Bad Work: the Government’s Response to the Taylor Review

By Dr Katie Bales, Prof Alan Bogg, Prof Michael Ford QC, Prof Tonia Novitz and Ms Roseanne Russell, Centre for Law at Work (University of Bristol Law School).

© Alexander Baxevanis

Don Lane was a DPD courier, whose written contract described him as an ‘independent contractor’, aiming to ensure that he was neither an ‘employee’ nor a ‘worker’ and therefore was not entitled to the legal rights such as  protection against dismissal, the national living wage, paid holidays, or even statutory sick pay. He suffered from diabetes and, having already been fined £150 for attending a hospital appointment earlier in the year, died in January 2018 after working through the Christmas season despite illness. His employers knew that he had suffered from a diabetic collapse at work but adopted a system which strongly discouraged him taking any time off for sickness: no income for sick leave and, worst of all, fines. The media has documented other examples of the abusive treatment of ‘gig’ workers in courier companies such as Hermes and Amazon.

In July 2017, ‘Good Work’, Matthew Taylor’s Review of ‘Modern Working Practices’ was published. The Report aimed to promote ‘good work’ through the adoption of 53 recommendations. In February 2018, the Government published its response, also entitled Good Work, mostly accepting the Review recommendations, but ducking their implementation by offering further ‘consultation’. Accompanying the thinly reasoned Response were four hastily drawn up consultation papers, on employment status, transparency in the labour market, agency workers and enforcement of employment rights.

While the Government says it is contemplating ‘the single largest shift in employment status since the Employment Rights Act in 1996’, its focus is on clarifying rather than extending its ambit. The reason seems to lie in its endorsement of the ‘flexibility’ of the current UK labour market, following Taylor’s lead, enabling individuals and employers ‘to make the choices that are right for them’. The notion that such choices are structurally constrained is ignored; rather the blame is laid at the door of the exceptional ‘bad’ employer. While some improvements are contemplated, they do not broaden the scope of access to statutory rights at work in a way that would have helped Don Lane or will prevent other forms of abuse.

At present, there are two forms of employment status: employees (who have superior rights and protections regarding for example dismissal and sick pay); and workers (entitled to more limited rights including the national minimum and living wage and working time protections). Independent contractors sit outside the statutory employment law regime. Whereas all employees are workers, a subset of workers, known as limb (b) workers, do not meet the requirements of superior employee status. Currently, the status tests are set out in case law, shaped and formulated by judges who have adapted the tests to accommodate complex and changing relationships. This has led to protection of drivers for Uber and Addison Lee.

Taylor recommended codifying employment status tests in legislation, on which the Government will now ‘consult’ to achieve so-called clarity. When a clause in a contract allows substitutes to perform work, this usually prevents a finding of ‘personal service’ and so negates employee or worker status. The abolition of this test is now proposed – a welcome development given how the adoption of such clauses is the latest fashion for avoiding legal obligations, illustrated by the Deliveroo ruling. However, the greater emphasis on ‘control’ proposed by Taylor and now the Government is more problematic.

Control is not an express statutory requirement or even a determinative factor for limb (b) workers (despite the claims of the relevant consultation paper to the contrary). This new criterion would be a backward step. First, it would make it more difficult for gig economy workers, such as the drivers for Uber and Addison Lee to access statutory protections. Second, it would probably mean that agency workers, who typically are not controlled by their agency, would cease to be ‘workers’. The Government proposes consultation on Taylor’s suggestion that statutory ‘sick pay’ (SSP) should embrace ‘workers’ and not just ‘employees’; but this would not apply to anyone hired as a driver who has insufficient ‘control’ over their work. Don Lane and others must still take their chances.

Another problem is continuity. Many working in the gig economy are ‘employees’ for the duration of their hire on a particular day but, owing to the absence of ‘mutuality of obligation’ between assignments, not in any weeks when they take time off, go on holiday or are not offered any work. The result is that they often do not accrue sufficient continuous service for entitlement to rights such as unfair dismissal or statutory maternity pay. The Response proposes increasing the length of gaps which breaks continuity from the current one week to one month, and clarifying the circumstances in which gaps can be bridged. In principle, this is welcome, but no detail is given on the proposed changes. A rushed proposal risks overlooking more fundamental questions. For example, are the rules on continuity justified at all?

The International Labour Organization (ILO) Tripartite Committee considered a two-year qualifying period (needed for most unfair dismissal claims) went beyond the period required to assess if workers are capable in their job and so was not justified. Protection of reputation is an integral element of private life, according to the European Court of Human Rights, and an unjustified dismissal affects prospects of future employment, regardless of length of service, so why require two years’ service? A fundamental reassessment, based on international human rights norms, has been rejected in favour of papering over the cracks.

The Taylor Review recommended that there should be closer alignment between status for tax and employment purposes. Tax law works on a simple binary divide between ‘employees’ and ‘independent contractors’ without recognising ‘worker’ status. Under the current regime, an independent contractor may be a worker for the purposes of certain employment rights but self-employed when it comes to tax (so that no employer National Insurance Contributions are paid). Those classified as ‘employees’ for tax purposes may, oddly, not be ‘employees’ for the purpose of rights such as unfair dismissal or SSP. On the one hand, the Government wants to tackle false self-employment and increase tax revenue. On the other, changing the tax boundaries will be unpopular if greater obligations are owed by employers to those who work for them (possibly promoting ever more inventive and evasive corporate structures and strategies highlighted by the Christa Ackroyd Media Ltd case). Absent from the consultation paper is any proposal to change the two-fold distinction for tax to mirror the position for employment rights.

Ultimately, the Government’s Response on ‘Good Work’ is a disingenuous document. It offers a childlike narrative of ‘good’ employers utilising flexibility contrasted with ‘bad’ employers engaged in evasive exploitation. This politically convenient fairy tale of saints and sinners obscures the central fact that bad work has spread and festered in an era of state deregulation, suppression of organised labour, cuts to public services, and the contraction of the welfare state. That is the true story of Don Lane’s betrayal.

For more analysis of the Taylor Review by Members of the Centre for Law at Work, see:

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