The Taylor Review; reducing the gap between an employee and a gig economy worker?

Alexander Briejer, an Employment Lawyer from Rotterdam who is at Balfour+Manson on a European exchange programme looks at the Taylor Review from a Dutch perspective. 

Alexander

Introduction

A government review of employment practices was published on 11th July 2017, called the ‘Taylor Review of Modern Working Practises’ (hereinafter called ‘the Review’). It is named after the author of the Review, Matthew Taylor, chief executive of the Royal Society of Arts. The Review considers the implications of new forms of work on worker rights and responsibilities, as well as on employer freedoms and obligations. The Review was commissioned by Prime Minister Theresa May last year. 

Her goal was to examine how “gig economy” companies treat their workers. In a gig economy employers can decide when their employees can work while their workers have no guaranteed income and very few rights of redress. (A gig usual means ‘a single performance by a musician or group musicians’.)

Most of the gig economy workers take work via Smartphone apps. Companies such as Uber and Deliveroo are part of that economic playing field. Their workers do not have an obligation to work in general; they can ‘sign on’ for work as and when they please. The Review strongly recommends that all work in the United Kingdom should be fair and decent with scope for development and fulfillment. It sets out principles to address the challenges facing the United Kingdom labour market. In this article you will find an overview of the main recommendations.

Clarify the law  

The current framework works reasonably well, but needs to adapt to reflect emerging business models, with greater clarity for individuals and employers, said the Review. The Review suggests a change in the law to clarify what rights gig economy workers are entitled to. The focus should be clarifying the line between worker status and self-employment. The Review recommends that the government should introduce a new name to refer to the category of people who are eligible for worker rights but who are not employees (e.g. the gig economy workers). The Review categorising gig economy workers as "dependent contractors".  

Online tool

According to the Review the government should develop and create a free to use online tool that provides individuals with an indication of their employment status. This tool should also have the ability to provide employers with advice on the employment status of staff hired and their responsibilities. 

Same job, same rights (in writing)

A dependent contractor should enjoy the maximum flexibility whilst also being able to earn the minimum wage and have right on holiday paid. The Review suggests also that an employer should be required to issue the written statement of terms from day one to all workers. To encourage employer compliance, the government should consider a right for individuals to bring a claim for compensation if an employer has failed to act accordingly. 

Statutory Sick Pay

According to the Review the government should reform statutory sick pay. It must become a basic employment right, comparable to the minimum wage, for which all workers are eligible regardless of income from the first day of employment.

Higher National Minimum Wage   

The Review recommended an introduction of a higher minimum wage for hours that are not guaranteed as part of the (zero-hour) contract. This means that (most of the) gig economy companies have to pay their workers above the statutory minimum wage.   

From zero to guaranteed hours

The Review suggests a right to request a contract that guarantees hours which better reflect the actual hours worked, for those on zero hours contracts who have been post for 12 months. 

Right to return after sickness 

According to the Review individuals should have the right to return to the same or a similar job after a period of long term sickness. This right to return should be conditional on engagement with the Fit for Work Service when an assessment has been recommended.

Conclusion

The Review strongly recommended more benefits for gig economy workers, but it has not blown away the uncertainties faced by them by demanding full employment rights for those workers. Without changing the whole legal system this is in fact not possible at all. I will clarify this by giving an example.

A gig economy can be characterised by the prevalence of short-term contracts. This means that (most of the) gig economy workers has no right to bring an unfair dismissal claim. After all, the basic rule is that employees require at least two years of service in order to bring an unfair dismissal claim.

Zero-hours workers should according to the Review get the right to request fixed hours instead. As the way I see it, this right should probably not very helpful for zero-hours workers. From a legal perspective this right seems worthless.  

If the government really want to avoid an employer using those kind of contracts in an abuse manner, they should create a new article in the Employment Rights Act 1996. An example can be found in the Dutch labour law where the level of security of zero-hours workers is increased by the Dutch Civil Code and case law. In short, a zero-hours employee under Dutch law can demand a fixed-hours contract equal to the average scope of working hours over the past three months. It is up to the employer to disprove the arguments of the employee.

On balance, it is no wonder why the Trades Unions Congress is disappointed. Having said that, the Review recommended that gig economy workers must be entitled to rights such as minimum wage. However, there is nothing new under the sun regarding this topic. The landmark employment tribunal decided in October 2016 that Uber drivers should be treated as employed workers, including their right to the minimum wage and sick pay.

Uber decided to appeal against that decision (the appeal hearing will start after this summer). Nevertheless the fact that the Review is nothing more than an advice (it has no legal status), the Review will not be very helpful for Uber during the appeal proceedings.

Robert Holland, Employment Law Partner at Balfour+Manson commented “Alexander has picked up on what many Employment Specialists have stated, which is that the Taylor Review is not really coming up with new ideas, and seems to be substituting the new category of ‘dependant contractor’ for worker status we already have.  The Dutch model however is an interesting one and would provide statutory protection”.

To access the Taylor Review please click here

If you have any questions regarding any aspect of this article please contact the Employment Law team on 0131 200 1200.