The Committees (chaired by Frank Field and Rachel Reeves, both Labour MPs) have taken the opportunity to remind Theresa May of the promises she made on her first day in office to protect workers and those without job security. In a forthright statement the Committees declared “the law must not allow willingness to exploit workers to be a competitive advantage” and “the Bill would put good business on a level playing field, not being undercut by bad business“.
The report recognises the importance of new business models built around flexible work on digital platforms as a key contributor to Britain’s prosperity. However, with this change in the world of work comes confusion about the rights and entitlements of workers and the potential for exploitation. The report states that some of Matthew Taylor’s recommendations can be satisfied by policy changes or secondary legislation but the “most transformative” require primary legislation. Whilst apologising modestly for the drafting, the Committees request the Government to engage in the spirit of the Bill.
The following are the highlights from the draft Bill:
The Committees went on to recommend the following:
The Committees have certainly not held back and have sought to implement the majority of the Taylor Review recommendations. Whilst recognising that the Government is otherwise occupied trying to seek the best possible Brexit deal, the Committees have urged the Prime Minister not to let the urgent issue of Britain’s labour market to fall by the wayside. The Committees emphasises a number of times that businesses should not gain a competitive advantage by exploiting their workforce, “a race to the bottom risks undercutting the vast majority of businesses that do treat their workers well“.
The reforms suggested are fundamental and, if enacted in their present form, bode an end to decades of case law. However, arguably the principles set out in the draft legislation don’t offer anything new. We already have an extensive body of case law on the issue of employment status and experienced judges to apply that law to different situations. Having statutory tests may simply shift the judicial debate to the meaning of the legislation (which clearly has not been written by parliamentary draftsmen).
What is perhaps more radical is the “worker by default” position. This change would have a significant impact on the gig economy. With over one million people working in this sector and a number of innovative, tech-based companies basing their entire business model on a self-employed contractor basis; “worker by default” is a game changer. Worker status brings with it a number of additional employment protections including: NMW, holiday pay and increased discrimination protection. Businesses would need to factor in the additional costs and re-work their business model to ensure the customer experience is not lost.
Although the changes suggested are substantial, it is still early days in the process. We wait with anticipation to hear the Government’s response to this report and draft Bill; however the Government’s appetite for reform in this area is still uncertain and with Brexit to contend with it is unlikely the changes suggested will find themselves high up on the Parliamentary agenda. We will keep you updated.