The ambition of Taylor Review of modern working practices, which was published in July, is that “all work in the UK economy should be fair and decent with realistic scope for development and fulfilment“. The goal of the report is “good” work for all, recognising this can encompass many factors such as proper pay, a guarantee of income, a voice at work and work-life balance.
We set out some of the recommendations of the report which may be relevant to businesses in the hospitality sector. Remember; the report merely makes recommendations – it is up to the Government to decide when and if to legislate to introduce some or all of the recommendations over the next year.
Much of the report focuses on employment status and how to protect vulnerable workers or those with limited choice in the more flexible labour market that we have in the UK today. There are currently 3 categories of worker – employee, worker and self employed; that deciding which category an individual falls into can be very difficult. There are no clear defining criteria, which means that workers often miss out on protection, such as holiday pay.
Determining employment status is key to working out an individual’s statutory rights. Workers are entitled to rest breaks and paid holiday under the Working Time Regulations, as well as the national minimum wage and protection from discrimination and victimisation. They are also entitled to a contribution from their employer under an auto enrolment pension scheme.
These protections are not available to someone who is self-employed. See Freeths article A flexible workforce – knowing where you stand over employee status for further details on employment status and the implications of this.
The report recommends new legislation which will clearly define employment status. It recommends redefining “workers” as “dependent contractors”, with more emphasis put on the level of control they have over their role and less emphasis on whether there is a right of substitution in the agreement.
It is recommended that employers are obliged to provide a written statement of terms to all employees and all workers from day one.
A free online tool should be established to make it easier to determine employment status so that this can be done without the expense of recourse to the Tribunal.
The report looked in detail at the ‘gig’ economy – Uber and Deliveroo are examples of this model. Such platform based work offers flexibility for both the business and the worker but there is concern about the overall fairness of such arrangements for the individual. It was recommended that legislation should ensure that gig economy workers receive the National Minimum Wage. It recommends that this is done by adopting piece rates legislation and by requiring those operating platforms to use all the data available to them to provide information to workers on availability of work at any given time.
Other employment recommendations
The report suggests promoting an awareness of holiday pay entitlements – all workers are entitled to holiday pay and there is a mechanism for calculating holiday over a 12 week reference period for those without normal working hours. Using a 52 week average to calculate holiday entitlement, instead of the current 12 weeks, and allowing “dependent contractors” to receive rolled-up holiday pay was proposed. This could mean that more seasonal workers become entitled to holiday pay.
Break in Service
Currently if there is a break of a week or more in employment then continuity of service is broken. The report recommends extending this to 1 month which would make it easier for those who have breaks in employment (e.g. in school holidays) to accrue qualifying service and therefore employment rights.
The report proposes a right for an agency worker who has worked for the same hirer for 12 months to request a direct contract of employment and for the hirer to consider this request in a reasonable manner.
Zero Hours contracts
In a similar way to agency workers, the report recommends that those who have worked on a zero hours contract for 12 months should have the right to request a contract that guarantees hours and better reflects the actual hours worked. This could be problematic for employers but is better than the outright ban on zero hours contracts which was mooted.
Statutory Sick Pay
This should be available to all workers, not just employees, and should be payable from day one.
We wait to see how many of the report’s recommendations find their way on to the statute books. It has addressed some complex issues and there is much to like. Greater clarity on employment status is to be welcomed. However, if more people are categorised as workers who will then have rights to the national minimum wage, holiday pay and sick pay then there will be an inevitable cost implication for employers.
The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.