The government has published “Good work”, its response to the The Taylor Review of Modern Working Practices. which aimed ‘to improve the lives of this country’s citizens’ together with four new consultations covering the employment and the labour market.
The Taylor review had recommended:
- In order for people and employers to make the choices that are right for them, clarity and transparency are essential.
- A flexible labour market works for employers and individuals, encouraging job creation and allowing more people to participate in work.
- The current three tier system for rights is still relevant in the modern labour market, reflecting the broad categories of different types of employment relationship (see below regarding ‘Dependent contractors’).
- The self-employed should receive more support and advice.
Tax was not actually part of the review’s terms of reference.
The government have agreed with the following recommendations, taking account also of proposals made by the work and pensions and business, energy and industrial strategy, committees:
- There should be a clearer outline of the tests for Employment status setting out the key principles in primary legislation and using secondary legislation and guidance to provide more detail.
- Those individuals who are eligible for worker rights but not are employees should be renamed ‘Dependent contractors’ and in developing the test for and defining ‘Dependent contractor’ status:
- In distinguishing workers and the self-employed, Supervision and Control should be of greater importance than substitution, with less emphasis on the requirement to perform work personally.
- The piece rates legislation should be adapted to ensure those working in the gig economy are still able to enjoy maximum flexibility whilst also being able to earn the National Minimum Wage.
- Renewed effort should be made to align the employment status framework with the tax status framework so that differences between the two are minimised.
- There should improvement of clarity and understanding by providing individuals and employers with access to an online tool that determines employment status in the majority of cases.
- Consideration should be given to accrediting a range of platforms to support the move towards more cashless transactions with a view to increasing transparency of payments and supporting individuals to pay the right tax
The government has:
- Disagreed with the proposal to legislate to implement a ‘worker by default’ model to apply to companies above a certain size saying that “clarifying status and rights along with actions to make redress easier and faster should help address the concerns underlying this recommendation.”
- Confirmed that there are no plans to revisit the issue of disparity in NIC between the employed and self-employed.
BEIS has published four new consultations:
- Consultation: Employment status : this examines the steps in determining employment status, comments by 1 June 2018
- Consultation: Agency workers recommendations: this looks at the working practices of payroll providers, umbrella companies and how their practices affect labour and rights, it considers registration and new statutory requirements, comments by 9 May 2018
- Consultation: Increasing transparency in the labour market; this considers workers rights, comments by 23 May 2018
- Consultation: Enforcement of employment rights, this considers enforcement measures, comments by 16 May 2018
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