Blog: Taylor Review - good time for business to focus on employee engagement

Diane Nicol, head of employment at Pinsent Masons and one of three panel members supporting Matthew Taylor on the Taylor Review, writes about the implications for employers.

As a member of the Taylor Review it is interesting to consider how employers can make a head start on planning for any implementation of the recommendations contained in the Review in to Modern Working Practices.

A number of recommendations should be achievable in the next year or so, while others may require a longer term strategic shift, assuming the Government accepts them. The general thrust of the Review is that the current UK framework works pretty well in terms of flexibility for employers, engagers, and workers (in the broadest sense) and we should not “throw the baby out with the bath water”.

However, the UK productivity gap and exploitation of workers by unscrupulous employers or engagers is still an issue and the Review states that the over-arching goal for the UK should be for “fair and decent work for all”.

To achieve this, and particularly to deal with fast-changing and emerging business models, some areas of employment law and practice need clarification and updating. Some can be adapted to address exploitation where it exists, enhance engagement between employers, engagers and their workers, and raise awareness of their rights and responsibilities.

Key proposals include developing legislation and supporting guidance which clearly sets out the test for employee and dependent contractor (DC - the new name proposed for workers and not a new status as some claim!) to reflect the best of recently developed case law. This will help address the grey area between the DC and the genuinely self-employed which has led to a number of cases involving the likes of Uber. The Review recommends there should be greater emphasis on the control exerted over DCs by those who engage them, and easier access to justice for those who challenge the employee/worker/self-employed status afforded to them.

The right to a written statement setting out terms should be available from “day one” for all employees and DCs, and status is to be supported by an online tool which it is proposed the Government creates for the benefit of employers, engagers and workers alike. If proceedings are necessary to establish status, the burden of proof should be shifted to the employer to prove that the individual is not an employee or DC.

The piece-rate legislative framework which is based on output should also be adapted to ensure gig economy workers, for example, can enjoy the protection of the National Minimum Wage but there should be a balance on the calculation of working time so that businesses operating platforms or the like can continue to develop.

Also recommended is a renewed focus on workforce engagement, particularly in low paid sectors and those with high numbers of atypical workers. To support better workforce engagement, there is to be a review of the effectiveness of information and collective consultation legislation, enhanced rights for zero hours and agency workers after 12 months (when requested), the right for zero hours workers to request a contract guaranteeing hours, and for agency workers a permanent contract which the hirer must reasonably consider.

Agencies would not be able to opt out of ‘equal pay’ obligations after 12 weeks and employers would have to report on their workforce structure, detailing atypical working arrangements and agency and zero-hour worker requests for permanency and guaranteed hours.

While these are only recommendations, employers would be wise to review and audit their workforce composition and to assess the status of atypical workers and the rights and benefits they might enjoy under the proposed new regime and the operational and financial impact.

It would also be timely to review collective information and consultation arrangements, be they with Trade Unions or employee representatives, and if there are none, consider whether this should become a priority. More generally, better workforce engagement is a key plank to the concept of “Good Work” which is at the core of the Review, and those who have a good story to tell - and there are many - will have that “head start”.

Whilst the recommendations of the Review are likely to lead to enhanced or, at least, clear rights for some workers, they also present an opportunity for the many good employers and engagers to continue to enjoy the flexibility the UK employment market offers.