It’s said that you can’t please all the people all the time and nowhere is this more evident, perhaps, than in the eternal struggle between master and servant, employer and employee; and now taskmaster and gig-er. The terminology and technology may change over time but the fundamental employment challenges in the 21st century remain much the same: worker exploitation, lack of foresight, funding and training to help improve productivity, imbalance of power between companies and individuals, lack of access to justice and gaps in labour law enforcement.
Some of these issues were tackled in published this month and led by Matthew Taylor, CEO of the Royal Society of Arts at the request of the Government. The Review seeks some change across the legal, tax, business and social sectors to address challenges stemming from an increase in atypical working, among others. The Review has been criticised for lacking substance and meaningful proposals whilst Taylor maintains that the focus is on gradual change over a quick fix and that the Review reflects his search for measures that are both progressive and possible.
Today’s landmark Supreme Court judgment in has abolished with immediate effect the requirement to pay tribunal fees for claims. This has overtaken one of the few Taylor proposals on expanding access to justice by entitling claimants to a free initial Tribunal hearing on employment status. We look at this issue in more detail later in the article.
A major challenge tackled by the Review is the confusion, complexity and lack of clarity on the legal definition of “worker” status and the exploitation which can result from this. Such confusion often underpins employment disputes over the right to be paid the minimum wage and holiday pay, the latter proving so thorny in the case of that the courts sought clarification from the European Court. Here we look at some of the Review’s proposals to clear up this confusion.
Let the law do the work on defining worker status
When it comes to determining whether someone is an employee or a worker or an independent self-employed contractor Taylor argues that “the law should do more of the work and the courts less”. The difference in status is important because some rights, such as holiday, holiday pay and the minimum wage are only available to workers and not to independent self-employed contractors. The recent high-profile claims have been by individuals seeking to reject their employers’ imposition of independent self-employed contractor status on them by obtaining a Tribunal ruling that they are workers (or, in some cases, employees) so to gain at least the basic rights or more.
Taylor wants the tests for determining an individual’s status to be more clearly set out in new legislation. The hope is that this would avoid, or at least reduce, the court’s highly fact-based, case-by-case assessment of each individual’s circumstances, the outcome of which often cannot be easily applied to other, similar cases. Such new legislation would no doubt be fraught with drafting difficulty but has nevertheless garnered some support.
Reining in tribunal fees and reversing the burden of proof
The Review’s publication was met with disappointment in some quarters due to its not calling for a total abolition of tribunal fees. The report recognised, “with regret”, that the government was unlikely to scrap the fees. This seems odd and was a wasted opportunity, given the Review recognised the adverse impact of tribunal fees on enforcement of workplace rights. Introduced in 2013, the fees were seen by many as a significant barrier to accessing justice, and proved to be so as evidenced in a 79% drop in claims over the past four years.
However, the seriousness of that omission by the Review was today negated, with perfect timing, in the Supreme Court’s unanimous judgment in R (on the application of UNISON) v Lord Chancellor which abolished tribunal fees on the grounds that they prevent access to justice, are unlawful and indirectly discriminatory. All tribunal fees have now ceased to be payable and all fees paid to date must be repaid. The judgment therefore renders meaningless one of the Review’s key recommendations: that individuals should be able to obtain an initial determination of employment status without paying tribunal fees.
Even without fees, an individual may still face other barriers to acceptance by employers of their correct status as the burden of proving it currently rests with the individual. The Review therefore proposes that the burden be reversed so where an individual brings a claim based on being a worker or an employee, it would be for the employer to prove otherwise.
Dependent Contractor: worker 2.0?
The Review also proposes a new category of Dependent Contractor which would include those who are eligible for worker rights but are not full employees. The stated aim is a more level playing field and better protection for people who are neither employee nor genuinely independent self-employed contractors, like many of the digital platform-based workers at Uber, Deliveroo, and Taskrabbit, to name a few. “If it looks and feels like employment,” Taylor says, “it should have the status and protection of employment.” Whether this would be any more than a re-labelling of the existing category of worker is unclear and the benefit to be gained, particularly as the courts are providing clearer guidance on deciding status in the Uber case and others, is open to question.
Penalties for employers who ignore ‘broadly comparable arrangements’
The Review cites last year’s landmark ruling against Uber, which held that two Uber drivers were workers and not independent self-employed contractors (Uber has appealed with a hearing set for September), as an example of the courts keeping pace with a rapidly changing landscape. At the same time it raises concerns about the lack of applicability of such rulings to the wider workforce. The Uber judgment, the Review notes, only applies to the two drivers named in the decision and in principle, every other Uber driver would require a similar separate ruling in order to be legally recognised as a worker where the employer disputes it. To counter this the Review proposes that where a ruling has been made in favour of a claimant worker and the employer has failed to apply that ruling, the employer should pay penalties and court costs be awarded to the claimant. Such proposals seem relatively easy to implement, uncontroversial and likely to assist in the settlement of group claims.
Will there be an Employment Rights Act 2019? Will HMRC take on the role of enforcing the payment of holiday pay? Will ‘self-employed’ come to mean the same thing for both employment rights and tax purposes? The answers to these questions, and many more, remain to be seen. What is clear is that the Supreme Court decision is far reaching and will have a huge impact on the ability of individuals to enforce existing rights.
The Government is now considering the Review’s recommendations and over the coming months we will hopefully see further detailed analysis of the proposals, along with alternatives to them, from those involved in and with the workplace. At the very least the Taylor Review has given some further food for thought on the current issues.
This article was written by , Partner, Employment, and , Trainee Solicitor.
This guide is for general information and interest only and should not be relied upon as providing specific legal advice. If you require any further information about the issues raised in this article please contact the author or call 0207 404 0606 and ask to speak to your usual Goodman Derrick contact.