The Taylor Review of Modern Working Practices has called for the Low Pay Commission to examine how a higher National Minimum Wage could apply to non-guaranteed hours.
The review also suggests zero-hours workers should be allowed to request work on a fixed-hours basis.
The government-commissioned report has made a number of recommendations regarding the so-called gig economy and the current three-tier system of employment status (’employee’, ’worker’ and ’self-employed’) and the legal rights within that framework.
Notably, the review rejects calls for the three-tier system to be replaced with a system similar to tax, where there is a binary choice between employment and self-employment.
The review states: "The status of ‘worker’ provided in employment law is helpful in being able to apply basic protections to less formal employment relationships. As such, the current three-tier approach should be retained."
However, it adds: "Government should retain the current three-tier approach to employment status as it remains relevant in the modern labour market, but rename as ‘dependent contractors’ the category of people who are eligible for worker rights but who are not employees.
The review sets out a number of ’next steps’ for government action, including:
• Develop legislation and guidance that adequately sets out the tests that need to be met to establish employee or dependent contractor status. This should retain the best elements of case law and better reflect the reality of modern day casual work in terms of the control exercised by employers over their staff.
• To reflect the realities of platform work, ensure that in developing legislation, legitimate business models that allow maximum flexibility to their dependent contractors are not prevented from operating by updating NMW legislation.
• Provide maximum clarity on status and rights for all individuals by extending the right to written particulars to all in employment and developing an online tool providing a clear steer on what rights an individual has.
• Task the Low Pay Commission with examining how a higher NMW rate might apply to non-guaranteed hours.
• Develop legislation to make it easier for all working people to receive basic details about their employment relationship up front as well as updating the rules on continuous employment to make it easier to accrue service.
• Reform holiday pay entitlements to make it easier for people in very flexible arrangements to receive their entitlements in real time as well as extending the pay reference period to 52 weeks for those who do not.
• Develop legislation that allows agency workers and those on zero-hours contracts the ability to request to formalise the reality of the working relationship.
• Draw on expert bodies to drive a much greater push on what constitutes good workplace relations, especially in sectors with highinstances of low pay or atypical work.
• Review the effectiveness of the Information & Consultation Regulations, including their scope and thresholds, in driving good employee engagement in the workplace.
• In thinking about corporate governance more generally, develop proposals to require companies to be much more transparent about their workforce structure.
You can view the whole report here
Commenting on the Taylor Review, the TUC general secretary, Frances O’Grady, said: “It’s no secret that we wanted this review to be bolder. This is not the game-changer needed to end insecurity at work.
“A ‘right to request’ guaranteed hours is no right at all for many workers trapped on zero-hours contracts. And workers deserve the minimum wage for every minute they work, not just the time employers choose to pay them for.
“But Matthew Taylor is right to call for equal pay for agency staff and sick leave for low-paid workers — something which unions have long campaigned for. The government should move swiftly to implement these recommendations.
“Theresa May cannot use this report as shield to hide from her responsibilities. We need a proper crackdown on bad bosses who treat their staff like disposable labour. And an end to employment tribunal fees that price workers out of justice.”
Ann Francke, chief executive of the Chartered Management Institute, commented: “Taylor’s welcome recommendations drive home the need for better management to transform the workplace and UK plc. It’s great to see that Taylor’s principles also highlight the need to improve employee training, engagement and sense of purpose at work.
Graham Vidler, director of external affairs, at the Pensions and Lifetime Savings Association, commented: “Almost five million people or 15% of the UK workforce identify as self-employed. This has grown 25% in the last ten years at the same time as pension saving among self-employed people has fallen precipitously.
“New rights for those working in the gig economy are welcome and the government needs to provide clarity around dependent contractors and auto-enrolment. Dependent contractors should be treated as workers for the purposes of auto-enrolment and be automatically enrolled into a workplace pension. The government now has a window in which to address this.
“Failing to take these steps could accidentally create different classes of worker: those with automatic access to workplace pension saving and an employer contribution and those without. This is a long-term problem which we have the opportunity to remedy now.”