(Note: Since drafting this post, the Government has published the consultation documents so a further update will follow.)
The UK Government has today (7 February) announced its Good Work Plan (the Plan) in response to the Taylor review of Modern Working Practices published last year which set out a number of recommendations, in particular with regard to the so-called “gig economy”. It provides a brief outline of what is proposed but, so far, without the detail needed to clarify its precise plans.
The Government promises to “act” (largely dependent on consultation) on almost all of the Taylor review recommendations and in some respects plans to “go further than the review’s proposals”.
The Government promises the launch of four consultations as part of the Plan on the following:
- employment status (no detail on this is given yet but it is to examine options (including legislation) to make it easier to determine employment status)
- enforcement of employment rights recommendations (for example, by introducing a new naming and shaming scheme for employers who fail to pay tribunal awards and increasing financial penalties for employers who show “malice, spite or gross oversight” – and also for repeat offenders)
- agency worker recommendations (such as providing agency workers with a clear breakdown of who pays them and any costs or charges deducted from their wages)
- proposed measures to increase transparency in the UK labour market (such as making sure new and expectant mothers are aware of their rights; launching a campaign to encourage more parents to take up shared parental leave; and launching a taskforce to promote awareness and take-up of the right to request flexible working).
In any event, no changes are guaranteed. The Government states that it “will consider the impact of these reforms on business and other groups before implementing changes”.
Other currently rather vague proposals are set out, such as:
- introducing a new right for all workers, including zero hours and agency workers, “to request a more stable contract”. It is by no means clear what is meant by this.
- “asking” the Low Pay Commission to “consider” the impact of higher minimum wage rates for zero hours workers
- “enforcing vulnerable workers’ holiday and sick pay for the first time”
Holiday and sick pay entitlements
The Government also states that it will produce “a list of day-one rights including holiday and sick pay entitlements and a new right to a payslip for all workers including casual and zero-hour workers”.
Contrary to today’s headlines in the UK press, this may mean purely a clarification of existing holiday and sick pay rights rather than an extension of these rights to all workers. However no further detail is yet provided.
Employment status and tax
Currently, for tax purposes, there are only two types of work status: employed or self-employed. This means that a worker for employment law purposes who is not an employee is treated as self-employed for tax purposes.
One of the Taylor review recommendations is to align employment status with tax status, so that, for example, if someone is treated as employed for tax purposes then they should also be treated as an employee for employment status purposes. The review also recommends that the tax regime which currently applies to employees should apply to workers also.
It is made very clear in today’s announcement that changes to the rates of tax or National Insurance Contributions for either employees or the self-employed will not form part of the consultation on employment status. However, details of what is proposed in this area remain to be seen when the consultation is published.