency worker is placed. One of these rights is to receive the same basic pay as a direct recruit after 12 weeks on assignment unless the agency worker is on a ‘pay between assignments’ contract. Taylor has suggested removing this exception, meaning that all temporary agency workers would have rights to equal basic pay after 12 weeks.
Interestingly, this measure was included in the General Election manifest for the Labour Party.
Secondly, agency workers should be able to request a direct contract with the hirer after 12 months on assignment. Employers would be under a duty to consider the request in a reasonable manner.