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Employment status — reform proposals
[ch 2: page 33]In 2017, the government commissioned the Taylor review, Good work: the Taylor review of modern employment practices. The review, by Matthew Taylor, Chief Executive of the Royal Society of Arts, made a series of recommendations, several of which impact on the issue of “employment status”.
In response, the government published its Good Work Plan in December 2018. The government accepted Taylor’s call for more clarity in employment status laws to reflect the “reality of modern working relationships” and has promised to change the law and to produce new guidance and online tools “to help people understand their status”. The Good Work Plan followed a government consultation on employment status that ran until June 2018. The government proposes to “codify” the main employment status tests (see below) into an Act of Parliament.
One specific issue highlighted by Taylor is the role currently played by “substitution clauses” in determining someone’s employment status. A substitution clause is a written contract term that allows you to send someone else of your choosing to do your job in your place. It is a common mechanism used to evade worker rights. Taylor has recommended that to reflect “new business models”, greater emphasis should be placed on control and less on the “notional right — rarely exercised in practice — to send a substitute”. The promised new legislation may attempt to tackle this issue.
The government has also accepted a recommendation that the employment status regimes for tax and employment rights should be more closely aligned, to deter misclassification of workers to avoid tax. Independent research has been commissioned to support the development of new legislation.