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25th January 2019

Gig economy reform – The Good Work Plan

25th January 2019

Gig economy reform – The Good Work Plan

Andrew Willshire

Posted: 25th January 2019

T: 023 8048 2160

E: Email Me

In our recent articles which can be found here and here, we have looked at the problems caused by the gig economy and the conflicting case law in this area. We have been waiting for some time for the Government to address these issues which were acknowledged in the Government commissioned Taylor Review which was published in 2017.

In late December 2018 the Government published its proposals to address these problems under its “Good Work Plan“.

What are the proposals under the Good Work Plan?

The Good Work plan sets out a number of changes for employment law generally, including changes to holiday pay calculations, and naming and shaming employers who fail to pay tribunal awards.

In relation to the gig economy the key proposals are:

  • A right to request a more stable and predictable contract for workers
  • Changes to make it easier for casual staff to establish continuity of employment
  • Employment status tests to be refined after further research
  • New online status tool
  • Improved written statements for terms for all workers from day one.

We’ll look at these in more detail in turn below.

A right to request a more stable and predictable contract for workers

The Government proposes to introduce a new right for all workers to request a more predictable and stable contract after 6 months’ service. They give an example of a zero hours worker who tends to work at least 30 hours a week requesting a contract that guarantees at least 30 hours a week.

The employer would have to respond within three months and deal with this in a similar way to a flexible working request, including meeting with the employee to discuss the request.

Changes to make it easier for casual staff to establish continuity of employment

Continuity of employment is important for employees to establish certain employment rights, for example protection from unfair dismissal and the right to a redundancy payment which employees establish after 2 years’ employment. At the moment a gap of a whole week in employment can break this continuity. These means casual employees find it difficult to accrue these rights if they regularly have one or two week gaps between assignments.

The Government is going to change the rules so that only a gap of one month will break continuity. Draft legislation has already been published and this change is due to be introduced in April 2020.

Employment status tests to be refined after further research

Unfortunately, although the key area where clarity is needed for the gig economy, the Government’s proposals for this change are still unclear.

The Taylor Review suggested changes to the definition of worker so this is clearer and more consistent and a new category of “dependent contractor” be created. It also proposed that there should be less emphasis on whether the individual had to perform work personally, and more on the level of control the company had over the individual and the way they performed the work.

Under the Good Work Plan the Government says it will “legislate to improve the clarity of the employment status tests reflecting the reality of modern working relationships”. However, unfortunately it provides no more detail at this stage.

Although the Taylor Review specifically recommended that sham substitution clauses should be dealt with, and the tax and employment law tests for worker status be aligned, these are not addressed by the Good Work Plan. Neither is the proposal that the test should be reversed, so worker status is assumed unless the company establishes otherwise.

The proposal is for the Government to commission further research on the correct test. It is therefore simply a plan to make a plan at the moment. The proposal to introduce an online status tool for individuals to use to check their employment status will also be on hold until the new worker status test has been decided.

For the time being, employers in the gig economy therefore unfortunately remain in a state of uncertainty.

Improved written statements for terms for all workers from day one

Finally, the Good Work Plan does confirm that all workers will be given the right to have a written statement of terms (which is currently only a right available for employees) and for this statement to given on or before the first day of work (at the moment this must be given within two months).

Under the proposals the information given will be expanded to include all pay and benefits, specific days and time of work and notice periods. These changes will come into effect in April 2020.

EU proposals to boost workers’ rights

Workers’ rights were also recently discussed by the European Parliament committee of MEPs which approved new rules on minimum rights for workers in the gig economy.

The first recommendation is that all workers need to be informed from day one of the essential aspects of their employment such as notice periods and basic salary. This is reflected in the Good Work plan above.

Secondly, they propose that workers should be informed about guaranteed paid hours and the remuneration for over-time. They also added that predictable working hours should be introduced to give a minimum level of stability and predictability and workers should be able to refuse an assignment outside of predetermined hours or be remunerated if the assignment is not cancelled in time. In addition, employers of gig economy workers should not hinder workers from taking jobs with other companies.

Lastly, they propose probationary periods should be no longer than six months or nine months, in the case of managerial positions. Furthermore, mandatory training should be provided by the employer free of charge and should be completed within working hours.

The above will now be negotiated by the European Parliament and Council in order to produce the final rules. Although, it is likely that by the time the rules come into force the United Kingdom will no longer be subject to EU jurisdiction, it will be interesting to see how this approach affects our national law.

If you are concerned about the status of individuals working for your organisation, or have any questions in relation to the gig economy, please contact myself or Sarah Hayes.

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Andrew Willshire

Posted: 25th January 2019

T: 023 8048 2160

E: Email Me