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Tuesday 11 July 2017 11:19 am

Taylor review: Six major report recommendations for changing employment law with the rise of the gig economy

By: Lynsey Barber

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The government should introduce new laws for a new world of work. That's the recommendation of the Taylor Review, a long-anticipated report into the gig economy and how employment is changing in the modern economy.

It's yet to be seen if and how the government might take on such changes.

Here are the main points of the report you need to know about…

1. Business should be transparent about how they employ people

Businesses should be open about how they employ people, how many zero contracts they offer and who is classed as working in what status. This should be done through corporate governance.

2. Employment tribunals shouldn't be used to decide employee status

Clarity on the type of employment should come before reaching the stage of a tribunal, Taylor suggests, and the burden of proof should be on the employer to disprove that a claimed working relationship exists, rather than someone having to prove that it does.

This comes after several high-profile tribunals on the status of workers which ruled people are workers and not self-employed (though that is subject to challenges).

Business who ignore court decisions should face greater penalties, the report also suggests.

3. Workers become "dependent contractors" with clearer terms for each

Clarity should be given to the three current statuses of employment, currently either worker, employed and self-employed – essentially it is a grey area that is too open to interpretation. And "worker" should be renamed "dependent contractor".

"Government should replace the minimalistic approach to legislation with a clearer outline of the tests for employment status, setting out the key principles in primary legislation, and using secondary legislation and guidance to provide more detail," the report suggests.

Exactly what the distinction would be between the three statuses is not decided on in the report, indicating further scrutiny if the government takes on the recommendation.

But the report also warned that any change to legislation should not impact anyone who benefits from the current system.

Taylor said that any changes "must be accompanied by a new approach that supports genuine two-way flexibility enabled by digital platforms".

4. Use data to calculate wages per task

Doing this would means people could work flexibly but have the opportunity to earn the minimum wage.

Platforms like Uber and Deliveroo would have to work out what the average ride or delivery would cost, on average, and make sure this totted up to minimum wage based on the capacity per hour.

This would be done by adapting current piece rate legislation.

"Government should consider very carefully how this could be implemented to avoid abuse – taking into consideration issues like regional variations. A key consideration will be that the individual is completely free to choose the time of work, and whether or not to accept individual jobs. This is very different, for example, to a situation where a mobile worker is being expected to travel between a fixed number of appointments, for which the National Minimum Wage would clearly apply."

5. Close a loophole that allows agency staff to be paid less than employees doing the same job

The regulation known as the Swedish Derogation rule, derives from EU legislation. Ditching this loophole could be good news for workers in terms of pay, but could add costs to businesses.

6. National Insurance changes

Chancellor Philip Hammond famously u-turned on proposed changes to the rate of National Insurance which he wanted to bring in line between the employed and self-employed.

The report said it believed the proposals are correct.

"The level of NI contribution paid by employees and self- employed people should be moved closer to parity while the Government should also address those remaining areas of entitlement – parental leave in particular – where self-employed people lose out."

After Hammond's debacle this will be at the bottom of the to do list, if not missing from it all together.

 

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