The Government have published the response to the Matthew Taylor Review of Modern Working Practices and has commenced four related consultations for proposals under a ‘Good work plan’ to address the Taylor review’s “7 principles for good quality work for all”. Links to the consultation documents and a summary of the key aspects are set out below.
Consultation: Employment status
The Government agrees with the Taylor Review’s conclusions that: (i) the current three tier system for rights i.e. employee, worker and self-employed, is still relevant in the modern labour market, reflecting the broad categories of different types of employment relationship; but, (ii) there is a compelling case for greater clarity in this area as it should be easier for individuals and businesses to determine the category within which an individual falls. This consultation is purely concerned with how those statuses are defined, and where the lines between them are drawn – no proposals are made – instead, the consultation asks 64 questions about how the objective for greater clarity could be achieved.
Chapter 6: ‘A better employment status test?’, is at the heart of this consultation. The Government recognises that it would clearly be beneficial to have a system that can be understood and applied by all; a well-designed statutory test or provision could make decisions around employment status easier for businesses and individuals, but any new test would either need to be simpler or more precise than the current case law tests. Two ways in which a test could be more precise are described and views sought: (i) precise criteria, i.e. based around more objective criteria such as the length of engagement; or (ii) precise structure, i.e. based around a clear order, hierarchy, or weighting of the criteria.
Consultation: Increasing transparency in the labour market
The Government will: (i) take immediate steps to extend the right to payslips to all workers, and to improve the quality of the information provided on payslips; and (ii) actively engage on the EU proposal for a Working Conditions Directive to improve transparency, which includes a day one right to an enhanced written statement of the employment relationship’s terms.
Consultation is taking place on:
- extending the right to a written statement of employment particulars to workers as well as employees;
- the Government doing more to promote awareness of the right to holiday pay and the method of calculating holiday pay;
- increasing the holiday pay reference period for calculating a week’s pay for workers without normal working hours from 12 to 52 weeks;
- extending the length of the relevant break in service period (currently one week) for the calculation of the continuous service qualifying period;
- introducing a right for workers to request a more predictable and stable contract; and,
- the effectiveness of the Information and Consultation Regulations in improving employee engagement in the workplace.
Consultation: Agency workers recommendations
Views are sought on the following recommendations made in the review:
- The Government should amend the legislation to improve the transparency of information which must be provided to work seekers both in terms of rates of pay and those responsible for paying them.
- The Director of Labour Market Enforcement should consider whether the remit of EAS ought to be extended to cover policing umbrella companies and other intermediaries in the supply chain.
- The Government should repeal the legislation that allows work seekers to opt out of equal pay entitlements (known as the ‘Swedish Derogation’).
- The Government should consider extending the remit of EAS to include compliance with the Agency Worker Regulations 2010.
Consultation: Enforcement of employment rights recommendations
The Government accepts that:
- strong action should to be taken against employers who repeatedly ignore both their responsibilities and the decisions of employment tribunals, and through this consultation will consider how to take forward the review’s recommendations; and,
- the enforcement process could be simpler and intends to undertake wide ranging and comprehensive reforms of the process for civil claims and judgments across the courts and tribunals systems.
The Government is taking action as follows:
Establish a naming and shaming scheme for those employers who do not pay employment tribunal awards within a reasonable time and seek views on how it can best achieve this.
Raise the maximum limit a tribunal can award for an aggravated breach of employment law to at least £20,000 as soon as parliamentary time allows and seek views on how to change the circumstances in which aggravated breach penalties can be imposed as legislation does not set out what constitutes an aggravated breach.
Accepting that the enforcement of tribunal awards process could be simpler, and (i) intends to undertake wide ranging and comprehensive reforms of the process for civil claims and judgments across the courts and tribunals systems; and (ii) seeking views on how the enforcement processes for employment tribunal awards could be improved through those reforms.
Accepting the case for the State taking responsibility for enforcing a basic set of core rights for vulnerable workers – National Minimum Wage, statutory sick pay and statutory holiday pay – and gathering information to help determine the best way to ensure the most vulnerable receive the level of protection they deserve.
Note: The Government has not accepted the recommendation that the burden of proof in employment tribunal hearings, where employment status is in dispute, should be reversed so that the employer has to prove that the individual is not entitled to the relevant employment rights.
Content Note
The aim is to provide summary information and comment on the subject areas covered. While every care has been taken in compiling this information, SM&B cannot be held responsible for any errors or omissions. Specialist legal advice must be taken on any legal issues that may arise before embarking upon any formal course of action.
