Draft bill takes forward key recommendations from Taylor Review
21 November 2017
Two Select Committees have put forward a draft bill to Parliament which is intended to provide clarity on employment status and close the loopholes that can allow dubious employment practices.
What changes to legal and regulatory frameworks are required to protect workers in the modern labour market?.
This is the question that the government asked Matthew Taylor to address in his review of modern employment practices.
The Taylor Review was published in July 2017 and a government response is expected by the end of 2017. In a joint inquiry the Business, Energy and Industrial Strategy and Work and Pensions Committees sought to maintain the momentum created by the Taylor Review and to support government in implementing its most transformative recommendations.
In October 2017 the committees jointly held evidence sessions with both Matthew Taylor, and Professor Sir David Metcalf, the government’s director of labour market enforcement, to help decide on next steps. The committees also heard from workers and businesses in the gig economy to examine the challenges both are facing; in particular to understand which changes could be achieved through policy shifts or secondary legislation, which would require primary legislation, and what support might be offered to government in legislating.
As a consequence the two committees have produced a Draft Bill, which takes forward the best of the Taylor Report recommendations. These include:
Providing increased clarity on employment status. This could be provided by primary legislation reflecting the case law that has already been built up. Receiving a statement of employment terms and rights on day one of a new job would also help employees and workers better understand their rights and entitlements
Closing loopholes that enable dubious business practices. Recent court cases have exposed a pattern of companies using bogus self-employed status as a route to cheap labour. Implementing a model of worker status by default for companies with substantial dependent workforces currently labelled as self-employed would better protect such workers. The onus would be on the firm to prove self-employed status, when disputed, rather than on the worker to do so through the courts
A pilot of a wage premium above the National Minimum Wage and National Living Wage on non-guaranteed hours. This might prompt employers to consider offering more stable work: for example, by providing shift details and staff rotas in advance
Enabling enforcement bodies to issue punitive fines for noncompliance to help ensure that the risks of being caught outweigh the gains companies stand to make from illegal practices. Concentrated “deep dives” in industry sectors and geographic areas, where there is evidence of abuse, by all the enforcing bodies should become a regular part of the armour to protect vulnerable low paid workers