When the former Prime Minister, Theresa May, commissioned Matthew Taylor to conduct a review of the UK’s employment framework, he made a number of recommendations about ways in which the government could future-proof the labour market. One of the key areas that he wanted to modernise was the employment rights of casual workers. Britain has one of the most flexible labour markets in the world and while the Government is keen to retain this, the Taylor report recognised that there needed to be much better clarity on employment rights and their enforcement.
Currently, there are three categories into which individuals who work for a business can come under: there are ‘employees’ who work under employment contracts; ‘self-employed’ people who run their own business and work for themselves ; and then there are ‘workers’ who have a more casual and flexible relationship with the business and where there is no obligation to provide them with work or any obligation on their part to accept work when it is offered.
There has been a dramatic increase in the number of ‘workers’ in the UK, particularly with the rise of the gig economy. However, Matthew Taylor found that a small number of employers misuse the current system by, for instance, cancelling work at short notice, sending staff home when customer demand is low and even keeping workers without contracts even though they are regularly doing the same or even longer hours than people employed by the business.
The Government accepted the vast majority of Matthew Taylor’s recommendations and in the Good Work Plan proposed a programme of changes to tackle so-called one-sided flexibility. This includes measures coming into force on 6 April 2020 to give all workers the same rights as employees to a statement of main terms and requiring this to be made available on day 1 of their engagement.
Let’s say, for instance, that a freelancer has worked for the same company for three days per week for the last eight months with plenty of upcoming work scheduled. Although she was originally taken on to do ad hoc pieces of work, she is now providing work on a regular basis. The business expect her to do the work personally and would not be happy for her to send someone else to do it in her place. Although she is treated as self-employed, the reality is that she is at the very least a worker for employment rights purposes and therefore should be receiving holiday entitlement, national minimum wage etc.
Although the Government is keen that the new reforms will not restrict the flexibility currently enjoyed by employers, Citation surveyed 1,000 decision-makers at businesses around the United Kingdom and found that almost one-quarter of them (22%) will actually be less likely to hire casual and flexible workers after April 2020.
Nevertheless, most employers agree with the changes proposed in the Good Work Plan. 40% of British businesses acknowledged that they would still hire casual and flexible workers, even if they had a right to request more predictable and stable contracts (a proposal which is in the process of being implemented). Meanwhile, 33% of decision-makers even felt that they would be more likely to hire workers if they were on a stable contract.
You can find out more about how the Good Work Plan will affect your business by downloading our white paper here.
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