• Taylor review will ‘further complicate’ employment law

  • 11 Jul 2017
  • Comments 2 comments

Legal experts brand ‘dependent contractor’ status unclear and unnecessary

Lawyers have slammed the Taylor review for further muddying the already complicated concept of employment status.

The Taylor review into modern working practices, which was published this morning, has called for ‘worker’ status to be renamed ‘dependent contractor’ and create more of a distinction between these people and those who are genuinely self-employed or employed.

The report concluded that those who fall under ‘dependent contractor’ status are most at risk of being taken advantage of and therefore suggested that these people are granted additional employment protections. The report also recommended extending some minimum pay rights to these workers, essentially making sure the average dependent contractor at any particular company is earning 1.2 times national minimum wage. 

“Bad work – insecure, exploitative, controlling – is bad for health and wellbeing, something that generates cost for vulnerable individuals but also for wider society,” said Matthew Taylor, the Royal Society of Arts chief executive and former adviser to Tony Blair, who headed the review. “As many business leaders recognise, low-quality work and weak management is implicated in our productivity challenge. Improving the quality of work should be an important part of our productivity strategy.”

However, Stephen Cavalier, chief executive of Thompsons Solicitors, said the new status “further complicate[s] existing categories” of employment.

“This new status is unclear and unnecessary,” Cavalier added. “Recent employment tribunal rulings have required prominent gig economy employers to pay their workers basic benefits, like sick pay, holiday leave and the national living wage. What is needed is for these rights and responsibilities to be clearly set out in legislation.”

Meanwhile, Sarah Peacock, an employment specialist at law firm Blake Morgan, said: “Far from clarifying the position, the new category of employment status of a ‘dependent contractor’ who has a number of employment rights, but presumably different to those of a ‘worker’, could just complicate things for both parties.”

Mike Cherry, national chairman of the Federation of Small Businesses, said the dependent contractor status, “if done right, should bring protections to those unfairly treated in the gig economy, while also protecting the genuinely self-employed”.

However, Cherry warned: “Government and parliament must now protect the genuinely self-employed from being dragged into a new category of dependent contractors. Legislation must not be so broadly drafted as to give ministers the power to widen the net on a whim without robust parliamentary oversight, in a way that hurts the genuinely self-employed.”

Employment status for those in the gig economy has already been questioned a number of times in the courts. In October, a tribunal decided that Uber’s drivers should be classified as workers rather than self-employed and, in January, a tribunal ruled that CitySprint cycle courier Margaret Dewhurst should be classified as a worker, entitling her to holiday pay and the national living wage.

Meanwhile, welcoming the review, CIPD chief executive Peter Cheese said: “The Taylor Review has the potential to change how we look at the future of work, which is about quality of work and not simply quantity. Translating the ambition into practice has an added importance given some of the additional challenges we face in the UK, from access to skills to labour market regulation post-Brexit."

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Comments (2)
  • What needs to be addressed is that employers are avoiding paying their employees for annual leave, sickness and corporation tax. This is modern slavery which is being legitimised right under our noses. This together with Zero Hours contracts is what is weakening the economy and widening the gap between the rich and poor. Once we are out of the EU workers will have little or no protection from exploitation of this kind. Everyone needs to wake up.

  • What a waste of time and opportunity We need clarity on what is employment and what is self employment. Not some spurious new category which appears to be some half way house.

    We need to address skills social mobility and how we can improve productivity Not some tinkering with employment law.

    If Taylor has been paid as. Tax payer can we have our money back?