They said 'something must be done'. This is something…
A little over two years ago, the rise of the gig economy, the increased use of zero hours contracts and a sense that a large part of the workforce had little or no job security or protections led the government to ask Matthew Taylor to look into modern working practices.
He launched a comprehensive review that resulted in a report in July 2017. Theresa May said that she would consider the report over the summer. Some time later, in February 2018, the government launched a consultation (technically, four separate consultations) into what had been proposed in the report. The indications were that the government broadly agreed with what was being proposed, even though the unions and the Labour party had both concluded that it did not go far enough to address the problems facing vulnerable workers. However, the consultations gave little away as to the extent to which the government intended to take action.
Now, the government has announced the reforms that it intends to make in response to the Taylor Review. Contrary to media reports (and, indeed, the government's own press release), no new legislation has yet come into force. Instead, the Good Work Plan gives a detailed indication as to what the government will include in new legislation in the coming months. To that extent, the Plan is a roadmap - but it contains some interesting destinations. For instance, the government has committed to legislate to improve the clarity of the employment status tests. Many had thought that this would be a task that the government may have decided to duck, given its complexity.
Other significant commitments include:
- scrapping the so-called 'Swedish derogation', which allows agency workers to be paid less than permanent counterparts if they are retained on a minimal contract with the agency between assignments;
- extending the right to a 'day one' statement of terms to all workers, rather than just employees;
- quadrupling maximum fines for employers who have behaved particularly badly from £5,000 to £20,000;
- introducing a "right to request" a permanent employment contract for some workers on long term precarious contracts;
- extending the holiday pay reference period from 12 to 52 weeks; and
- lowering the threshold required to trigger information and consultation arrangements from 10% to 2% of the workforce.
The government has decided against aligning the tax treatment of employees and the self employed (in particular, with regard to national insurance contributions), even though it recognises that the difference in treatment is probably wider than it should be. Many will see this as an opportunity missed, as it is arguably one of the main factors allowing some of the current exploitation of vulnerable workers in the gig economy.
One interesting detail in the Plan is a passing reference to Tribunal fees – "There are currently no fees in the employment tribunals following a Supreme Court judgment. If fees are reintroduced we will consult on this." This may unsettle those who thought that the Unison decision on Tribunal fees was the end of the matter.
One other thing lacking from the document is a timetable. Many commentators have noted that time may be running out to implement everything set out in the plan before the next election, particularly with Brexit looming. Given Labour's views on the Taylor Review, there is still a risk that the reforms proposed may never see the light of day.