Government responds to Matthew Taylor’s review of modern working practices

Six months after the Taylor report called for widespread change to UK working practices, the Government has published its response, taking action on all but one of the recommendations.

The response outlined overhaul of employment rights designed to improve conditions for millions of workers, including those in the gig economy. Under the proposed reforms, all workers will receive rights from day one of their employment, including holiday and sick pay entitlements.

The ‘Good Work plan’ comes in response to the independent Taylor Review, published last year, which investigated what impact modern working practices are having on the world of work. The review found that the strength of the UK’s labour market is built on flexibility but that a clearer focus is needed on quality of work as well as the quantity of jobs.

The Prime Minister said:

We recognise the world of work is changing and we have to make sure we have the right structures in place to reflect those changes, enhancing the UK’s position as one of the best places in the world to do business.

We are proud to have record levels of employment in this country but we must also ensure that workers’ rights are always upheld.

Our response to this report will mean tangible progress towards that goal as we build an economy that works for everyone.

The government has said it will seek to protect workers’ rights by take further action to ensure unpaid interns are not doing the job of a worker; introducing a new naming scheme for employers who fail to pay employment tribunal award and quadrupling employment tribunal fines for employers showing malice, spite or gross oversight to £20,000 and considering increasing penalties for employers who have previously lost similar cases.

The report also said it will ensure workers are paid fairly by providing all 1.2 million agency workers with a clear breakdown of who pays them and any costs or charges deducted from their wages and by considering repealing laws allowing agencies to employ workers on cheaper rates.

It aims to increase transparency in the business environment by defining ‘working time’ for flexible workers who find jobs through apps or online so they know when they should be being paid and by making sure new and expectant mothers know their workplace rights and raise awareness amongst employers of their obligations.

David Southall is an employment law consultant with the ELAS Group. He says:

“The Taylor review was a wide ranging look at modern employment practices, possibly the first to be carried out by a Government in a G7 country. Its foundations were in a need to address the so called gig economy to ensure that individuals working in such roles were adequately protected. However, by the nature of its requirements, the review went on to focus on possible changes within employment law as a whole as well as possible extensions to the powers of HMRC e.g. to enforce non payment of sick and holiday pay. Although the Taylor review was met with some cynicism at the time due to the fact that it did not deal with the controversial issue of Employment Tribunal fees, the subsequent abolition of fees shortly after its publication allowed a more thoughtful consideration of the contents.

“The review highlighted the gaps in rights between workers and employees, suggested ways of removing them and pointed out areas where the law could assist with ensuring that the flexibility of zero hour contracts worked to the advantage of both the business and those working for them e.g. the right to ask for guaranteed hours after 12 months.

“Today’s announcement by the Government that consultations will commence on four areas of recommendations highlighted by the report is the start of a long process, which may not achieve an outcome before the next election or Brexit – whichever is sooner. However it does provide a focus for employers to consider the basis on which they procure and retain labour.

“In respect of an extension to general employment rights, the recommendation is that an employer provides a written statement of terms and conditions of employment on day one, rather than allowing up to 8 weeks as is the present legal requirement. This change would require organisations to have their HR systems optimised to provide such documents from the get go, rather than just addressing them as and when convenient over the following two months.

“The government has also recommended a more pro-active enforcement process for awards against employers who lose at Employment Tribunal; there could also be a list that names and shames companies that do not pay their fines. This appears to be along the lines of the National Minimum Wage name and shame list and employers would do well to keep their names off such lists in order to avoid damage to the reputation from the fallout that comes with publication of these lists.

“We will be watching for the outcome of the consultations in order to get greater clarification on employment status, which has long been the greyest area of employment law.”

Commenting, REC chief executive Kevin Green says:

“The way we work is undergoing drastic changes and it’s high time that regulations around the gig economy are aligned with other flexible workers. We therefore welcome the news that the government has decided to further consult with businesses on the future of the UK workforce.

“We are very pleased to see that the government is working towards more consistency and transparency around the rights and status of people working in the gig economy. This is something that is much needed to level the playing field so gig workers get the same rights as agency workers receive, such as holiday and sick pay.

“It was disappointing that there was no decision around improving the Apprenticeship Levy by turning it into a broader training levy as this could immediately benefit millions of workers and would help address the country’s skills shortages.

“We still need more clarity on some of the points raised, including the definition of zero-hour contracts and if agency workers are included. We also need to know when exactly people are eligible to request a contract and if additional paperwork around this will mean more bureaucracy and therefore a greater burden. In addition, the government’s reform plans should not apply only to Swedish Derogation but instead should open up all parts of the Agency Workers Regulations for review.

“We are looking forward to represent our members and the recruitment industry in the consultation process and deploy our expertise around flexible working to ensure the UK’s labour market remains a success story.”


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