The findings of the Taylor Review have been published. While the wholesale review of employment status which some envisaged has not come to pass, the emphasis on a simpler and clearer approach is certainly a welcome one for employers and employees. If the Review's recommendations are implemented, there will be changes that will affect social landlords.
The Review's purpose
The Government commissioned the Review in October 2016. Led by Matthew Taylor, the Chief Executive of the Royal Society of Arts, the Review considered how employment practices need to change. Amongst other things, the Review was asked to look into whether current definitions of employment status should be updated to reflect new and increased forms of working created by emerging business models, such as on- demand platforms and delivery services.
A shake-up of employment status?
The Review recommends that the Government takes a fresh look at existing law governing employment status and makes it simpler and clearer. There is an existing range of tests and factors which the courts have established to help them decide whether someone is an employee, a worker or self-employed. The Review recommended that they be considered and the legislation updated if necessary to incorporate them.
"Workers" replaced with "dependent contractors"
The Review recommends that the definition of "worker" is amended so that the obligation to provide personal service is no longer an automatic barrier to accessing basic employment rights. It also recommends a new classification so that people who are eligible for "worker" rights but are not employees, should be referred to as "dependent contractors".
The Review states that the dividing line should be between the new "dependent contractor" status and self-employment, so that being employed for tax purposes naturally means an individual is either an employee or a "dependent contractor".
Aligning employment and tax status
The Review also seeks to align employment status legislation and tax status legislation, so that the current difference between the two is reduced to an absolute minimum. The Review states that the dividing line should be between the new "dependent contractor" status and self-employment so that being employed for tax purposes naturally means an individual is either an employee or a "dependent contractor".
The Review suggests that an online tool could be developed to provide individuals with an indication of their employment status.
Casual workers
Zero hours contracts are here to stay! The Review notes that flexibility in the labour market is important and should be retained. However, there is an acknowledgment that employers "could be more forward thinking in their scheduling".
A potential significant change is that it recommends that the Government asks the Low Pay Commission to advise on the impact of bringing in a new higher National Minimum Wage (NMW) for hours which are not guaranteed in a contract.
The Review recommends that the Government re-examines the rules on what information needs to be provided to agency workers before accepting work. It recommends amending the legislation to improve the transparency of information which must be provided to agency workers both in terms of pay and those responsible for paying them.
According to the Review's findings, some companies are relying on temporary workers to fill longer term positions, thereby avoiding taking on individuals as employees. The proposed solution is for the Government to introduce a right to request a direct contract of employment for agency workers who have been placed with the same hirer for 12 months and an obligation on the hirer to consider that request in a reasonable manner. For those on zero hour contracts who have been in post for 12 months, it recommends there be a right to request a contract that guarantees hours which better reflect the hours worked.
Greater transparency
The Review suggests that people could be provided with helpful information when they start work and recommends that the written statement of employment particulars which currently only has to be provided to employees, should also be provided to "dependent contractors".
The Review recommends that there should be a statutory requirement for both an employee and a "dependent contractor" to receive a written statement on day one of their job.
Good employment relations
The Review seeks to encourage the promotion of good employment relations via a push for greater transparency surrounding employers' practices in relation to their workforces. It recommends the introduction of new duties on employers to report certain information on workforce structure, such as the use of agency services, requests from agency workers for permanent positions and requests from zero hours workers for fixed hours after a certain period.
What are the implications for social housing providers?
It remains to be seen to what extent the Review's recommendations will be implemented, but in the meantime social housing providers should ensure that they understand which "status" category their staff currently fall into and how they may be impacted. For those using zero-hours contracts, be aware that there may be a new higher NMW rate for any non-guaranteed hours worked under such contracts. Social housing providers will also need to be aware that long-term use of agency workers and zero hours workers may no longer be a way of avoiding hiring a permanent employee or avoiding a guarantee for hours which reflect those actually worked.
