Matthew Taylor, chief executive of the Royal Society of Arts, has undertaken an independent review of modern working practices entitled Good Work’.   The report outlines seven key policy approaches to address the challenges facing the UK labour market and towards fair and decent work with realistic scope for development and fulfilment.

One of the main recommendations of the report is that the category of people who are eligible for worker rights, but who are not employees, should be renamed as ‘dependent contractors’.  In addition to this it is
asking that legislation is developed that will provide guidance on how to determine employee or contractor status.  This will also assist individuals who wish to raise a claim through an employment tribunal, as there would be an earlier determination on status from the court without having to pay fees for doing so.  There is also an intention that the onus should be on the employer to prove that a particular employment relationship does not exist.

There are many other proposals within the report which, if implemented, will have an impact on businesses in relation to employment legislation.  For instance, there is a suggestion that a written statement should also be extended to workers as well as employees and that this should be issued on day one of employment. Also, where an employer has not provided a written statement, for the employee to have a standalone right to compensation through the employment tribunal (currently they can only adjoin this to another claim i.e. unfair dismissal).  This means that employers will need to ensure that they have the resources in place to be able to meet this requirement; otherwise there could be financial penalties.

The report highlights that many employees on zero hour contracts are still unaware of their entitlement in relation to holiday pay and that the pay reference period should be extended from 12 weeks to 52 weeks, which would take into account the seasonal nature of work. Additionally it proposes that for those employees on zero hour contracts, who have worked for longer than 12 months, be given the right to request a fixed hour’s contract.

In addition to the above recommendations, the Government is also being asked to consider over the coming year the following matters:-

  • Task the Low Pay Commission with examining how a higher National Minimum Wage rate might apply to non-guaranteed hours.
  • Draw on expert bodies to drive a much greater push on what constitutes good workplace relations, especially in sectors with high instances 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.
  • Enhance state enforcement of basic rights, considering the remit of HMRC and EAS in protecting the most vulnerable workers. As a start, this should include an end to the use of ‘Pay between Assignments’ contracts.
  • Ensure more robust penalties are in place to deal with those employers who choose to ignore the courts, either by failing to pay financial awards or failing to apply judgments to other relevant relationships in their workforce.
  • Seek to examine ways in which the tax system might address the disparity between the level of tax applied to employed and self-employed labour.
  • Examine the most effective ways to ensure self-employment is considered alongside employment at those points where people make career decisions, both through Jobcentre Plus and the National Careers Service.
  • Government should invest time and money in technology, encouraging digital solutions to support self-employed people comply with their legal requirements as well as think about the future, through the provision of a Catalyst environment.
  • Consider how embracing the move towards cashless transactions can both support self-employed people and consumers in making informed decisions as well as supporting HMRC in addressing the tax gap by looking to extend the principles of conditionality as far as possible.
  • Publicly commit to delivering quality work, making the Secretary of State for Business, Energy and Industrial Strategy responsible for reporting success against a set of metrics on an annual basis, with the first report in 2018 acting as a baseline for measuring future success.
  • Ensure the forthcoming Industrial Strategy makes the most of the opportunities a more productive workforce can deliver, especially in lower-paid and lower-skilled sectors, identifying ways in which automation and AI can enhance the quality of work.
  • The LPC should have its remit widened so that it can both make recommendations to Government on what needs to change (including NMW rates) to improve quality of work in the UK. It should also work with employers, employees and stakeholders to promote quality work across all regions and sectors, focusing to begin with, on driving productivity in the retail, care and hospitality sectors.

If you do not already have a written statement of particulars (i.e. contracts of employment) in place for your employees or would like to understand the implications on your business should these proposals be implemented then please call Practical HR on 01702 216573 or email