Out-Law News

‘Time for clarity’ on employment status after Uber ruling

Diane Nicol tells HRNews about the Taylor Review’s ‘dependent worker’ proposal

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  • Transcript

    Will the government codify employment status? When will we see the Employment Bill back in parliament? Will the Taylor Review's recommendations on employment status be taken up by the government?  These are some of the questions circulating since the Supreme Court handed down its decision in the Uber drivers' case on 19 February ruling that the drivers were 'workers', not self-employed ending 5 years of bitter litigation. Back in 2017 the Taylor Review, led by Matthew Taylor, put forward a number of recommendations to government to improve workers' rights. On the day the judgment was handed down Personnel Today ran an article highlighting how he thinks the government is losing interest in reforms. Taylor’s role as employment rights tsar remains vacant after his term expired in January – not a good sign in his view – and he told the Guardian there was a 'deafening silence' from ministers on the reforms to the gig economy and he criticised the government for the delays to employment reforms. On the day of the Uber ruling he took to Twitter to congratulate the drivers and their team saying 'The courts are doing the work the Government has failed to do in clarifying and tightening the criteria for genuine self employment'. He was referring to the lack of progress with the government's employment bill which was promised before the UK formally left the EU as the central mechanism to safeguard workers’ rights. On the bill, the Guardian says sources close to the government have said it is unlikely to be launched until late 2021 or even early 2022. A business department spokesman said launching the bill was a matter of securing parliamentary time, adding that “protecting and enhancing workers’ rights is an absolute priority for this government.

    The Taylor Review made 53 recommendations and most have been accepted by the government but, notably, the proposal on employment status has not been taken up - that was for a completely new category of worker to be brought in. His panel back in 2017 included our own Diane Nicol so who better to get a view on that point, and what might happen going forward?. I spoke to Diane who joined me by video-link from Glasgow and I started by asking about the name they gave to that new category:

    Diane Nicol: "The name that Taylor came up with was ‘dependent contractor’ which was to replace 'worker' and to maintain the three tier system that we have in terms of employment law under the current regime, which is 'employee', 'worker' - which we wanted to call 'dependent contractor' - and 'self employed', because we thought that the three tier system worked well, was very flexible, was something that was aligned to the gig economy and provided the flexibility that was required, but we also wanted to ensure the protection of those who fell into the middle category of, then, worker and what we wanted to call dependent contractor, and that was all related to control. Interestingly, the Uber decision which came out just over a week ago has focused on the control around the individuals in that particular case and in establishing worker status and that certainly is where we were coming from in relation to recommending that there be clarity on dependent contractor status and that that be legislated on so that workers did not have to spend almost five years going through the employment tribunal, the courts, the Court of Appeal, up to the Supreme Court, to find out what their status was. So that was very important in ensuring that workers were protected. It was clear who they are and, unfortunately, this has not come to pass because of all the recommendations, although many of them have been implemented, this is one which hasn't and it has been put into the 'too hard' basket."

    Joe Glavina: "Can I ask you about that 'too hard' basket, Diane, because, in fairness to the government, they would argue that relabelling workers as 'dependent contractors' won’t achieve anything if the distinction between the categories remains as difficult to pin down. New legislation can't solve that fundamental problem."
    Diane Nicol: "That's a good point, and certainly it's not going to be an easy issue to address. However, I think what we need to remember is that we in the Taylor Review didn't just recommend that. One of the issues that pushes people into 'self employed versus employed' status is the current tax regime, which is binary - you're either employed or you're self employed. So we thought that if you had a tax regime that was more closely aligned with the three tier employment regime, and you try to bring them closer together so that tax wasn't a driver for pushing people into a self employed status, then we would get more traction, if you like, in relation to this and we could achieve more clarity around who was a dependent contractor and who was genuinely self employed because those engaging them wouldn't be pushing them into the self employed category in order to avoid paying NICs and various other and benefits to them."

    Joe Glavina: "Yes I see how that joined up approach might work. Mathew Taylor has got a new job so who is pushing for this?"

    Diane Nicol: "Well, we have been promised an employment bill for over a year now and quite frankly the government obviously has had other priorities in relation to COVID-19 and so on, but there are people behind the scenes who are pushing for clarity on this - obviously some of the unions and the TUC - and to be fair to Matthew Taylor, although he has a new job, he is a regular Tweeter about the fact that the government has really let the Taylor Review down by not focusing on this issue and providing clarity and he was tweeting again only a week ago, when the Uber decision came, calling for them to act."

    Joe Glavina: "What would you like to see happen for the benefit of hirers?”

    Diane Nicol: "For the benefit of hiders, and those who engage workers, I think I would like to see some clarity. I do think there are complexities around drafting the legislation, and so on, but is it really fair to businesses like Uber, and lots of other engagers, that they themselves don't know whether they are engaging workers or those who are self employed and may have liabilities going back many, many years, not to mention the rights and the uncertainty for the workers themselves. So I think it's really important as we progress in the gig economy that there is certainty. Furthermore, issues like 'multi-apping'. So not just in the private hire industry, but people are multi-apping in relation to all sorts of industries and they need clarity, those industries, as to what that actually means for them. Who is the multi-apper working for? Are they working for nobody? Are they truly self employed? These questions are all still unanswered after the Uber decision which, although multi-apping was touched on in the earlier decisions, the Supreme Court weren't making a decision on that particular issue, which is important because the industry, the gig economy, has progressed significantly since that case started in 2016. So I think the future needs a bit of clarity and that's what we were saying back in 2017 when we reported on the Taylor Review, and that's what I'm saying now."

    Finally a word on the employment bill. This is the Employment Bill 2019-20 which was announced in the Queen’s Speech on 19 December 2019. No date is yet available for second reading. On the timing, as we mentioned earlier, the only clue we have is from the Guardian which says that sources close to the government have said it is unlikely to be launched until late 2021 or even early 2022. We will be tracking that closely for you.


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