The Government’s much-anticipated response to the Taylor review of modern working practices was published yesterday. The response has been welcomed by the report's author as ‘making a difference to vulnerable workers’ although ‘much more to be done’ is his more apt comment.
Matthew Taylor’s July 2017 report was widely acknowledged to be a blueprint for best practice in workforce arrangements in the 21st Century and it included a wide range of recommendations with implications for both employment law and tax.
The Government’s response reflects the need to provide more certainty to both employers and individuals about working rights status from both an employment law and tax perspective. It referenced the need for effective enforcement of existing rights to holiday and sickness pay as well as naming and shaming for employers who default on Tribunal awards. The response included suggesting higher penal Tribunal awards against employers who showed malice or gross negligence towards staff.
Little is said about giving workers a voice – one of the key engagement strategies suggested by Taylor to act as a spur to productivity, however the Government has responded positively to Taylor’s call for a statement of rights on day one for all workers including pay and deductions.
Speaking at an RSM event last year, Matthew Taylor stressed the value to UK business of adopting the wide concepts of his overarching theme of ‘Good Work’ – a term now adopted by the Government in its ‘Good Work Plan’, but he indicated that he would prefer the Government to achieve this with ‘a nudge not a shove’.
From a tax perspective one recommendation from the Taylor report that has been rejected is the proposal to reduce the difference between the National Insurance contributions of employees and the self-employed. It appears that the Government has no plans to revisit the issue.
However, the wholesale redefinition of status structures in employment rights proposed in the review was referenced in a press release today from the Government, announcing that a consultation on this issue will begin.
Interestingly it has also been announced that ‘the government will work with industry to consider ways of encouraging the development of online tools for self-employed people to come together and discuss issues that are affecting them.’
It was announced in the 2017 Autumn Budget that the Government would also consult on how to tackle non-compliance in relation to off-payroll working in the private sector, with one option being to mirror the IR35 rules introduced in the public sector from 6 April 2017.
In his speech at the RSM event in November 2017, Taylor also said that the UK’s flexible labour market is ‘good for the future’ but bemoaned the undercutting of fiscally sustainable businesses by less fair models.
As the consultations are published we will watch this space with interest.