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Employment law reforms will focus on 'quality' of UK work, as well as quantity of jobs, says government

The UK government will place the same focus on 'quality' of work as quantity of jobs, and report on this annually as part of efforts to ensure that employment laws reflect modern working practices.07 Feb 2018

It has committed to "not just protect but build on workers' rights" in its response to an independent review, led by labour market expert Matthew Taylor.

Alongside its response, the government has published four consultation papers exploring how best to give effect to the recommendations of the review, which may include new legislation. The papers cover enforcement of employment rights, particularly on behalf of low-paid and other 'vulnerable' workers; changes to clarify the law around employment status; potential changes to the rules around agency workers; and measures to increase transparency in the UK labour market.

"We recognise the world of work is changing and we have to make sure we have the right structures in place to reflect those changes, enhancing the UK's position as one of the best places in the world to do business," said UK prime minister Theresa May.

The government noted, however, that the review raised "complex issues", and said that it would "consider the impacts of these reforms on business and other groups before implementing changes".

"We've been pleased with the level of engagement – not just from government but from employers and employee representative organisations across the UK and politicians across the political divide – since the publication of our findings," said employment expert Diane Nicol of Pinsent Masons, the law firm behind Out-Law.com, who was appointed to the Taylor review.

"The government has accepted many of our recommendations and in some areas has proposed going slightly further to protect those who may be exploited by one-sided flexibility whilst retaining the flexibility that the British economy benefits from. There needs to be some consultation on certain proposals. The changes can then be put forward as legislation, a good start on which was made by the select committee which previously reviewed the report and made recommendations," she said.

Published in July 2017, the Taylor review made 53 recommendations for changes to employment laws and practices to better reflect modern working patterns. The government has accepted all but one of these recommendations: a proposal to reduce the difference between the National Insurance contributions (NICs) of employees and the self-employed, which it already ruled out as part of the 2016 Budget.

The government is consulting on how best to take forward Taylor's recommendation to introduce more certainty and clarity over whether people in work qualify for full employment rights, should be classed as workers or 'dependent contractors', or should be classed as self-employed. As part of the consultation, it is seeking views on whether there are alternative approaches that could better achieve these aims, and whether any changes are needed to the tests that define the boundary between employment and self-employment for tax purposes.

A second consultation proposes a new set of 'day one' rights for all those classed as workers, including casual and zero-hours workers. These include sick pay and holiday rights, and a new right to a payslip. All workers, including zero-hours and agency workers, could also be given a new right to request a more stable contract, depending on the outcome of the consultation.

The government is also seeking views on how best to enforce a wider range of basic employment rights on behalf of the most vulnerable workers, potentially by HM Revenue and Customs (HMRC). It intends to introduce a 'name and shame' scheme for employers who fail to pay employment tribunal awards against them, and has proposed tougher penalties for employers who show "malice, spite or gross oversight" or who have previously lost similar cases at a tribunal.

The government has also proposed more transparency around agency workers' contractual arrangements, including a clear breakdown of who pays them and any costs or charges deducted from their wages. It is also considering extending the scope of the Employment Agency Standards Inspectorate (EAS) to cover umbrella companies and intermediaries which supply agency workers. The Low Pay Commission will be asked to consider the potential of a higher minimum wage rate for workers on less secure zero hour contracts.

The reform package also includes measures to boost take-up of existing employment rights. The government will also work with businesses to promote awareness and take-up of the right to request flexible working introduced in 2014; launch a campaign to encourage more working parents to opt for shared parental leave; and make sure new and expectant mothers, as well as their employers, know their workplace rights and obligations.

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