News feature| Against the odds: rebalancing workplace laws

The Taylor Review recommendations are the opportunity for the government to demonstrate it can secure high levels of protection for UK workers. Jean-Yves Gilg reports

19 July 2017

Commissioned in November 2016, the Taylor Review has been 20 months in the making. Its 115-page report, called ‘Good Work’, was published last week and proposes wide-ranging changes to employment law and practice in the UK.

The proposals by Royal Society of Arts chief executive Matthew Taylor and his team are aimed primarily at ensuring that Britain keeps pace with the gig economy, but a significant fringe benefit would be to bring the self-employed, whether high-earning consultants or casual independent workers, firmly within the country’s tax and national insurance system.

Underlying the proposals is the recognition that when it comes to enforcing workers’ rights, employment tribunal applicants often face an uphill struggle. ‘From the decision to take action against your employer to winning or losing the case against them, the odds are often stacked against the worker,’ the report says. ‘This has to change if we are to effectively police fair and decent work.’

The headline change is the creation of a new category of worker, which the report suggests should be called ‘dependent contractors’. It’s undoubtedly a useful concept that encapsulates the variety of the new work relationships and it would unequivocally offer greater protection to all ‘workers’, such as the right to holiday pay or statutory sick pay.

The new category would have ‘a clearer definition which better reflects the reality of modern working arrangements, properly capturing those more casual employment relationships that are on the increase today – an individual who is not an employee, but neither are they genuinely self-employed,’ the report says.

Control v personal service

This would require a change in the law that could see greater emphasis placed on the element of ‘control’ drawing from the employment courts’ caselaw. Conversely, there would be less emphasis on personal service, a key feature of self-employment, which would bring more workers within the protection offered by employment law.

‘It is important for Government to ensure that the absence of a requirement to perform work personally is no longer an automatic barrier to accessing basic employment rights,’ the report says. ‘Ultimately, if it looks and feels like employment, it should have the status and protection of employment.’

In practical terms, this should help workers at the lower end of the gig economy secure rates that are more in line with the minimum wage. With around 1.1 million people involved in the UK’s gig economy sector, ‘pay ought to reflect the number of “gigs” a person conducts, similar to how “piece work” is conducted in other sectors’, says Jo Yeates, head of employment at Hethertons Solicitors. Under the proposals, ‘the “dependent contractors” will be told how much the job they are about to perform will earn them, which could be based on the requirements of the business. It will then be down to them to decide whether the job is what they require’.

The new rules would mostly build on existing laws and precedents covering the existing ‘worker’ status, but because these new work relationships are so fluid and changing, this could be a thankless task. It would involve designing a legislative framework that is rigid enough to set out clear principles applicable to all circumstances while also having enough flexibility to be adaptable – and that will not be easy.

What’s more, according to Julie Taylor, a solicitor at Gardner Leader, ‘this change to the categories could simply increase disputes and the additional costs will be a heavy burden for employers so even if implemented, this is unlikely to be a quick fix’.

In comparison, proposals for changes to how rights are recognised and enforced are likely to have a much more significant effect in practice, starting with proposals that employment tribunal rules should be changed to allow claimants to bring a case without having to pay the initial issue fee.

Under current rules, applicants in employment tribunal cases must pay an issue fee and, often, a hearing fee, the combined cost of which can be up to £1,200, solely to determine whether they can be regarded as an employee entitled to have their claim heard.

‘We believe that this is unfair, especially as the responsibility of proving the nature of the working relationship sits squarely with the individual,’ the report said. ‘This is especially so when an employer/engager chooses not to engage in a constructive assessment of the individual’s employment status.’

Fee-free hearings

As a matter of tactics, the report continued, an employer or engager can ‘very simply, ensure the process of securing justice is as costly (and time consuming) as possible for the individual.’

Employment tribunals usually seek to determine a claimant’s status at a preliminary hearing, although that is not always the case. One solution with the current framework would be to make it a requirement to hold a fee-free preliminary hearing.

‘Government should ensure individuals are able to get an authoritative determination of their employment status without paying any fee and at an expedited hearing,’ the report said.

The hike in employment tribunal fees has been widely seen as a disincentive to bring claims and the main reason for the drop in applications in the past few years. Against this background, employment lawyers have been largely unconvinced by pledges in the Conservative manifesto to expand workers’ rights.

Law Society president Joe Egan called the fee-free hearing proposals ‘a keystone’ of the report, while Philip Harman, a partner at DAC Beachcroft, said it was ‘one aspect of the proposals that may be easier to adopt’.

Taylor himself stated there could be ‘no doubt that the introduction of fees has resulted in a significant reduction in the number of cases brought, although part of that reduction is likely to be associated with the introduction of Early Conciliation through Acas’.

However, he went on, ‘while many raised the issue of fees during our discussions (a concern we share), which even business groups accept may be too high, it would be wrong to suggest reform should only take place there.’

Tony Blair’s former policy adviser recognised ‘with regret’ that it was unlikely fees would be abolished but he said the level of the fees should be kept under review. Neither does he assume that the report’s recommendations will all be enacted.

A few of them, however, could become law, starting with an online tool to determine employment status. This would be an obvious and comparatively easy stream within the bigger online courts project. This should be free to use and would give individuals an indication of their employment status, similar to the employment status indicator tool for tax purposes. The expectation is that this would bypass the current preliminary hearing in the majority of cases.

‘Good Work’ contains a host of other low-key proposals which together could transform workplace law. If there are no expectations that they will be turned into a new single legislative framework, it would be disappointing if some of them are not taken forward. Having commissioned the review in the first place, it would be irresponsible for the government to ignore it. On the contrary, it could be an easy way of putting its money where its mouth is, giving tangible support to the new economic model. In the Brexit context, it could also help demonstrate that Britain can secure rights for workers that are at least as protective as the ones they are about to lose.

Jean-Yves Gilg, editor-in-chief

@jeanyvesgilg

This story was first published on Solicitors Journal on 19 July 2017 and is reproduced by kind permission

 

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