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19 December 2018 0 Comments
Posted in Employment, Opinion

Government announces its Good Work Plan in response to the Taylor Review

Posted by , Trainee solicitor

After months of consultation the Government has published its response to the Taylor Review of Modern Working Practices. The ‘Good Work Plan’ makes commitments to enacting legislation to implement most of the recommendations from the Taylor Review but has provided little detail on the legislation itself or timescales for implementation.

There are also a number of areas where there will be further consultation. Nonetheless the proposals are a reflection of the Government’s attempts to update the law to keep pace with the quickly changing world of work, recognising the huge impact of technological advances on how, when and where we work.

New legislation in the pipeline

The key areas where legislation is now expected to be implemented are:

  1. Employment status tests: aligning the framework for determining employment status for the purposes of employment rights and tax, and clarification of the employment status tests to better reflect modern working arrangements particularly in the ‘gig’ economy. The Taylor Review demonstrated how employees can be almost entirely controlled by a business but still be considered self-employed if a right for the individual to send a substitute exists in the contract. The Government proposes to legislate to emphasise control as the principle test for self-employed status rather than the contractual right to send a substitute worker. “Substitution clauses” are a standard feature of agreements in the gig economy world but are typically seen as window dressing with the right rarely if ever exercised.

Whilst the Plan refers extensively to the importance of aligning the tests, it provides no detail on how this will be achieved. A three-tier approach, however, will be retained, with workers being renamed as ‘dependent contractors’. The Plan suggests more research and consultation is needed, which could mean legislative changes in this area are still some time away.

  1. Right to all workers (including zero hours workers) to request a more predictable and stable contract after 26 weeks of service with their employer: if implemented, this will remain only a “right to request”. Whilst the employer may have to evaluate the request, they will be under no obligation to move an employee onto a more favourable contract. Therefore, employers will retain a wide discretion to refuse requests, doing little to combat the abuse of zero hour contracts.
  1. Extending the break in continuous service from one week to four weeks: this will make it easier for casual workers in particular to accrue ordinary unfair dismissal protection rights
  1. Written Statement: the Government intends to introduce the right to a written statement from the first day of work with the employer required to provide an expanded amount of information including how long the job is expected to last; details of sick pay; and details of other paid leave e.g. maternity leave and paternity leave

Additionally, the Government intends to extend this right to all workers, and not just employees. This will be enacted by The Employment Rights (Miscellaneous Amendments) Regulations 2019.

  1. Holiday pay awareness campaign and guidance: to support the interpretation of the holiday pay rules which can be very complex. The holiday pay reference period will be extended from 12 weeks to 52 weeks, giving a clearer idea of average weekly hours worked over the year, particularly where workers may have increased seasonal workloads. Employers will need to consider workers’ bonuses and commission earned over a year when calculating holiday pay, which could be expensive if the employer gets this wrong.

The Government has announced The Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018, which will come into force on 6 April 2020. The will enact both the extended holiday pay reference period and the day one right to a written statement of employment particulars. 

  1. Minimum Wage and sick pay: Whilst the Taylor Review recommended the introduction of a higher national minimum wage for zero hour contracts, the Good Work Plan has failed to table any potential changes. Therefore, we may not see any changes to the minimum wage in this area for some time. Additionally, the Government has made no commitment to statutory sick pay being a right from day one of work. Further, no commitment has been made on a right to return to the same job after prolonged sickness absences from work. The Good Work Plan has fallen short of Taylor’s recommendations in relation to sickness.

So what’s next?

Whilst the Good Work Plan provides some further clarity about the future of employment law and the Government’s intentions, no timescales have been provided for the rollout of new legislation and there is virtually no detail on potentially highly significant changes such as unifying the tests for determining employment status. As Brexit continues to dominate the headlines and political agenda, it may be some time before the Government focuses on any actual domestic legislative and policy changes in this area.

If you have any enquiries please contact Matthew Vincent on:

0207 842 1457     Email usmatthew.vincent@roydswithyking.com

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