The Taylor report proposes new category of “dependent contractor”

A new category of worker, “dependent contractor”, has been suggested in a range of proposals include in the Taylor review, commissioned by the prime minister, Theresa May, last year to review working practices and models to ensure they were “fit for purpose within the modern workplace”.

The Good work: The Taylor review of modern working practices report, published on 11th July 2017, analysed the implications of new forms of work, including the increase of the gig economy via digital platforms, explored employment rights and responsibilities and also sought to understand whether the regulatory framework surrounding employment was still suitable when considering modern working practices.

The review was led by Matthew Taylor, chief executive officer of the Royal Society of the Arts (RSA).  The review recommends retaining the three-tier approach to employment status, which currently includes employees, workers and self-employed individuals, but renaming those who are eligible for workers’ rights but who are not employees as “dependent contractors”.

The new definition is designed to reflect more casual employment relationships while supporting those who are not genuinely self-employed. When determining dependent contractor status, the review suggests placing greater focus on the principle of control and less on whether there is a requirement to perform work personally.

The report also recommends that employment law be simplified so that individuals can more easily find out their employment status, and therefore what rights they are entitled to.

In addition, the report calls for the burden of proof in employment tribunal hearings where employment status is in dispute to be changed so that the employer has to prove that an individual is not entitled to relevant employment rights.

Tim Leaver, employment partner at Herbert Smith Freehills, has been quoted as saying: “One clearly missed opportunity [in the Review] was to define a new category of ‘gig worker’, which deals specifically with the unique challenges faced in that particular sector, rather than simply harmonising the HMRC and employment law tests, lowering the bar for a national insurance levy, and renaming it ‘dependent contractor’.

“That, in turn, would have given gig platforms far greater flexibility to offer additional protections and rights to their gig workers, through access to training and development and minimum guaranteed access to work and pay, without risking a finding of full worker (or ‘dependent contractor’) status or a requirement to pay national insurance contributions, both of which could seriously impact on the commercial viability of the gig model.”

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