A Framework for Modern Employment report

Following the recent scrutiny of companies such as Uber and Deliveroo, the gig economy has been thrown into the spotlight again with the publication of a joint report and draft Bill by the Work and Pensions Committee and the Business, Energy and industrial Strategy Committee, ‘A Framework for Modern Employment’. The report and draft bill carry forward many of the recommendations of the Taylor Review and aim to restrict perceived abuse of self-employment in the gig economy with further clarification on employment status.

The report details the following conclusions and recommendations;

• Clearer legislation on employment status – to include emphasis on control and supervision rather than just the right of substitution
• Categorisation of worker by default with requirement to prove the contrary
• Introduction of a premium rate of minimum pay for workers who work non-contracted hours
• Extension of the linking period for breaks in service so that employment rights will honour original start date where a break is for one month or less (currently one week)
• Obligation on employment tribunals to consider harsher measures where an employer has already lost a similar case
• Avoidance of legislation which will undermine the National Minimum Wage
• Extension of the duty of employers to provide written statement of employment conditions to workers as well as employees
• Inclusion of workers in headcount in determining if the Information and Consultation of Employees regulations apply
• Removal of option for use of a derogated contract in application of the Agency Workers Regulations 2010
• Introduction of stronger and more deterrent penalties for repeat or serious breaches of employment law including a ‘naming and shaming’ regime
• Adequate resourcing of the Director of Labour Market Enforcement and enforcement agencies to demonstrate proactive enforcement

The draft bill introduces a series of measures for amendment to the Employment Rights Act 1996, designed to assist in the classification of an individual as either an employee, a worker or an independent contractor. Notably, there is a stance whereby, in making a compliant to tribunal it would be assumed that the individual was a worker unless proved otherwise. The change to this default system would put the onus on companies to prove genuine self-employed status. The default worker status would mean that thousands of people who are potentially being wrongly classified as self-employed would be entitled to employment rights such as holiday pay and pensions.

Aspire Comment

The draft bill comes after increasing concern in relation to employment status and the conflicting rulings of Uber and Deliveroo. We have already seen the Taylor Review published which identified many discrepancies in our current labour market and the lack of clarity in current laws and legislation which govern employment.

We will now have to wait to see the reaction of Government to this report and to what extent its recommendations are taken on board.

It will also be interesting to see what the Chancellor will say in his Budget later this week (Wednesday 22nd November) with expectation rife that he will take further measures in regard to off-payroll working via personal service companies.

If you are concerned about your contractual documentation you have in place, or your engagement of self-employed workers, please get in touch with Aspire to discuss how we can help.