‘TAYLOR’-MADE WORKING PRACTICES: NAVIGATING THE AGE OF THE FLEXIBLE WORKFORCE
Matthew Clayton, employment law partner at Willans LLP solicitors, discusses the Taylor Review of Modern Working Practices and the issues it highlights for employers and employees alike.
The modern workplace is increasingly characterised by flexible, ad hoc working as more people become self-employed or work under zero hours contracts. A flexible workforce can benefit businesses that have peaks and troughs in demand and workload, and, despite fears of exploitation, there can be benefits for workers who have other commitments and priorities around which they have to fit their work.
That said, the emergence of the gig economy and other platform-based working has illustrated that exploitation occurs, as reports of individuals earning as little as £2.50 an hour have clearly demonstrated. Recent high-profile tribunal cases, such as Uber and Pimlico Plumbers, have also highlighted that such arrangements present problems when determining employment status and tax liability.
In response to this, at the end of 2016, the Government launched a review of the UK labour market. Published this summer, the Taylor Review of Modern Working Practices considered the implications of these new forms of work and paid particular attention to the gig economy. It looked not only at how people are engaged in work, but also the quality of the work arrangement, identified the need to adapt the current legal framework to reflect emerging business models, and noted that a distinction between employee and self-employed is not enough.
The review endorsed the present system of employment status which distinguishes between employee, worker and self-employed, and recommended that these categories are also used for tax purposes. Further suggestions in the report include the category of ‘worker’ (currently used to categorise individuals in less formal employment relationships) being renamed ‘dependent contractor’, and the suggestion that those in this group receive at least basic employment rights, alongside a statement of employment on commencement of work.
Despite the report noting that ‘too many’ employers rely on zero hours contracts, short-hours or agency contracts, it did not go so far as to recommend banning, or heavily regulating the use of them. However, it did recommend that a higher rate of national minimum wage should be considered for hours not guaranteed by the individual’s contract, and the introduction of a right to request a ‘guaranteed hours contract’ when an individual has been under a zero hours contract for 12 months.
It remains to be seen whether the government will implement the review’s recommendations. In the meantime it makes it difficult for employers to know where their obligations lie when engaging individuals under these atypical working arrangements.
To guide employers on how to navigate the maze of flexible working and stay on the right side of the law, Matthew and the Willans employment law team are hosting a half-day 'Building flexibility into your workforce' seminar at Stonehouse Court Hotel on 21 September (£30 inc. VAT and lunch). To book, email firstname.lastname@example.org or call 01242 542916