Employment status- where are we?

Is someone an employee, a worker or self-employed? “What is your Employee Status?” has not always been the easiest question to answer.

Back in July 2017 the Taylor Review published its report on Modern Working Practices, in which amongst other legal issues it discussed employment status. In response to this in February 2018 the government published its response to the Taylor Review and recognised the following issues:

  • There is a lack of clarity and certainty surrounding the tests for employment status.
  • The current three-tier approach to employment status in employment rights (employee, worker and self-employed) should be retained as it remains relevant in the modern labour market.
  • An online tool could be useful in helping determine employment status.

Having identified these issues the government launched a consultation in February 2018. Presumably due to the pandemic the governments response to the employment status consultation was significantly delayed. The response was finally published on 26 July 2022. So does this once and for all clear up the confusion and provide clarity on employment status? Unfortunately not – there was little consensus on what action the government should take to address the concerns. Those responding to the consultation agreed that there is no easy solution, and that it would be complex to implement any reform around employment status. There was no consensus on what to do about legislation either.

So where does this leave us? Despite promises back in 2018 of legislation to clear things up, the UK labour market has changed significantly due to events of recent times. At present there are real uncertain economic times largely due to the pandemic and significant uncertainty in the economy has led to increased costs for businesses. Whilst the government acknowledges the problems with the current system, the benefits of creating a new system are currently outweighed by the risk associated with legislative reform. On the one hand reform may bring clarity in the long term, it might create costs and uncertainty for businesses in the short term, at a time when they are focusing on recovering from the pandemic. So for now, the government has decided not to go ahead  with any new legislation of employment status. Instead the government believes that existing case law and new guidance will help provide clarity on how to approach employment status questions. The government has published new guidance (non-statutory – so does not change the law) on employment status, which will be particularly useful to those who recruit in the travel industry who use a combination of employees, workers and self-employed as part of their workforce. Establishing the status of each individual is important so that the associated rights and protections under law can be considered, risks and costs weighed up and appropriate contractual documentation put in place.

This is one of the most frequent areas that I advise the travel industry on so if you would like help navigating through this midfield, an audit of your existing practices or help drafting appropriate documentation please do get in touch.

For help and advice on employment issues within the travel industry, contact;

or call;

0113 258 0033

This article was originally published on: 3 August 2022

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