Employment status review announced in response to Taylor report
23 November 2017
In the autumn Budget, the Government has indicated for the first time how it intends to respond to the recommendations made by Matthew Taylor in his review of modern working practices.
Previously, the Government had been relatively quiet about how it would take forward those recommendations. In the Budget, however, it commits to publishing an employment status “discussion paper” as part of the response to the review. This suggests something short of a consultation on concrete reform proposals, but the paper will explore “the case and options for longer-term reform to make the employment status test for both employment rights and tax clearer”.
The issue of employment status has remained a significant area of focus since the publication of Matthew Taylor’s Good Work Review in July, which called on the Government to clarify the relevant legislation and made various recommendations to help achieve this. Since then, legal challenges have continued - most recently with the EAT deciding that drivers engaged by Uber were workers, while the Central Arbitration Committee ruled that Deliveroo riders were genuinely self-employed on the basis they can use a substitute to perform their deliveries.
Meanwhile, shortly before the Budget, two select committees (Work and Pensions and Business, Energy and Industrial Strategy) published a joint report and draft Bill designed to increase clarity on employment status. The report recommends that legislation should reflect the case law in this area, emphasising the importance of control and supervision rather than the right of substitution when distinguishing between workers and the genuinely self-employed. Among its other recommendations, a new model of “worker status by default” is suggested for companies with a substantial dependent workforce currently treated as self-employed.
The continued activity in this area over recent months may well have prompted the Government to take this first step. Once the discussion paper is published, the Government intends to work with stakeholders to ensure that any potential changes are considered carefully. It remains to be seen how transformative the end result will be.