good work · good work 20 establishing measures ... record numbers, supporting many millions into...

Good WorkA response to the Taylor Review of Modern Working Practices

February 2018

Good Work

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A response to the Taylor Review of Modern Working Practices

ContentsForeword 04

Executive Summary 08

Good work 20

Establishingmeasures

Forwardlook

Informed choices 28

Clarityinthelaw

Transparencyofentitlement

A fair deal 36

Genuinetwo-wayflexibility

Inclusivedialogue

Quickandeffectiveredress

Security of opportunity 52

Increasedmobility

Healthandwellbeingatwork

Supportfortheself-employed

Conclusion 66


Foreword from the Secretary of State

Rt Hon Greg Clark MP

SecretaryofStateforBusiness,EnergyandIndustrialStrategy

As the Prime Minister made clear on the steps of Downing Street in the summer of 2016, this government believes in a country that works for everyone.

Nowhereisthatmoreimportantthanensuringeveryone,wherevertheyliveandwhatevertheirbackground,hastheabilitytofindworkandearnalivingtosupportthemandtheirfamily.FromtheintroductionoftheNationalLivingWagetoalmostdoublingthepersonaltaxallowance,thisgovernmenthastakenimportantstepstoensurepeoplenotonlyearnmore,butareabletokeepmoreoftheirmoney.

TheUK’sIndustrialStrategy,publishedinNovember,setoutalong-termplantoboosttheproductivityandearningpowerofpeoplethroughouttheUKbyfocusingonthefivefoundationsofproductivity:Ideas,People,Infrastructure,BusinessEnvironmentandPlaces.GoodworkanddevelopingbetterjobsforeveryoneintheBritisheconomyisattheheartofourIndustrialStrategyvision.

Westartfromapositionofstrength.Theflexibilityofourlabourmarkethashelpedbusinessescreatejobsinrecordnumbers,supportingmanymillionsintowork.Thoseinworkenjoyawiderangeofprotectionstopayandconditions,aboveandbeyondthebasicminimumsprovidedbyEuropeanlaw.

Weareproudofthisrecord,successfullybalancingfairnessandsecurityforthemajorityofworkingpeopleintheUK.

However,itisclearthatnoteveryoneisenjoyingthebenefitsofavibrantlabourmarket.Someinworkstilldonothavetheincomesecuritytheyortheirfamilywant,notknowingwhethertheywillbeabletopaytherentfromweektoweek.Otherscanfindthemselvestrappedinacycleoflower-paidwork,unabletobuildtheskillstheyneedtoprogresstohigher-paidroles.Newbusinessmodelsandmodernemploymentpracticeshavealsoraisedquestionsaboutwhetheremploymentlawsneedupdating.

ThisiswhythePrimeMinisteraskedMatthewTaylorandhisexpertpaneltoexaminetheseissuesinmoredetail,tohelpusunderstandtheopportunitiesoffutureworkingpractices,aswellastoidentifypossiblepitfallsalongtheway.

ThegrowthofthegigeconomyprovidestremendousopportunitiestoimprovethelivesofpeopleintheUK.Withopportunitiescomerisks,andnewwaysofworking,manyofthemtechnologicallyenabled,providetrulyflexibleemploymentoptions.However,thesenewapproachescanbesodynamicastofullystretchourcurrentframeworkof

protectionswiththeriskthattheywillunderminethewholesystem.

TheReviewofModernEmploymentPractices,publishedinJuly2017,made53recommendationsaimedatdeliveringanoverarchingambition:thatallworkintheUKeconomyshouldbefairanddecentwithrealisticscopefordevelopmentandfulfilment.Weagreewiththisambition.Thisdocumentsetsoutthestepswewilltaketoachieveit.

IntheUK’sIndustrialStrategyIacceptedresponsibilityforimprovingthequalityofwork,workingwithothersacrossgovernmentandbusinesstodeliveronthisambition.WearenowpublishingourdetailedresponsetotheTaylorReviewrecommendations.Wehaveacceptedsomerecommendationsnow.Othersrequirefurtherconsultationtodecideonthebestwaytodeliverchange.

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Toinformthisworkwearepublishingfourconsultations.ThesecoverthelegalframeworkunderpinningemploymentrightsinGreatBritainaswellastherightsthemselves.Theyalsoconsidertheenforcementmechanismsinplaceforwhenthingsgowrong.Iencourageeveryonetocontributetothesediscussions.AsthePrimeMinistersaidinherspeechatthepublicationofthereview,throughdebateanddiscussionideascanbeclarifiedandimprovedandabetterwayforwardfound.

IamverygratefultoMatthewTaylorandhispanel,aswellastothemanyotherindividualsandorganisationswhocontributedtoTheReviewofModernWorkingPractices.Iwouldliketotakethisopportunitytorecognisethelong-standingworkinthisfieldofPaulBroadbent,ChiefExecutiveoftheGangmasterandLabourAbuseAuthorityandReviewPanelmember,whosadlypassedawayinDecember2017.Mythoughtsarewithhisfamilyandfriends.

Thequalityofworkaffectsusall.Happierworkersaremoreproductiveandwhenproductivityincreases,theeconomygrows,boostingearningpowerforeveryone.Thegovernmentisacting.WewillmakethechangesnecessarytoimprovethequalityofworkintheUKeconomy.Wecannotdoitalone,andweneedeveryone–employers,individuals,unionsandothers–toworkwithustodelivertheflexibleandproductivelabourmarketweallwanttosee.

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Executive Summary

The UK Labour Market

The United Kingdom has one the most successful labour markets in the world. Generating good jobs and greater earning power for all is a foundation of the Industrial Strategy White Paper, published in November 2017.

TheUK’slabourmarketwashighlyresilientduringtherecentfinancialdownturn.Havingseenunemploymentgrowsharplyfollowingthedownturn,theeconomicrecoveryhastakenholdandthelabourmarkethascontinuedtostrengthen.Thishasbuilttoapositionwhere,in2017,theUKexperiencedrecordhighemploymentrates,arecordlowinactivityrateandthelowestunemploymentratesince19751.Whatismore,thereareover800,000jobvacancies,anumberwhichhasgenerallybeenrising,andasignthattherearemanyopportunitiesforworkavailable2.

ManycredittheflexibilityoftheUK’slabourmarketforthecurrentstrongperformanceinemployment.FlexibilityinthewaythatpeopleengagewiththelabourmarketisalsoconsideredtobeakeycomponentoftheUK’sinternationalattractiveness.In2017,theConfederationofBritishIndustryfoundthat97percentofUKbusinessesdescribetheUK’sflexibleworkforceaseithervitalorimportanttotheircompetitiveness.

Thewayinwhichpeoplechoosetoworkisalsomorevariedtodaythanithaseverbeen.Groupsthathavehistoricallybeenunder-representedinwork,such

aswomenandthosewithdisabilities,havebeenjoiningtheworkforceinlargerandlargernumbers.Addedtothis,morepeoplechoosetostayoninworklaterinlife,withmanydecidingtohaveanumberofdifferentcareersovertime.Theavailabilityofflexibleworkingarrangementsandthegrowthofthegigeconomyhavesupportedthis.

However,whileparticipationrateshavereachedrecordhighsinrecentmonths,andmorejobsarebeingcreatedthaneverbefore,noteveryoneisabletofindworkthatsuitsthem.ThereareanumberofissuesfacedbytheUKeconomythatneedtobeaddressed:

`` Productivity: ProductivitygrowthintheUKhasbeensubduedsincethe2008/09recession,withproductivitycurrentlyaround17percentlowerthanitwouldhavebeenifithadfolloweditspre-downturntrend3.

`` Wages: Realwagegrowthhasslowedsincetheeconomicdownturn,andfromearly2017wehaveexperiencednegativegrowthinrealaverageweeklyearnings4.Similarly,whilethenumberofself-employedpeoplehasincreasedoverthepastdecade,theirmedianearningshavedeclined5.

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`` Income security:Thoughflexibleworkhasbenefitsforindividualsandemployers,forsomethiscanbringadditionalpressures–suchasuncertaintyoverwherethenextpaychequeiscomingfrom.

`` Regional imbalance: Wagesandemploymentratesarenoticeablynotuniformacrossthecountry.Forinstance,theunemploymentrateintheNorthEast(5.5percent)isalmostdoublethatintheSouthEast(3.2percent)6.InApril2017,Londontoppedtheregionallistformedianearningsat£692perweek7,£142moreperweekthantheUKmedianand£194moreperweekthanthelowest-paidregion,Wales8.

`` Wider disparities: Despitetheimprovementreferencedabove,disparitiesinlabourmarketoutcomesbygender,ethnicityandagecontinue.Thefemaleparticipationrateremainslowerthanthatformales,withfemalepayalsolowerthanthatofmales.Thegenderpaygapforfull-timeemployeescurrentlystandsat9.1percent9.Therearealsodisparitiesinoutcomebyethnicity,bothintermsoftheoverallemploymentrateandearnings,withmanyethnicminoritiesworkinginlower-paidoccupationsandsectors10.ThisissetoutinmoredetailintheRaceDisparityAuditpublishedbythegovernmentin2017.Olderpeople(thoseaged50+)anddisabledpeoplearealsolesslikelytobeinwork.

Review of Modern Working Practices

Recentincreasesinthenumberofpeopleparticipatinginatypicalformsofworkhavegivenrisetowiderquestionsaroundemploymentstatusandtheprotectionspeopleshouldhave.Advancesintechnology,theriseofthe‘gigeconomy’andapredictedgrowthinautomationmayalsoleadtochangesindemandwithinthelabourmarket.Wemustensurethatthelabourmarketisresilientenoughtonotonlyrespondtothesechanges,butalsotobuildonthemandaddresssomeoftheissuesoutlinedabove.Inthiscontext,thePrimeMinisteraskedMatthewTaylortoexaminemodernworkingpracticesandconsiderwhetherchangeswererequiredtoensurethelabour

marketwaswellequippedtofacethechallengesofthefuture.Thereviewpanelwasaskedtoexaminesixthemes:

`` Security, pay and rights:Towhatextentdoemergingbusinesspracticesputpressureonthetrade-offbetweenflexiblelabourandbenefitssuchashigherpayorgreaterworkavailability,sothatworkersloseoutonalldimensions?Towhatextentdoesthegrowthinnon-standardformsofemploymentunderminethereachofpoliciesliketheNationalLivingWage,maternityandpaternityrights,pensionsauto-enrolment,sickpay,andholidaypay?

`` Progression and training:Howcanwefacilitateandencourageprofessionaldevelopmentwithinthemoderneconomytothebenefitofbothemployersandemployees?

`` The balance of rights and responsibilities:Docurrentdefinitionsofemploymentstatusneedtobeupdatedtoreflectnewformsofworkingcreatedbyemergingbusinessmodels,suchason-demandplatforms?

`` Representation:Couldwelearnlessonsfromalternativeformsofrepresentationaroundtheworld?

`` Opportunities for under-represented groups: Howcanweharnessmodernemploymenttocreateopportunitiesforgroupscurrentlyunderrepresentedinthelabourmarket(theelderly,disabledpeopleorpeoplewithcaringresponsibilities)?

`` New business models: Howcanthegovernment–nationallyorlocally–supportadiverseecologyofbusinessmodelsenhancingthechoicesavailabletoinvestors,consumersandworkers?

Thiswasawide-ranging,trulynationalreviewconsideringmanyoftheissuesfacedbyworkingpeopleandbusinessesacrosstheUK.MatthewTaylortravelledacrosstheUKconvening‘TownHall’publicmeetingswherethepanelheardevidencefrombusinesses,tradeunions,thinktanks,tradebodies,academicsandworkersthemselves.Over100writtensubmissionswerealsosenttothereviewteamandanonlinepublicdiscussionforumwaslaunched,resultinginhundredsofpeoplebeingabletocontributetheirviewsandengagewiththeissues.

Seven point plan

Thefinalreport,publishedinJuly2017,acknowledgedthestrongperformanceoftheUKlabourmarket.Giventhispositionofstrength,thereviewpanelsetoutacompellingcasethatnowwasthetimetoplacequalityofworkonanequalfootingwithquantityofworkwhenmeasuringsuccess.TheoverarchingambitionwasthatallworkintheUKeconomyshouldbefairanddecentwithrealisticscopefordevelopmentandfulfilment.Toachievethisambition,thereportsetsoutsevensteps:

`` Good work for all:Ournationalstrategyforwork–theBritishway–shouldbeexplicitlydirectedtowardsthegoalofgoodworkforall,recognisingthatgoodworkandplentifulworkcanandshouldgotogether.Goodworkissomethingforwhichthegovernmentneedstobeheldaccountablebutforwhichweallneedtotakeresponsibility.

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`` Clarity in the gig economy:Platform-basedworkingofferswelcomeopportunitiesforgenuinetwo-wayflexibilityandcanprovideopportunitiesforthosewhomaynotbeabletoworkinmoreconventionalways.Theseshouldbeprotectedwhileensuringfairnessforthosewhoworkthroughtheseplatformsandthosewhocompetewiththem.Worker(or‘dependentcontractor’asthereviewsuggestedrenamingit)statusshouldbemaintainedbutweshouldmakeiteasierforindividualsandbusinessestodistinguishworkersfromthosewhoarelegitimatelyself-employed.

`` Fairer flexibility: Thelawandthewayitispromulgatedandenforcedshouldhelpfirmsmaketherightchoicesandindividualstoknowandexercisetheirrights.Althoughtherearesomethingsthatcanbedonetoimproveworkingpracticesforemployees,the‘employmentwedge’(theadditional,largelynon-wagecostsassociatedwithtakingsomeoneonasanemployee)isalreadyhighandweshouldavoidincreasingitfurther.‘Dependentcontractors’arethegroupmostlikelytosufferfromunfairone-sidedflexibilityandthereforeweneedtoprovideadditionalprotectionsforthisgroupandstrongerincentivesforfirmstotreatthemfairly.

`` Good management: Thebestwaytoachievebetterworkisnotnationalregulationbutresponsiblecorporategovernance,goodmanagementandstrongemploymentrelations

withintheorganisation,whichiswhyitisimportantthatcompaniesareseentotakegoodworkseriouslyandareopenabouttheirpracticesandthatallworkersareabletobeengagedandheard.

`` The ability to progress:Itisvitaltoindividualsandthehealthofoureconomythateveryonefeelstheyhaverealisticallyattainablewaystostrengthentheirfutureworkprospectsandthattheycan,fromthebeginningtotheendoftheirworkinglife,recordandenhancethecapabilitiesdevelopedinformalandinformallearningandinon-the-jobandoff-the-jobactivities.

`` A healthy workplace:Theshapeandcontentofworkandindividualhealthandwell-beingarestronglyrelated.Forthebenefitoffirms,workersandthepublicinterestweneedtodevelopamoreproactiveapproachtoworkplacehealth.

`` Sectoral approaches:TheNationalLivingWageisapowerfultooltoraisethefinancialbaselineoflow-paidworkers.Itneedstobeaccompaniedbysectoralstrategiesengagingemployers,employeesandstakeholderstoensurethatpeople–particularlyinlow-paidsectors–arenotstuckatthelivingwageminimumorfacinginsecuritybutcanprogressintheircurrentandfuturework.

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Government response

Good workThe government made clear at the launch of The Review of Modern Working Practices that we accept the overarching ambition that all work in the UK economy should be fair and decent with realistic scope of development and fulfilment.Thecasethatgoodworkcanleadtogreaterperformanceandthereforeincreasedproductivityisstrongandsowewilltakethenecessarystepstoachievethis.The UK’s Industrial Strategy vision includes ‘good work and greater earning power for all’.ThatiswhywemadeclearintheIndustrialStrategythattheBusinessSecretaryhasacceptedresponsibilityforgoodworkandwillnowleadeffortsingovernment,workingwithbusinessandthedevolvedadministrations,topromotegoodworkacrosstheUK.

TheReviewofModernWorkingPracticesalsoidentifiedtheimportanceofagreeingasetofmeasuresagainstwhichthequalityofworkcouldbeevaluated.The government agrees and, in November, started this discussion in the Industrial Strategy. We set out the five principles that we believe underpin the quality of work.Theseprinciplesare:

``Overallworkersatisfaction;

``Goodpay;

``Participationandprogression;

``Wellbeing,safetyandsecurity;and

``Voiceandautonomy.

WehaveidentifiedtheseprinciplesindiscussionwithexpertsincludingtheCharteredInstituteforPersonnelandDevelopment(CIPD),theOfficeforNationalStatistics(ONS),theRecruitmentandEmploymentConfederation(REC),theConfederationofBritishIndustry(CBI)andtheTradesUnionCongress(TUC).WewillcontinuetoworkwiththesebodiesandotherstoagreethebestmeasurestoevaluatethelevelofgoodworkintheUKeconomy.WewillusethesemeasurestoreportannuallyonthequalityofworkintheUKeconomy,andtoholdourselvestoaccount.

Wewillalsousethesediscussionstoaddressthereview’srecommendationstoensurethelabourmarketremainssuccessfulinthefuture,adaptingmoredynamicallytochangingpractices.BEISwillworkwithexperts,businessgroups,tradeunions,employers,employeesandstakeholderstoimprovethequalityofworkacrossallregionsandsectors.Thiswillincludepromotingcurrentbestpracticeandencouraginggreatercollaborationwithinandacrosssectorsandworkingthrough‘SectorDeals’,undertheIndustrialStrategy,topromoteandincreasegoodwork.

Inadditiontodevelopingmeasuresonthequalityofwork,thegovernmentwillalsosetout,annually,whatitbelievesneedstobedonetopromotegoodwork,drawingontheadviceofthe

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DirectorofLabourMarketEnforcement,inputfromtheworkwithexpertsandotherssetoutaboveand,ifnecessary,furtherformalconsultation.ThegovernmentalsoseesarolefortheIndustrialStrategyCouncilinprovidingadviceonmeasuringthequalityofwork,givenitsimportancetotheambitionsoftheIndustrialStrategy.

Informed choices: clarity in the law and transparency of entitlement ThechangesproposedinthereviewrelatingtoemploymentstatuswouldrepresentthesinglelargestshiftinemploymentstatussincetheEmploymentRightsActin1996.Asthereviewsaid,theywillrequirefurtherconsultationandexaminationiftheyaretobesuccessful.Thegovernmentagreesthatit should be

easier for individuals and businesses to determine whether someone is an employee, a worker, or self-employed, and is committed to improving clarity and certainty in this area.Thiswillincludeconsiderationoflegislativeoptions.Weneedtoensurethatanyreformsachievetheiraim,andwouldnothaveunintendedconsequences–suchasdamaginggenuineflexibilityorcreatingopportunitiesforlessscrupulousemployerstogamethesystemandgainanunfaircompetitiveadvantage.

Thegovernmentwillthereforeconsulttoexplorethebestwaytoimproveclarityforthoseontheboundarybetweenemploymentandself-employment,includingoptionsforlegislativereform.Thiswillhelpensurethatfewer‘workers’find‘themselvesfightingforprotectionsthattheyshould

alreadyhave.Itshouldbecleartoapersonwhetherheorsheisemployed–withrightstotimeoffforsicknessandentitlementtosickpay,holidaypayandotherrights–orwhetherheorsheisacontractorinwhichcaseonerouscontractualtermsthatanindividualcouldnotmeet,suchasprotectionforsickness,shouldnotbeenforceable.Theconsultationwillconsideremploymentstatusforbothemploymentrightsandtax,includingconsideringthereview’srecommendationforgreateralignmentbetweenthetwo,inordertotacklethisissueholistically.

AgencyworkersintheUKplayavitalroleinsupportingdeliveryinanumberofsectorsandmanypeoplechoosethishighlyflexibleapproachtowork.However,thegovernmentacknowledgesthatsomeagencyworkerscanfindthemselvesinpositionsofvulnerabilityandsoitisimportantthattheyreceiveenhancedprotections.ThroughtheAgencyWorkersRegulationsandtheEmploymentAgenciesAct1973,agencyworkersalreadyreceivegreaterprotectionsthanmanyothercasualworkers,withsomeprotectionsenforcedbythestatethroughtheEmploymentAgencyStandardsInspectorate(EAS).However,itisclearthatchangesinthelabourmarkethaveputpressureonthecurrentframeworkofprotections.

Thegovernmentwantstoensurethatrulesthatprotectagencyworkersreflectthechallengesofthemodernlabourmarketandwillconsultonhowbesttoachieve

this.Thisresponsewilltherefore:

`` Set out plans for legislation to improve transparency for agency workersoverhowandwhattheywillbepaidwhentakingupassignments;

`` Seek detailed evidence to determine the extent of abuseof the ‘Swedish Derogation’thatallowswork-seekerstooptoutofequalpayentitlements,settingoutoptionsforrepealingthederogationorimprovingenforcement;and

`` Set out plans to extend the scope and remit of the Employment Agency Standards Inspectorate toumbrellacompaniesandintermediaries,andtheenforcementoftheAgencyWorkersRegulations,subjecttotheviewsoftheDirectorofLabourMarketEnforcement.

Itisessentialthatallthoseinworkknowwhatrightsandprotectionstheyhave.Thisshouldbesimpletounderstandandeasilyaccessible.Thereisalreadyasignificantamountoflegislationinthisspaceandmanyemployersgobeyondthistoensurethattheirworkforceshavetheguidanceandsupporttoclaimtheirentitlements.

The government agrees that more can be done to provide greater transparency for those people who work in more casual relationships. Thisresponsewilltherefore:

`` Presentplansforlegislationandseekviewsonthedetailsofhowtoensure all workers receive important information, in a clear format and from day one,ontheirworkingrelationship;

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`` Set out the government’s plan to provide workers with a right to request a contract with more predictable and secure working conditions, and explore the most effective approach to doing so;

`` Set out proposals to increase the holiday pay reference period to 52 weeks,tohelpensureatypicalworkersreceivetheholidaypaytheyareentitledto;

`` Set out proposals to make it easier for people in atypical work to establish ‘continuity of service’,whichgivesaccesstokeyemploymentrights,byextendingthequalifying‘breakinservice’period,andconsiderswhetherthecriteriaapplyingtothisneedtobeamended;

`` Seek views on the best way to define working timesothatthoseinthegigeconomywhoareworkerscanbeclearabouthowtheminimumwageapplies;and

`` Considerthepotentialbenefitsofmaking it easier for workers to trigger formal consultation processes with their employer.

A fair dealAflexiblelabourmarketworksforemployersandindividuals,encouragingjobcreationandallowingmorepeopletoparticipateinwork.However,itisimportantthatthebalancebetweenflexibilityandsecurityisfairforbothparties.Goodemployersknowtheimportanceofanengagedworkforceandincludetheminthedecision-makingprocesssothateveryonecanshareinsuccess.

The government recognises the real issues that one-sided flexibility can cause for working people and their families. Wewanttofindwaystotacklethisissuewhileretainingtheflexibilitythatmanypeoplefindsovaluable,andavoidplacingunnecessaryburdensonbusiness.Weacceptthereview’srecommendationtoasktheLowPayCommission(LPC)toexploretheimpactsofintroducingahigherNMW/NLWrateforhoursthatarenotguaranteedaspartofthecontract.Wewillalsoinvestigatealternativemeansoftacklingtheissue,andasktheLPCtodothesameandprovideadviceontheimpactsofalternativeoptions.

Inaddition,wearecommittingtoprovide a right to request a more predictable contract for all workers,includingthoseonzerohourscontractsandagencyworkers.

Itisalsoimportantthatpeoplefeelinvolvedintheirwork.Formany,theabilitytoshapetheirworkandinfluencethedecisionsthataffectthemisakeypillarofwhattheywouldconsidergoodwork.Manycompaniesactivelyinvolvetheirstaffinbusinessdecisions,recognisingthepositiveimpactthatanengagedworkforcecanhaveonmoraleandproductivity.Tosupportthis,thegovernmentwillengagewithbusiness,unionsandotherstoestablishthebestwaytoenhanceemployeeengagement,includingconsultingonchangestotheInformationandConsultationRegulations.The government will also support the development of a workertech catalyst to encourage greater collective voice amongst the self-employed.

Whenaworker’srightsarebreachedtheydeservequickandeffectiveredress.Mostpeoplewillgothroughtheirworkingliveswithnoreasontochallengetheiremployer’sactions.However,whenthingsdogowrongoremployersdonotcomplywithemploymentlaw,thegovernmentbelievesthatredressshouldbequickandeffective.

Thetwo-tierapproachtoenforcementintheUKworks.Thosewhoaremostopentoexploitationandabuseseebasicrightsenforcedbythestate,whereasothersareabletobringtheircasestoanemploymenttribunalviaAcasandthefreeprocessofearlyconciliation.However,withthemajorityofprotectionsenforcedthroughthecourts,itisessentialthatthisprocessisfairanddeliversjustice.Forthesystemtowork,thosewhodowrongmustbeadequatelypunished.Therefore,thisresponsewill:

`` Setoutthe government’s intention to enforce a wider range of basic employment rights on behalf of the most vulnerable workers.Aconsultationwillseekevidenceonwherelow-paidworkersstruggletoaccesssickpayandholidaypaytohelptargettheseenforcementefforts;

`` Setoutthe government’s plans to simplify the enforcement process for employment tribunal awards;

`` Outline the government’s intention to introduce a naming scheme for unpaid employment tribunal awards;and

`` Takeforwardthereview’srecommendationsthatemploymenttribunaljudgesshouldbeobliged to consider stronger punishments for employers who ignore previous tribunal judgmentsandseekviewsonhowbesttoimplementthis.

Inaddition,thegovernmentwillintroducenewguidanceandincreasetargetedenforcementactivitytohelpstampoutillegalandexploitativeunpaidinternships.

Security of opportunity Progressionisakeyelementofgoodwork,andthegovernmenthasaroletoplayinhelpingpeopletoprogresswithinthelabourmarket.Aspeopleworkforlongerandtechnologychangestheskillsrequiredinwork,itisvitalthatpeopleareabletocontinuelearningthroughouttheirworkinglives.

Peoplealsorequiresupportinwork,sometimestoremaininthelabourmarketthroughperiodsofillhealth.Timeoutofthelabourmarketduetoillhealthsignificantlyimpactsonanindividual’sabilitytoprogresslaterintheircareersandsomoreshouldbedonetosupportworkersthroughthesetimes.

Likewise,thedemographicoftheself-employedischangingandmanyrequireadditionalsupportoradviceonissuessuchaspayingtherighttaxorsavingforthefuture.Thereisaroleforthegovernmentinallofthoseareas.

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Inordertoachievethis,weare:

`` Ensuringthequalityofapprenticeshipsbymakingsuretheyarereal,paidjobsandincludesustainedtrainingandclearskillsgain;

`` SupportingthelearningofworkingadultsthroughtheFlexibleWorkingFund,thefirstpilottestingnewapproachestocareerlearning;

`` Developingaunifiedframeworkofemployabilityskills,whichwillberefinedandtestedbyarangeofbodiesandmadeopenlyavailabletootherorganisationssuchasemployersandschools;

`` Performingdeeperanalysisandresearchintomakingstatutorysickpayabasicemploymentright;and

`` Workingacrossgovernmenttounderstandhowwecansupportself-employedpeople,includingconsultingontax-registrationchecksandstartingaseriesoftargetedinterventionstoidentifyhowauto-enrolmentcanbestworkforthem.

Next steps

The review had a wide remit and so many of the recommendations impact on policies that are devolved.

Giventhis,aswelooktotakethisworkforward,wewillworkcloselywiththedevolvedadministrationstoensureajoined-upapproachtosupportinggoodwork.Wearecommittedtoaction;manyoftheplansandproposalsoutlinedinthisresponserequirefurtherconsultationeitheronthesubstanceorthedetailofimplementation,andwewelcomediscussionandinputaswedevelopourpoliciesfurther.Wewillengagewithbusiness,unionsandotherexpertstodevelopnextsteps.

SinceTheReviewofModernWorkingPracticeswaspublished,boththeWorkandPensionsandBusiness,EnergyandIndustrialStrategySelectCommitteeshavetakenevidenceonthefutureworldofwork.Theirjointreport,Aframeworkformodernemployment11,waspublishedinNovemberandrecommendsanumberofstepssupportingtheapproachsetoutinTheReviewofModernWorkingPractices.Indevelopingourapproach,thegovernmenthascarefullyconsideredthejointreportfromtheCommitteesandhastakenthatintoaccountinthisresponse.AsummaryofnextstepsisincludedatAnnexB.

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Good workGood work

The Review of Modern Working Practices sets out a vision of all work in the UK economy being fair and decent with realistic scope for development and fulfilment.

Thisisthereviewpanel’svisionof‘goodwork’andonethatthegovernmentsharesandiscentraltotheUK’sIndustrialStrategy.

Toimprovethequalityofworkitisimportantthatweagreewhat‘goodwork’is.WestartedthatprocessintheIndustrialStrategy,embeddingchangewhichtakesadvantageoftheopportunitiesthattechnologicaladvancespresent.


`` Acceptingtheprinciplethatqualityandquantityofworkshouldhaveequalprominenceinpolicymaking,withtheBusinessSecretarytakingresponsibilityforleadingthiswork;

`` Settingouttheprinciplesagainstwhichwewillassessthequalityofworkwithaviewtogainingconsensusontheunderpinningmeasuresthatwecanevaluatesuccessagainst.

Thegovernmentrecognisestheimportanceofthequalityofwork,bothintermsofthepositiveimpactithasontheindividualandthepotentialimprovementsforbusiness,andintermsofproductivitythatgood,fulfillingworkcangenerate.TheReviewofModernWorkingPracticesrecommendedthatthe government must place equal importance on the quality of work as it does on the quantity, by making the Secretary of State for Business, Energy and Industrial Strategy responsible for the quality of work in the British economy(46).Thegovernmentagreesthatequalimportanceshouldbeplacedonthequalityandquantityofwork.TheUK’sIndustrial

Strategyvisionincludes‘goodwork,andgreaterearningpowerforall’.ThatiswhywemadeclearintheIndustrialStrategythattheBusinessSecretaryacceptsresponsibilityfor‘goodwork’andwillleadworkingovernment,andwithbusiness,topromotethedeliveryofbetterjobs.

TheReviewofModernWorkingPracticesrecommendedthatthe government should identify a set of measures against which it will evaluate success, reporting annually on the quality of work on offer in the UK(47).Weacceptthisrecommendationandhaveidentifiedanumberofbroadprinciples,initiallylistedintheIndustrialStrategy,whichwebelieveareimportantindelivering‘goodwork’.

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Establishing measures

Individualsbalancedifferentcharacteristicsandjob-relatedfactorswhenmakingdecisionsaboutwhetherworkisgood.Assuch,itisessentialthatwhileidentifyinghigh-levelprinciples,weacceptthattheweightingdifferentpeoplegivetoeachmaydiffer.Frominitialdiscussionswithexpertsweproposehighlevelprinciplesthatcover:

`` Satisfaction:Understandinghowsatisfiedsomeoneisinworkisagoodstartingpointformeasuring‘goodwork’.Jobsatisfactionmeasuresarealreadywidelyavailablefromnationalandinternationalsources.Wearepublishingresearchthatwascommissionedtolookatthoseworkingspecificallyinthegigeconomy.

`` Fair pay:Manypeoplejudgethequalityoftheirworkintermsoftheirearnings.Itisessentialthatweconsiderpaymeasuresthatcapturehowpeoplevaluetheirearnings,includingperceptionsoffairnessrelativetotheirpeers,alongsidemoreabsolutemeasures,bothofwhichwillvarydependingonindividualcircumstances.

`` Participation and progression:Ensuringpeopleareabletoparticipateinthelabourmarketiskey.Theavailabilityofflexiblewaysofworking,andfosteringaninclusiveworkplaceculture,helpsmanytoworkwhowouldotherwisenotbeableto.Theabilitytoprogress,

eitherinyourroleorintoalternativework,isalsodependentonskillsandopportunity.Wewillneedtoestablishthecorrectmeasurestoevaluatethisprincipleeffectively.

`` Wellbeing, safety and security: Thisprincipleencompassesbothphysicalandmentalwellbeing,howeverwellbeingatworknotonlyreferstoanindividual’smentalhealthorsatisfactionatwork.Italsorelatestohowsupportiveandinclusiveanorganisationis,helpingtoretainandsupportemployeesinwork,includingdisabledpeopleandpeoplewithlongtermconditions,andhowemployeescanhaveopportunitiestodevelophealthierlifestylebehaviours.

`` Voice and autonomy: Theabilityforindividualstohaveasayintheworkthattheycarryoutisconsideredimportantbymany.Bydevelopingabroaderunderstandingoftheworkplace,employeeswillbeabletocontributetoimprovementanddecision-making,whichcanmakepeoplefeelbetterabouttheirwork.Alignedwiththevoicethatindividualsfeeltheyhavewithintheirorganisationisthelevelofcontrolthattheyhaveovertheactualtaskstheycarryoutintheworkplace.Wewanttounderstandmoreaboutthebestmeasurestoevaluatethisprinciple.

Overthecomingmonthswewillopenupadialoguewithbusiness,unionsandotherexpertstodiscusswhichmeasuresbestevaluatetheseprinciples.ThistimescalealignswiththeworkcurrentlybeingundertakenbytheCarnegieTrustinidentifyingmeasurestoevaluatethequalityofwork.Followingthesediscussionswewillpublish,byautumn2018,afinallistofmeasuresoutliningourbaselineassessmentofthequalityofworkcurrentlyintheUKeconomy.

Aspartofthisprocess,itisessentialtounderstandwhatprogressionmeanstodifferentpeopleandhowthiscanbefacilitatedacrossregions,sectorsanddifferentgroups.Thereviewrecommendedthatthe government should seek to develop a better understanding of what progression at work is and the public policy levers which influence it.

Building on the trials to date, the government should work with external providers to determine what really works in supporting individuals to obtain better quality – and not just more – work. This should not be limited to increasing earnings to a level of self-sufficiency in Universal Credit and should take particular account of the effect of increases in the National Living Wage. It should reflect the opportunities offered by atypical and gig working (45).Weagreeandwehavecommittedtoandfundedfurthertestsandtrialsonin-workprogression,buildingonthefindingsfromthecurrentRandomisedControlTrialoverthecomingyears.

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Forward look

Itisimportantthatweequipourselveswiththeinformationweneedtokeepthelabourmarketflexibleenoughtoadapttothechallengesoftomorrow.ThatisoneofthemainreasonswecommissionedTheReviewofModernWorkingPractices.However,dealingwiththeissuesfacedintoday’slabourmarketisonlythefirststep.Itisimportantthatwecontinuetomonitorchangesinworkingpracticestodeterminewhetheradditionalchangesarerequired.TheReviewofModernWorkingPracticesrecommendedthatthe Department for Business, Energy and Industrial Strategy should take the lead for the government in identifying emerging issues and be

the custodian for ensuring market conditions allow for the creation of quality work(48).Weagreeandaspartoftheprocessofestablishingwhatgoodworkis,wewillexaminethebestwaystofacilitatetherightenvironmentinwhichthoseaspectscanflourish.

ThereviewalsoacknowledgedtheimportantrolethattheIndustrialStrategycouldhavepromotingqualitywork.Thereviewrecommendedthatthe emphasis in the Industrial Strategy and Sector Deals on technology and innovation should be linked to the importance of human factors in driving productivity and enabling more rewarding working lives (49).

Weagree.TheIndustrialStrategyseekstocreatetheopportunityforpeopletopursuehigherearningsthroughprogressionandbetterinformationontheircareeroptions.Aswelivelonger,asourworkingpatternschange,andasnew,disruptivesectorsandincreasinglevelsofautomationseenewjobscreatedandotherslostorchangedforever,ourIndustrialStrategywillhelpemployersadjustandgraspopportunitiestodriveproductivityandeconomicgrowth.WeemphasisedthiscommitmentintheIndustrialStrategybysettingouttheimportanceofSectorDealsasanearlyopportunitytopromotegoodworktoboostproductivity.Thisgivesemployerstheopportunitytoshowhowtheyaremakingchanges,investingintheirworkforceandhelpingtodelivergreaterproductivityreturns.

Asectoralapproachcanbeaneffectivewayofdealingwithspecificissues;forexample,therecentlypublishedLifeSciencesSectorDealoutlinesajointcommitmenttoensureahighly-skilledfutureworkforce.Thedealoutlinesanumberofactionstogrowapprenticeshipsinthesector:buildingontheexistingindustry-ledworktocreateapprenticeshipstandardsintheinnovativefieldsofdatasciencesuchasbioinformaticsandclinicaldataanalytics.ThegovernmentwillworkwiththeInstituteforApprenticeshipstoprioritisefurtherstandardsfordevelopment.Thegovernmentwillalsoworkwithemployerstomonitorapprenticeshipstarts.Measuressuchasthesewillensurethatthesectorhas

accesstotheskillsandqualificationsneedednow,andinthefuture,todriveinnovationandproductivity.

Toassistthegovernment,thereviewmadeanumberofrecommendationstoensurewereceivedtheadviceweneeded.SpecificallythereviewrecommendedthattheLowPayCommission(LPC)tookawiderrole.ThisincludedtheLPC:

`` having its remit widened so that it can both make recommendations to the government on what needs to change (including NMW rates) to improve quality of work in the UK, as well as work with employers, employees and stakeholders to promote quality work across all regions and sectors (50);

`` working with experts, from the new Director of Labour Market Enforcement to the Chartered Institute of Personnel and Development, as well as business groups and trade unions; and make recommendations to the government if changes to the legal framework are needed to ensure fair and decent work is delivered (51);

`` working with employers and worker representatives to ensure sector-specific codes of practice and guidance are developed that support the provision of quality work (52); and promoting what works in sectors, and encouraging greater collaboration to improve quality work in low-paying areas (53).

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Weagreethatitisimportantforthegovernmenttoreceiveinputandadviceonwhatneedstochangetosupportqualitywork.Wealsobelievethatthereisaroleforthegovernmenttoactivelypromoteandsupportqualityworkacrosstheeconomy.However,wedonotbelievethatitisappropriatetogivetheLPCallofthefunctionswhichthereviewrecommends.TheLPCperformsitscurrentspecialisedroleveryeffectively,andwewouldbeconcernedthatthewiderangeofextrafunctionscoulddetractordistractfromthat.

Instead,BEISandotherdepartments’sectorteamsandthecentralLabourMarketDirectoratewillworkwithexperts,businessgroups,tradeunions,employers,employeesandotherstakeholderstoimprovequalityofworkacrossallregionsandsectors.Thiswillincludepromotingwhatworksandencouraginggreatercollaborationwithinandbetweensectors.Itwillalsoincludeworkingthrough‘SectorDeals’,undertheIndustrialStrategy,topromotegoodwork.

Inadditiontostatisticsonthequalityofwork,thegovernmentwillalsosetoutannuallywhatitbelievesneedstobedonetopromotegoodwork,drawingontheadviceoftheDirectorofLabourMarketEnforcement,inputfromtheworkwithexpertsandothersdescribedabove,andifnecessaryfurtherformalconsultation.ThegovernmentwillworkwiththeDirectortodeterminethemostcoherentsequencingofthevariousrelatedconsultationsandreports,withtheaimofestablishingaclearannualrhythmofconsultation,reportingandstrategicdirectioncoveringallaspectsofgoodwork.

GiventheimportanceofthequalityofworktotheIndustrialStrategy,thegovernmentalsoexpectsthattheIndustrialStrategyCouncilwillinfutureprovideadvicetothegovernmentonmeasuringandimprovingthequalityofwork.

Next steps

Wearetodaystartingadialogue,engagingwithexpertstoestablishthemostappropriatemeasuresagainstwhichtoevaluate‘goodwork’.OrganisationsliketheCharteredInstituteforPersonnelandDevelopment(CIPD)andtheCarnegieTrustarealreadyprogressingworkinthisspace,andwewillcontinuetoengagewiththemtoensureourapproachaligns.

Ifyourorganisationwouldliketoparticipateinthisdiscussion,wearekeentohearfromyou.

[email protected]

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Informed choices

Informed choices

In order for people and employers to make the choices that are right for them, clarity and transparency are essential.

ThelegalframeworkthatweusetodetermineeligibilityforemploymentprotectionsintheUKisdesignedtobeflexible.However,weknowthatforsomeemployersandindividuals,thiscanleadtoambiguityanduncertainty.

Wealsoknowhowimportantitisforindividualstohaveaccesstothebasicprotectionsweexpectthemtohave.Wewanteveryonetobeabletohaveeasyaccesstoinformationabouttheirworkingarrangementsandwhatrightstheyshouldhave,fromholidaypaytotheminimumwage.


`` Publishingaconsultationtoconsiderinmoredetailthereview’srecommendationsonhowtoincreaseclarityinthelaw;

`` Seekingviewsonhowbesttoavoidsituationsofbogusself-employment;

`` Consultingonthereview’srecommendationforgreateralignmentbetweendefinitionsinemploymentlawandtax,inordertotacklethisissueholistically;

`` Extendingtherighttowrittenparticularstoallworkersfromdayone;

`` Changingthelawtoimprovepaytransparencyforagencyworkersandextendingtherighttoanitemisedpaysliptoallworkers;

`` Makingiteasierforpeopletocalculatehowmuchholidaypaytheyareentitledto,andhelpingseasonalworkersgettheholidaypaytheyareentitledtobyincreasingthepayreferenceperiod;

`` Seekingtoaddressthechallengeofdefiningwhatconstitutesworkingtimeforthoseworkinginthegigeconomywhoareentitledtominimumwage;and

`` Furtherclarifyingguidanceonmaternityandpregnancyrightsatworkforindividualsandemployers.

Employersandindividualsneedtoknowwhattheirrightsandresponsibilitiesareatwork.Thisrequiresthelawtobeclearandforbasicinformationtobeprovided.

TheReviewofModernWorkingPracticesmadeanumberofrecommendationsdesignedtoimprovethesituationwhicharesetouthere.

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Clarity in the law

The way in which employment protections are assigned in the UK, and the type of taxes that individuals and the business they work for must pay, are based upon an individual’s employment status.

Thisisahigh-level,principle-basedapproachinlegislationthatallowsmaximumflexibilityforthecourtsandenforcementbodies.Thisapproachhasallowedthecurrentteststoadapttochangesinthewaypeoplework.Ultimately,themajorityofpeoplewhoareengagedinworkbenefitfromtheprotectionsthatParliamentexpectsthemtohaveandpaythetaxestheyowe.

However,thereviewfoundthat,particularlyforthoseinatypicalwork,thecurrentframeworkcanoftenfailtoprovidetheclarityandcertaintythatindividualsandbusinessesneed.Concernswereraisedabouttheheavyrelianceonthecourts,andcaselawinparticular,indeterminingemploymentstatuswithasuggestionthatthesystemcouldbeimprovedifthelegislationdidmore,andthecourtsless.

Thereviewmakesanumberofrecommendationstoimprovetheframework,includingthat:

`` The government should replace their minimalistic approach to legislation with a clearer outline of the tests for employment status, setting out the key principles in primary legislation, and using secondary legislation and guidance to provide more detail(1);

`` The government should retain the current three-tier approach to employment status as it remains relevant in the modern labour market, but rename as ‘dependent contractors’ the category of people who are eligible for worker rights but are not employees (2);

`` In developing the test for the new ‘dependent contractor’ status, control should be of greater importance, with less emphasis placed on the requirement to perform work personally(3);

`` In developing the new ‘dependent contractor’ test, renewed effort should be made to align the employment status framework with the tax status framework to ensure that differences between the two systems are reduced to an absolute minimum(5).

SimilarrecommendationsweremadebytheWorkandPensionsandBusiness,EnergyandIndustrialStrategyCommitteeintheirrecentreport.Thegovernmentwelcomesthereview’sfindingthatformostpeoplethecurrentemploymentstatusframeworkworkswell,andacceptsthatforsomeitdoesnotprovidethecertaintyandclaritythattheyneed.

Thegovernmentwantstoensurethateveryoneknowswhatrightstheyhaveandwhattaxestheypayaswellasmakeclearerforemployerswhattheirresponsibilitiesare.

Thegovernmentiscommittedtotakingactioninthisareaandwearethereforeconsultingonthebestwaytoachievethis,includingseekingdetailedviewsandfurtherinputonthereview’srecommendations.

Employmentstatusisanimportantandcomplexissuethatiscentraltoboththeemploymentrightssystemandthetaxsystem,andsoanypotentialchangesneedtobeconsideredcarefully.Itisimportantthatanyactionthegovernmenttakespreservesflexibilityinourlabourmarket,doesnotimposeunnecessaryburdensonbusinesses,anddoesnotcreateanadverseimpactontheabilityofthoseintheUKlabourmarkettowork,orhowtheywork.ItisforthisreasonthatthegovernmentispublishingaconsultationauthoredjointlybyBEIS,HMTreasury,andHMRevenueandCustomsexploringtheoptionsforreformingemploymentstatusforbothemploymentrightsandtaxinordertoachievegreaterclarityandcertainty.

Aswellasbeingsureofemploymentstatus,employersandemployeesalsorequireclarityoncontinuityofemploymentwhendecidingwhethercertainprotectionsapply.

However,forsomeemployeesworkingatypically,calculatingtherequisitecontinuousemploymenttoasserttheirrightscanbecomplicated.Thereviewrecommendedthatthe government should extend, from one week to one month, the consideration of the relevant break in service for the calculation of the qualifying period for continuous service and clarify the situations where cessations of work could be justified(9).ThisrecommendationwasalsomadeintheWorkandPensionsandBusiness,EnergyandIndustrialStrategyjointselectcommitteereport.Weacceptthisrecommendation,andarecommittedtoextendingthequalifyingperiodbeyondoneweek.Wewillbeconsultingonthedetail.Wewillalsobeexploringwhetherfurtherfactorsshouldbeconsideredasexemptionsforthislegislation.Regardlessofwhetherwemakeanychangestotheexemptions,wewillprovidenewandclearerguidancetohelpclarifythelaw.

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Transparency of entitlement

The decision to accept work will depend on a range of factors based on the individual, including rates of pay, frequency of hours, who the employer is and what they are expected to do.

Formostpeople,thisinformationisprovidedupfrontalready,helpinginformthatimportantdecision.However,currentlyonlyemployeeshavearighttowrittenparticularsoftheiremploymentrelationshipafteraqualifyingperiodofamonth,withagencyworkersalsoentitledtosomebasicdetailsabouttheworktheyareaccepting.Itisalsoimportantthatindividualsandemployersknowwhattheirrightsandresponsibilitiesarethroughouttheworkingrelationship.Weagreewiththereviewthatmorecanbedonetoachievethis.

Specifically,thereviewrecommendedthatthe government should build on and improve clarity, certainty and understanding of all working people by extending the right to a written statement to ‘dependent contractors’ as well as employees(7).ThisrecommendationwasalsomadebytheWorkandPensionsandBusiness,EnergyandIndustrialStrategyjointselectcommitteereport.Thegovernmentbelievesthateveryoneinworkshouldhaveessentialinformationabouttheworkingrelationshiptheyhaveenteredinto.Wethereforeacceptthisrecommendationandwillextendtherighttowrittenparticularstoallworkers.

Weareconsultingonhowbesttoachievethisandwhatinformationthisstatementshouldinclude.

Wealsoagreethatagencyworkersshouldreceivetheinformationtheyneedtomakeinformedchoicesabouttheworktheyaccept.Thereviewrecommendedthatthe government should amend the legislation to improve the transparency of information which must be provided to agency workers both in terms of rates of pay and those responsible for paying them(11).Weagree:wewillamendthelegislationand,aspartoftheconsultationonagencyworking,wewillexamineexactlywhatchangesneedtobemadetothecurrentregulationstodeliverthisrecommendationandensureallagencyworkershavetheinformationtheydeserve.

Onceinwork,onlyemployeeshaveastatutoryentitlementtoreceiveapayslip.However,thereisnostatutoryentitlementtohavethehourstheyarebeingpaidforstatedontheirpayslips,whichcanbecrucialinformationtohelplow-paidworkersunderstandwhetherornottheyhavebeenpaidcorrectly.Following a recommendation by the Low Pay Commission in 2016, the government will extend the right to receive a payslip to all workers.

Weplantolaylegislationshortlytobothextendtherighttoreceiveapaysliptoallworkers,andtorequirethatemployersstatethehoursbeingpaidforonthepayslipsoftime-paidworkers.

TheNationalMinimumWage(NMW)andNationalLivingWage(NLW)areessentialbaselineprotectionsforallworkers,andthegovernmentremainsabsolutelycommittedtoensuringthatallthosewhoareduetheNMWreceiveit.ThereviewconsideredhowtheNMWandNLWoperateinsomepartsofthegigeconomyandrecommendedthatin redefining the ‘dependent contractor’ status, the government should adapt the piece rates legislation to ensure those working in the gig economy are still able to

enjoy maximum flexibility whilst also being able to earn the NMW (4).Werecognisethatmodernbusinessmodelsarechangingemploymentpracticesandthatinnovationswhichleadtoworkbeingofferedinsmall,discretepackagesthroughdigitalplatformscanraisequestionsabouthowtheNMWandNLWapply.ItisimportantthatthoseinthegigeconomywhoareworkersareprotectedbytheNMWandNLW,whilewepreservetheflexibilityandbenefits–forbothworkersandconsumers–thattheseplatformsoffer.Wewillthereforeconsulttogatherfurtherinformationandinputonhowdefinitionsofworkingtimecanandshouldapplytoplatformworking.

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Paidtimeoffisabasicprotectionthatallworkersshouldbe,andindeedare,entitledto.Thereviewfoundexamplesofwhereindividualsareeitherpreventedfromtakingtheirleave,feeldisempoweredtodosoorareunawareofwhattheirrightsare.Thereviewaddressedthisbyrecommendingthatthe government should do more to promote awareness of holiday pay entitlements, increasing the pay reference period to 52 weeks to take account of seasonal variations and give dependent contractors the opportunity to receive rolled-up holiday pay (10).Weagree,andwillimmediatelytakestepstoincreaseawarenessofholidaypayentitlements,includinginvestigatinghowtobestcommunicateentitlementstoallworkersandexploringpublicitycampaignoptions.Wewillalsocontinue

topromoteotherrights,includingsharedparentalleave.Wewillalsoincreasethepayreferenceperiodto52weeks,andourconsultationontransparencywillconsiderthefinerdetailsofthis.Withregardtotheissueofrolled-upholidaypay,wewillnotbetakingthisforwardatthistime.Whilstthegovernmentagreeswiththereview’sconcernsthatsomeworkersmaynotbereceivingtheholidaypaytowhichtheyareentitled,rolled-upholidaypayhasbeenfoundtobeunlawfulbytheCourtofJusticeoftheEuropeanUnion(CJEU)andthereforewewillnotbepursuingthisrecommendationdirectly.Insteadwewillexplore,throughconsultation,whatalternativeactioncouldbetakentoaddresstheseissues.

Therearetimesinallofourworkingliveswhenitisimportantthatsimple,

clearadviceisavailable.Thereviewrecommendedthe government should review, and in any event, consolidate in one place guidance on the legislation which protects those who are pregnant or on maternity leave to bring clarity to both employers and employees. In parallel with the range of non-legislative options set out above, the government should consider further options for legislative interventions. If improvements around leadership, information and advice do not drive the culture change we are seeking, the government will need to move quickly to more directive measures to prevent pregnancy and maternity discrimination. Discrimination on any grounds is unlawful and does not belong in the workplace(41).Weacceptthisrecommendationandwillcontinuetoworkwitharangeof

partnersincludingAcasandEqualityandHumanRightsCommission(EHRC)toimproveadviceandguidanceonpregnancyandmaternityissuessothatemployersaremorefullyawareoftheirobligationsandemployeesbetterunderstandtheirrights.

AcasproducedupdatedandcomprehensiveguidanceinNovember2017,availableatthefollowinglink:www.acas.org.uk/index.aspx?articleid=5271

WewillalsoupdateandconsolidatethepregnancyandmaternitydiscriminationpagesonGOV.UKbysummer2018.Further,wewillreviewthelegislationrelatingtoprotectionagainstredundancy,andkeepexistingprotectionsunderreviewasweunderstandtheimpacttherevisedguidanceandothermeasures(suchasEHRC’sWorkingForwardPledge)arehaving.

Embedding clarity and transparency

Securinggreaterclarityonemploymentstatusandtransparencyofrightsisimportantandthereviewrecommendedthatthe government should build on legislative changes to further improve clarity and understanding by providing individuals and employers with access to an online tool that determines employment status in the majority of cases (6).Weagreethatanonlinetoolcouldbeinvaluableinhelpingdeterminequestionsofemploymentstatus,andintendto

developone.Asthereviewsaid,thisiscomplexanditwillneedtofollowfinaldecisionsonthelegislativeframework.

Thechangeswearetakingforwardwillmakeiteasierforpeopletoknowtheirrightsandfeelmoreconfidentassertingthem.Thechangeswillalsomakeiteasierforemployerstocomplywiththelaw,reducingtheburdenofcomplicatedcalculationsandambiguitythatcanleadtounnecessarylitigationandcomplaints.

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A fair dealA fair deal

A flexible labour market works for employers and individuals, encouraging job creation and allowing more people to participate in work.

However,itisimportantthatthebalancebetweenflexibilityandsecurityisfairforbothparties.Goodemployersknowtheimportanceofanengagedworkforceandincludetheminthedecision-makingprocesssothateveryonecanshareinsuccess.

Whenaworker’srightsarebreachedtheydeservequickandeffectiveredress.Thestatehasaroleinprotectingthosewhoaremostvulnerableinthelabourmarket.However,withthemajorityofprotectionsenforcedthroughthecourts,itisessentialthatthisprocessisfairanddeliversjustice.


`` AskingtheLowPayCommissiontoconsiderthepotentialimpactofahigherNMW/NLWratefornon-contractedhourstorebalancetheincentivesincertaincircumstancesforflexibilitybetweenemployersandworkers;

`` Committingtoprovidearighttorequestamorepredictablecontractforallworkers,includingthoseonzerohourscontractsandagencyworkers;

`` ProposingtoexpandthescopeandremitoftheEmploymentAgencyStandardsInspectoratetobetterreflectmodernsupplychainsandemployerbehaviour;

`` Engagingwithbusiness,unionsandotherstoestablishthebestwaytoenhanceemployeeengagement,includingconsultingonchangestotheInformationandConsultationRegulations;

`` Supportingthedevelopmentofaworkertechcatalysttoencouragegreatercollectivevoiceamongsttheself-employed;

`` Promotingmorehigh-quality,paidinternships,andupdatingguidanceandincreasingtargetedenforcementtostampoutillegalandexploitativeunpaidinternships;and

`` Introducinganewnamingschemeforemployerswhofailtopaythepenaltiesissuedtothembyemploymenttribunals.

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Formostpeople,participatinginnon-standard,atypicalarrangementssuitsthemwellandlegislationalreadyexiststoprotectthemfromexploitation.However,thereareexamplesofwhereaminorityofemployershaveusedthisflexibilityunfairly,transferringbusinessriskontotheirstaffthroughthemisuseofzerohourscontracts,over-relianceoncasuallabourtoreducecostsorpushingpeopleintobogusself-employment.

Inaddition,someworkersdonotfeeltheyhaveameaningfulsayinthedecisionsthataffecttheirjobs.Furthermore,whenthingsgowrong,somefeelthattheenforcementframeworkfailstoprotectthemfromunscrupulousbosseswithtribunalfinesgoingunpaidandrulingsignored.

Thegovernmentbelievesthatpeopleshouldbetreatedfairlyatworkandshouldhavefastandeffectiveredresswhenthingsgowrong.ThissectionsetsoutwhatwewilldotoimprovethesituationforworkingpeopleintheUK.

Genuine two-way flexibility

Many employers offer flexible working arrangements to increase the pool of potential talent they can recruit from.

Formanyparents,students,olderworkersandthosewithcaringresponsibilities,permanent,full-timeworkisnotdesirableandsoaflexibleapproachencouragesthemtoparticipate.However,thismustbeapositivechoice.Whiletheremaybesituationswhereemployersneedtouseatypicalarrangements,forinstancebecauseoffluctuatingdemand,individualsshouldnotbetrappedinthistypeofworkwithnorouteout.BEISresearchfoundthoseworkinginthegigeconomyexpressedconcernsaboutlackofsecurityintermsofworkandirregularityofworkwhichgavethemconsiderableworries12.Employersthatchoosetoestablishbusinessmodelsthattransferdisproportionatelevelsofbusinessriskontotheir

workforceshouldbechallenged.

Thereviewconsideredthisissueatlengthandmadeanumberofrecommendationstotryandredressthebalance.Forinstance,aswehavealreadyidentified,akeyissueformanyisnotnecessarilytherateofpay,butmoretheuncertaintyofwhentheywillnextreceivepaidwork.Whilethemajorityofpeopleonzerohourscontractsarecontent,forsome,neverknowingwhenonewillbescheduledforworklimitstheabilitytoplaneffectivelyday-to-dayandmakelifechangingdecisionslikebuyingahouseorsavingforthefuture.Inlightofthis,thereviewconcludedthatahigherNationalMinimumWage(NMW)fornon-guaranteedhourswasthemostpromisingoption,andrecommended

thatthe government should ask the Low Pay Commission (LPC) to consider the design and impacts of the introduction of a higher NMW rate for hours that are not guaranteed as part of the contract (8).Thegovernmentrecognisestherealissuesthatone-sidedflexibilitycancauseforworkingpeopleandtheirfamilies.Wewanttofindwaystotacklethisissuewhichretaintheflexibilitythatmanypeoplefindsovaluable,andavoidplacingunnecessaryburdensonbusiness.Weacceptthereview’srecommendationtoasktheLPCtoexploretheimpactsofintroducingahigherNMWrateforhoursthatarenotguaranteedaspartofthecontract.Wewillalsoinvestigatealternativemeansoftacklingtheissue,andasktheLPCtodothesameandprovideadviceontheimpactsofalternativeoptions.TheLPCwillprovidetheirassessmentoftheimpactoftheseoptionstoMinistersintheirOctober2018report.

InaYouGovsurvey,13predictabilityofworkwasthehighestconcernwith18percentlistingitastheoneaspectofworktheywouldimprove.Thatiswhythereviewrecommendedthatthe government should introduce a right to request a direct contract of employment for agency workers who have been placed with the same hirer for 12 months, and an obligation on the hirer to consider the request in a reasonable manner (13).Inaddition,thereviewrecommendedthatthe government should act to create a right to request a contract that guarantees hours for those on

zero hour contracts who have been in post for 12 months which better reflects the hours worked(12).Zerohourcontractsareoftenassumedtobeassociatedwithlow-paidjobs.20percentofjobswithzero-hourcontractswerepaidclosetotheNMWorNLWinQuarterfourof2016,amuchgreatersharethanthe8percentofjobswithoutzero-hourcontracts14.

Thegovernmentsupportstheintentionunderlyingtheserecommendationstoprovidea‘righttorequest’toimprovepredictabilityofwork,butwebelievethisisanareawhereweshouldgofurther.BoththoseonzerohourscontractsandagencyworkersareanimportantpartoftheUK’slabourmarket,buttheyrepresentarelativelysmallproportionoftheUKworkforce.Currentstatisticsshowthatzerohourscontractsmakeup2.8percentofthetotalworkforceandthelatestLabourForceSurvey(LFS)statisticsshowadecreaseinthenumberofpeoplewhoreportbeingonazerohourscontract.TheRecruitmentandEmploymentConfederation(REC)conductssurveyswithagencieswhichsuggestthatin2014/15therewerearound1.2milliontemporaryagencyworkers,representingaround3.7percentofthetotalnumberofpeopleinemployment15.Thatiswhythegovernmentwillgofurtherandcreatearightforallworkersratherthanspecificgroupstorequestamorepredictablecontractwhereappropriate.Theconsultationontransparencywillconsiderhowbesttoeffectivelyimplementthisrighttorequest.

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Ensuringagencyworkershavechoiceinthewaythattheyworkiscrucialtodeliveringafairandflexiblelabourmarket.ThereviewidentifiesspecificissueswithenforcementoftheAgencyWorkersRegulations(AWR)andspecifically,theway‘PayBetweenAssignments’contracts(alsoknownasthe‘SwedishDerogation’)areused.Thereviewrecommendsthatthegovernment should repeal the legislation that allows agency workers to opt out of equal pay entitlements. In addition, the government should consider extending the remit of the Employment Agency Standards Inspectorate to include compliance with the Agency Workers Regulations (18).TheuseofthesetypesofcontractwasalsoraisedbytheWorkandPensionsandBusiness,EnergyandIndustrialStrategyCommitteesintheirreport.Paybetweenassignmentscontractscanbetherightoptionforthoseagencyworkerswhowanttobenefitfromgreaterpaysecuritybetweenassignments.However,theevidencepresentedinTheReviewofModernWorkingPracticesandbystakeholderssuggeststhatlessreputableagencieshavebeenusingsocalled‘SwedishDerogation’contractsinappropriately.ThiscorrelateswithsomeofthefindingsofqualitativeresearchpreviouslycommissionedbyBEISandpublishedtoday16.Whilstthecasestudiespresentedwithinthereportcannotbeconsideredrepresentativeofthewholeeconomy(inparticulartheevidencewhichcamemainlyfromwork-seekers)itsuggested

thatininstanceswherethesetypesofcontractswereused,theywererarelyrequestedbyagencyworkers.

Thegovernmentdoesnotsupportorcondonetheuseofpaybetweenassignmentscontractstocircumventequalpayentitlementsandisconcernedthatthesecontractsmaybebeingabused.Ifabuseislimited,stateenforcementmaybetheanswer–potentiallythroughextendingtheremitoftheEmploymentAgencyStandardsInspectorate’stocovertheAgencyWorkerRegulations.However,ifabuseismorewidespread,thegovernment’sinitialviewisthatitwouldbemoreappropriatetorepealthederogation.Beforetakingafinaldecisiononhowtorespond,thegovernmentwillthereforeconsultfurthertoestablishclearlytheextentofabuse.Evidencegatheredsofarsuggeststhatthelevelofabusemaybeconsiderable.Wewelcomefurtherevidence,eithersupportingthispositionortothecontrary,andwouldliketohearfromallthosewithaninterest.Wewillalsoconsider,aspartofthesameconsultation,thepotentialimpactofexpandingtheEmploymentAgencyStandardsInspectorate’sremittoincludealloftheAgencyWorkersRegulations,includingthe‘SwedishDerogation’,tofurtherprotectagencyworkersagainstone-sidedflexibility.

AneffectivecorporategovernanceframeworkisessentialifcompaniesintheUKaretoretainthetrustoftheirworkforces,investorsandthepublicatlarge.ThereformsweannouncedinAugust2017followingconsultationontheCorporateGovernanceReform

greenpaper,willstrengthenseveralaspectsofthisframeworktoensurestrongerandmorevisibleboardroomengagementwiththeworkforceandotherstakeholders.Thereviewsuggestedgoingfurtherandusingthecorporategovernanceframeworktoshinealightonworkforcemodelswithaviewtohighlightingthoseemployerswhounfairlytransferriskontotheirstaff.Thereviewrecommendedthe government should introduce new duties on employers to report (and to bring to the attention of the workforce) certain information on the workforce structure. The government should require companies beyond a certain size to: make public their model of employment and use of agency services beyond a certain threshold; report on how many requests they have received (and number agreed to) from zero hours contracts workers for fixed hours after a certain period; and report on how many requests they have received (and number agreed to) from agency workers for permanent positions with a hirer after a certain period(16).Weagreethatthereisvalueincompaniesbeingmoretransparentabouttheirworkforcestructuresandemploymentpractices.Giventhescopeforreputationaldamagetocompanieswherestandardsfallshortofconsumerexpectations,thegovernmentalsobelievesthatthesemattersareofinteresttoshareholders.

TheCompaniesActalreadyrequirescompaniestoreportonarangeofemployee-relatedissues.Quotedcompaniesarealsorequiredtoinclude

adescriptionoftheirbusinessmodelinthestrategicreportwhichformspartoftheannualreport.TherecentimplementationoftheNon-FinancialReportingDirectiveextendstheserequirementstoincludeadescriptionofcompanies’employeepoliciesandtheprincipalrisksrelatingtoemployees.Thiswillincludeatypicalworkersandzerohourcontractworkerstotheextentthattheyareemployees.

Implementationofthegovernment’scorporategovernancereformsannouncedinAugust2017willgofurther,requiringcompaniestobespecificabouthowdirectors,inpursuingtheirduties,havetakenaccountofwidermattersincludingtheinterestsofemployees,fosteringrelationshipswithsuppliers(whocouldincludeself-employedcontractors)andmaintainingareputationforhighstandardsofbusinessconduct.

Thegovernmentexpectsthat,inrespondingtothisstrongerreportingframework,largercompanieswillbemoretransparentabouttheirworkforcestructures,particularlywheretheseareanimportantaspectoftheirbusinessmodel.Totheextentthatthisinformationismaterialtothecompany’sfinancialresultsandanunderstandingofitsbusiness,weanticipatethatshareholderswillalsoexpectthisreporting.

ThegovernmentwillworkwiththeFinancialReportingCouncil,whichpublishesguidanceforcompaniesonthecontentofannualreports,toconsiderhowtheguidancecanberevisedtoencouragecompaniesto

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provideafullerexplanationoftheirworkforcemodelandpractices.

Thegovernmentwillreviewtheimpactofthesereformsoncompanyreportingpractice.Ifthereisnochange,wewilltakefurtheractionwhichcouldincludeanewrequirementoncompaniestopublisha‘PeopleReport’.Thiscouldbringtogetherarangeofexistingemployee-relatedreportingrequirementsincludinggenderpaygapanddiversitydata,alongwithadditionalspecificmetricsrelatingtoworkforcestructure.Thegovernmentismindfuloftheadditionalburdensthatthiswouldplaceonbusiness,andiscurrentlyoftheview

thatmorecomprehensivereportingundertheexistingandforthcominglegalframeworkispreferable.However,wewouldliketogatherviewsonthepotentialvalueofsuchareport,toinformanyfutureaction.

Thereviewalsorecommendsthatas part of the statutory evaluation of the Right to Request Flexible Working in 2019, the government should consider how further to promote genuine flexibility in the workplace. For example, it should consider whether temporary changes to contracts might be allowed, to accommodate flexibility needed for a particular caring requirement.

The government should work closely with organisations like Timewise and Working Families to encourage flexible working and initiatives like ‘happy to talk flexible working’ to a wider range of employers (40).Weagree.Therighttorequestflexibleworking,introducedinJune2014,wasamajorstepinmakingtheworkplacemoreaccessibleforawiderangeof

people.Itisrightthatthesuccessofthismeasureisevaluatedandaspartofthatprocessin2019,wewillconsiderhowfurthertopromotegenuineflexibilityintheworkplace.Tohelpunlockpotentialinthelabourmarket,includingamongstwomen,olderworkers,carersanddisabledpeople,thegovernmentwilllaunchajointtaskforcewithindustryonflexibleworking.

Inclusive dialogue

Many companies actively involve their staff in business decisions, recognising the positive impact that an engaged workforce can have on morale and productivity.

Formany,theabilitytoshapetheirworkandinfluencethedecisionsthataffectthemisakeypillarofwhattheywouldconsidergoodwork.Thereviewrecommendedthatthe government should work with Investors in People, Acas, trade unions and others with extensive expertise in this area to promote further the development of better employee engagement and workforce relations, especially in sectors with significant levels of low-paid or casual employment(15).Weacceptthisrecommendationandtoidentifyanddevelopthemosteffectivewaystopromotegreateremployeeengagementandworkforcerelations,ministersandofficialswillbeleadingstakeholderengagementwithexpertsinthecomingmonths.

Thiswillexaminewhatworksandwherewithaviewtodevelopingbestpracticeadviceforallemployers.

Thereviewalsorecommendedthatthe government should examine the effectiveness of the Information and Consultation of Employees (ICE) Regulations in improving employee engagement in the workplace. In particular, it should extend the regulations to include employees and workers and reduce the threshold for implementation from 10 per cent to 2 per cent of the workforce making the request (14).Therehaveonlybeenafewstudiesthathaveexaminedtheefficacyofinformationandconsultationregulations,withthemostextensive,TheWorkplaceEmploymentRelationsSurvey(WERS),beingundertakenin2011.Thefindingsatthetimesuggestedthatbothuptakeandimpacthadbeenlimitedandshowedthatthenumberofworkplaceswithanon-siteJointConsultativeCommittee(JCCS)remainedlow17.

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Further,aresearchpaper18publishedbytheDepartmentforBusiness,InnovationandSkills,whichprovidedcasestudiesofbusinesseswhohadestablishedInformationandConsultationarrangements,indicatedthattheimpactofICEhadbeenlimited.

WhilstthisgivessomeindicationoftheroletheInformationandConsultationRegulationsplayintheworkplace,werecognisethatourdataiscurrentlyoutofdate.Wearecommittedtoemployeeshavingavoiceatwork,butwanttoensurethatanyreformsweintroducewillbeimpactfulandeffective.Onthatbasis,weintendtoconsultfurtheronthisrecommendationtobetterdetermineanup-to-dateevidencebaseandtosupportourassessmentastowhether

ornottherewouldbeappetiteforexpansion.Thiswillformpartofthewiderconsultationontransparency.MinistersandofficialswillalsoengagewithinterestedpartiestoconsiderthefutureoftheICERegulations,includingwhetherthresholdsshouldbeloweredtoimproveworkplacerepresentation.

Thebenefitsassociatedwithacollectivevoicehavehistoricallybeencentredonemployedpeopleinlargerworkforces,andindeedthemajorityofthelegislationistargetedinthisway.However,thesignificantincreasesinthenumberofself-employedpeoplenowworkingintheUKsuggestitistimethatwerethinkthisfocus.Manyoftheseindividualsworkremotelyandrelyonathirdpartytointeractwiththeirclients,whetherthisbeanemployment

businessordigitalplatform.Workertechcansupporttheself-employedinthisspace.WokerTechcoversawiderangeoftech-enabledinnovationsthatsupportworkingindividualstoachievearangeofaims.Thiscanincludethefacilitatingofinformationsharing,bringingworkerstogetherandcalculatingandaccessingbenefits.

Thereviewrecommendedthatthe government should work with partners to create a Catalyst to stimulate the development of a range of workertech models and platforms in the UK. This would allow new and emerging solutions to develop and grow, in a ‘sandbox environment’ with a view to better supporting self-employed people(28).Inaddition,the government should actively support technology that helps ensure self-employed people have the opportunity to come together and discuss the issues that are affecting them, working with employers to make sure this is positively encouraged(29).Thegovernmentacceptsthisinprinciple.Weagreethattechnologyhasthepotentialtohelpthoseinself-employmenttocometogetheranddiscussissuesthataffectthem.Lookingtohelpencouragethedevelopmentofthesemodels,technologiesshouldbeakeyprincipleinthedesignofanyworkertechCatalyst.WewillworkwithkeystakeholdersoverthefollowingmonthstoinvestigatethepotentialforaworkertechCatalyst.

TheReviewofModernWorkingPracticesdididentifyanumberofareaswhereopportunitiesexistedtoimprovethequalityofworkusingtechnologybeyondworkertech.Forinstance,itidentifiedtheopportunitiesthatcouldariseaswemovetowardsmorecashlesstransactions.Specifically,itrecommendedthatthe government should consider accrediting a range of platforms designed to support the move towards more cashless transactions with a view to increasing transparency of payments, supporting individuals to pay the right tax. Wearecommittedtohelpingbusinessesandindividualstopaytherighttax.Asnewtechnologiesdevelop,wewillkeepunderreviewhowthesecouldbeusedtosupporttheself-employedwiththeirtaxobligationsandensurethatthereisalevelplaying-fieldbetweenbusinesses.Inaconnectedarea,atAutumnBudget2017,thegovernmentannouncedanambitiontoworkwithdigitalplatforms,whichallowbusinessestosellorrentgoodsandservicesinnewways,toexploreopportunitiestopromotebettertaxcompliancebytheirusers.Thegovernmentwillpublishacallforevidenceonwhatmoredigitalplatformscoulddotoensuretheirusersarecompliantwiththetaxrules.

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Quick and effective redress

Whenthingsgowrongintheworkplace,effectiveconflictresolutionisenhancedthroughopendialogueandearlycommunication.Mostemployersdotheirbesttocreateaninclusiveenvironmentandactivelyseektodealwithconcernsquickly.Whenthingsdogowrongthough,orindividualsfeelthattheyhavebeenwronged,everyoneexpectsquickandeffectiveredress.

Forcertainspecificemploymentrights,mostnotablytheNationalMinimumWage/NationalLivingWageandagencyworkers,thestateenforcesprotectionsontheindividual’sbehalf.Inallothercircumstances,itisfortheindividualtotaketheiremployertoanemploymenttribunal,viaAcasandtheprocessofearlyconciliation.Acas2017statisticsforearlyconciliationshowthat64percentdidnotendinatribunalclaim,18percentresultedinformalsettlement,with18percentprogressingtoatribunalclaim.Independentresearchfoundthatnearlyhalfofallclaimants(48percent)whousedearlyconciliationeitherreachedaformalsettlementorwereotherwisehelpedbyAcastoavoidatribunalclaim,while80percentofearlyconciliationparticipantsweresatisfiedwiththeservicetheyreceivedfromAcas19.

Thosewhoaremostvulnerableshouldbeprotected,andthisiswhythegovernmentwasconcernedwiththereviewfindingsthatthepracticeofunpaidinternshipscontinues.Socialmobilityisakeypriorityforthe

governmentandnooneshouldfeeldisadvantagedbyanexpectationthattheyshouldworkfornomoneytogainthenecessaryskillsandexperiencetoadvancetheircareer–whatevertheirage,background,orchosencareer.Thereviewrecommendedthatthe government should ensure that exploitative unpaid internships, which damage social mobility in the UK, are stamped out. The government should do this by improving both the interpretation of the law and enforcement action taken by HMRC in this area(39).

Thegovernmentacceptstherecommendationofthereview.Exploitativeunpaidinternshipsshouldnotexistandwewillworktoeradicatethese.WewilltakeactiontoimprovetheinterpretationofthelawandtheenforcementactiontakenbyHMRCinthisareatohelpstampoutillegalunpaidinternships.

ThelawisclearthatinternswhoareclassedasworkersmustbepaidatleasttheNMW/NLW.Anemployercannotavoidpayingsomeonetheminimumwagesimplybycallingtheman‘intern’orsayingthattheyaredoinganinternship.Determiningwhetheranindividualis‘working’isbasedonthepresenceofmultiplefactors;thereisnotasingledeterminingfeatureofaworker.Whetheranindividualisaworkerwilldependmostimportantlyonwhethertheyhaveacontracttoprovideworkfortherelevant

employer,inreturnforsomethingofvaluefromtheemployer.Thiscouldbe:monetarypayment(i.e.cashorotherformsoffinancialpayment);abenefit-in-kindsuchasvouchersormerchandise(notsimplythereimbursementofgenuine‘out-of-pocket’expenses);oranythingelsewhichisofvalue,suchastrainingwhichhasavaluetotheindividualbeyondwhatisimmediatelyneededfortheinternship,thepromiseofacontract,futurework,orpreferentialaccesstointerviewsorgraduateschemes.

Additionally,beingsubjecttosanctionfornotarrivingtoworkatanagreedtimeisanotherindicationthatanindividualisaworkerandentitledtotheNMW.Ifaninternshipwereterminatedafteraninternfailedtoarriveatwork

foraperiod,thismightindicatethattheinternhadagreedtoprovidework,andshouldthereforereceivetheNMW,becauseanemployerwouldbelesslikelytoterminateapurelyvoluntaryarrangementforthesamereason.

Ontheotherhand,genuinevolunteersarenotentitledtotheNMW.Volunteersbenefitfromthegeneralexperiencetheygainthroughbeinginaworkingenvironment,butarenotlegallyrequiredtoturnup,arefreetoleaveatanytime,andtheydonothaveacontract,sowouldnotexpectanymonetarypaymentsorbenefitsinkindfortheirvolunteeringduties.

Wewilltakefurtherstepstoengagewithsectorswhereunpaidinternshipsareprevalentandwithbodiesthatrepresentinterns,suchasuniversity

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careersservices,touncovergoodpracticeexamplesthatshouldbehighlightedandproliferated.Wewillalsoseektoraiseawarenessofexistinglegislationamongstbothemployersandworkersthroughbetterinformation,andbyupdatingtheguidanceinthisarea.

Theconcentrationofthisproblemwithinparticularsectorsprovidestheopportunityfortargetedaction.Thisgovernmentcontinuestoinvestheavilyinminimumwageenforcement,increasingthebudgetto£25.3mfor2017/18,upfrom£13min2015/16.HMRCalreadypro-activelycontactsemployerswhohaveadvertisedforunpaidinternshipstoensuretheyareawareandcompliantwiththelaw.Over500employershavebeencontactedinthelastthreemonths.Furthermore,inthecomingyear,wewillformallyaskHMRCtoprioritiseNMWenforcementeffortstofocusactivityonemployerswhouseunpaidinterns,throughintelligence-ledenforcement.

Ifthisapproachdoesnotwork,thegovernmentwillreviewtheexistingpolicyandlegalframeworkandwillconsiderwhatotheractioncanbetaken.

Thechangingworldofworkhasseenanumberofnewchallengesemergetoo.Forinstance,oneoftheissuesthatthereviewidentifiedasanareaforfurtherconsiderationwasthatofsupplychains.Specifically,itrecommendedthatthe Director of Labour Market Enforcement should consider whether the remit of the Employment

Agency Standards Inspectorate ought to be extended to cover policing umbrella companies and other intermediaries in the supply chain (17).ThegovernmentacceptsthereismeritinextendingthescopeoftheEmploymentAgencyStandardsInspectorateinthisway.ThenewDirectorofLabourMarketEnforcementisalreadyconsideringwhethertheEmploymentAgencyStandardsInspectorate,currentlytaskedwithenforcingtheEmploymentAgenciesAct1973andassociatedRegulations,shouldhaveitsremitextendedtoincludeenforcementofumbrellacompaniesandotherintermediariesinthesupplychainandwillreportsoon.Subjecttohisconclusions,thegovernmentintendstoexpandtheremitoftheEmploymentAgencyStandardsInspectoratetoincludeumbrellacompaniesandotherintermediaries.

Therehavebeencallsinrecentyearsforthescopeofstateenforcementtobeextendedtocoverotherprotections.ThereviewrecommendedthatHMRC should take responsibility for enforcing the basic set of core pay rights that apply to all workers – NMW, sick pay and holiday pay for the lowest paid workers(19).Thegovernmentacceptsthecaseforthestatetakingresponsibilityforenforcingtheserightsonbehalfofthemostvulnerableworkers.Wewillconsulttogatherdetailedevidenceofthescaleanddistributionofnon-compliancewithholidaypayandstatutorysickpayobligations,andthenevaluatethebestwaytotarget

enforcementactivity,remainingmindfuloftheneedtominimiseburdensoncompliantbusinessesandensurethatenforcementactivityiscosteffective.

Whereanindividualdecidestotaketheiremployertoatribunal,itisimportantthattheprocessisasfairandtransparentaspossible.Thereviewmadetworecommendationstoimprovetheinitialprocess,statingthat:

`` The government should ensure individuals are able to get an authoritative determination of their employment status without paying any fee and at an expedited preliminary hearing(20);and

`` The burden of proof in employment tribunal hearings, where status is in dispute, should be reversed so that the employer has to prove that the individual is not entitled

to the relevant employment rights, not the other way round, subject to certain safeguards to discourage vexatious claims(21).

Knowingwhichrightsyouareentitledtoisimportantandweunderstandwhythereviewmadetheserecommendations.However,wedonotbelievethatitisnecessarytotaketheserecommendationsfurtheratthisstage.Thisisbecauseatthetimeofthereviewtherewasarequirementtopayafeetobringaclaimtoanemploymenttribunal.Theleveloffeeschargedwereeither£160or£250tobringaclaimwithfurtherhearingfeesofeither£230or£950payablepriortothehearingitself.

FollowingaSupremeCourtrulinginJuly2017,employmenttribunalfeesarenotcurrentlybeingcharged.

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Asaresult,individualsarecurrentlyabletogetanauthoritativedeterminationofstatuswithoutpayingafee.TheCourtdidnotfindthechargingoffeeswaswronginprinciple,andacceptedthatfeeswerealegitimatemeansofmakingresourcesavailabletothesystemofcourtsandtribunals.Thegovernmentisconsideringverycarefullythecourt’sruling.Shouldthegovernmentdecidetoreintroducefeesintheemploymenttribunalsystem,itwouldatthatpointconsiderthequestionofwhethertochargefeesforproceedingsaboutthedeterminationofemploymentstatusandconsult.

Thegovernmentisalsomindfulofthereview’srecommendationthattheburdenofproofbereversedsubjecttoanumberofsafeguards,suchastheuseoftheonlinetooltoreachaninitialdeterminationofstatus.Sincethesesafeguardsarenotyetinplace,wedonotproposetoreversetheburdenofproofatthistime.Wewillreturntothisrecommendationwhendecisionshavebeenreachedonthewayforwardregardingemploymentlegislation,andwhenanonlinetoolhasbeendeveloped.

Whenindividualsaresuccessfulinbringingacaseagainsttheiremployer,itisrightthattheyreceivethefinancialawardthattribunalthinksappropriate.Thereviewidentifiedthatfartoomanyindividualshavetostruggletosecurethispaymentorneverreceiveitatall.Thisisunacceptable.Thereviewmadeanumberofrecommendationstoaddressthisunfairness.

Specifically,thereviewrecommendedthatthegovernmentshould:

`` Make the enforcement process simpler for employees and workers by taking enforcement action against employers/engagers who do not pay Employment Tribunal awards, without the employee/worker having to fill in extra forms or pay an extra fee and having to initiate additional court proceedings(22);

`` Establish a naming and shaming scheme for those employers who do not pay employment tribunal awards within a reasonable time. This can perhaps be an element of the reporting which we have suggested in relation to the composition of the workforce including the proportion of atypical workers in the workforce(23).

Weagreethatindividualswhowintheircaseattribunalandreceiveanawardshouldgetwhattheyareowed.Thegovernmenthasalreadymadechangestoimprovethisprocess,withadditionalfinesforemployerswhofloutthelaw.Butitisclearthatweneedtogofurther,andthegovernmentalreadyhasplanstobringaboutimprovementsinrespectofthisrecommendation.HerMajesty’sCourtsandTribunalService(HMCTS)areundertakingawide-rangingandcomprehensivereformoftheprocessfordealingwithunpaidawardsacrossthecourtsandtribunalssystem.Wewantthistobeasquickandstraightforwardaspossible.

Theconsultationonenforcementwhichwearepublishingalongsidethisresponsethereforeconsidershowbesttoensurethesereformsworkforemploymenttribunals.

Weacceptthevalueofanamingschemeforthoseemployerswhodonotpaytribunalawardswithinareasonabletime,andareconsultingonthebestwaytoimplementsuchascheme.

Thereviewalsoraisedconcernswithemployerswhoeitherignorecourtdecisionsorcontinuetofailintheirdutiesasemployers.Itrecommendedthatthegovernmentshould:

`` Create an obligation on employment tribunals to consider the use of aggravated breach penalties and cost orders if an employer has already lost an employment status case on broadly comparable facts - punishing those employers who believe they can ignore the law (24);

`` Allow tribunals to award uplifts in compensation if there are subsequent breaches against workers with the same, or materially the same, working arrangements (25).

Themeasureswewillbeconsultingonseektomaketheenforcementprocessfairerandmoretransparent.WeagreewiththereviewandtheWorkandPensionsandBusiness,EnergyandIndustrialStrategyCommitteesthatafairandtransparentframeworkwillactasadeterrent.

Thegovernmentacceptsstrongactionshouldtobetakenagainstemployerswhorepeatedlyignoreboththeirresponsibilitiesandthedecisionsofemploymenttribunals.Whenanemploymenttribunalhasreachedajudgementbasedonfactswhicharethesameasthefactsrelatingtootherworkersintheorganisation,theemployershouldupdatetheircontractsandemploymentrelationshipsaccordingly,unlessthereisagoodjustificationfornotdoingso.Thereviewrecommendsanumberofwaysinwhichactioncouldbetakenagainstemployersrepeatedlyignoringthedecisionsoftribunals,andourconsultationwillconsiderindetailhowtheserecommendationscanbeimplemented.Thiswillallowustoreachafinaldecisionon,forexample,thecircumstancesinwhicha‘repeatoffence’wouldbejudgedtohavebeencommitted.

Thegovernmentwillalsoraisethemaximumpenaltyforaggravatedbreachfrom£5,000toatleast£20,000assoonaspracticable.

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Security of opportunity

Security of opportunity

Progression is a key element of good work, and the government has a role to play in helping people to progress in the labour market.

Aspeopleworkforlongerandtechnologychangestheskillsrequiredinthelabourmarket,itisvitalthatpeopleareabletocontinuelearningthroughouttheirworkinglives.

Peoplealsorequiresupportinwork,sometimestoremaininthelabourmarketthroughperiodsofillhealth.Timeoutofthelabourmarketduetoillhealthsignificantlyimpactsonanindividual’sabilitytoprogresslaterintheircareerandsomoreshouldbedonetosupportworkersthroughthesetimes.

Likewise,thedemographicoftheself-employedischangingandmanyrequireadditionalsupportoradviceonissuessuchaspayingtherighttaxorsavingforthefuture.Thereisaroleforthegovernmentinallofthoseareas.


`` Ensuringthequalityofapprenticeshipsbymakingsuretheyarereal,paidjobsandincludesustainedtrainingandclearskillsgain;

`` SupportingthelearningofworkingadultsthroughtheNationalRetrainingSchemeandthecareerlearningpilots;

`` Developingaunifiedframeworkofemployabilityskills,aspartofourtechnicaleducationreforms,whichwillberefinedandtestedbyarangeofbodies.Thiswillalsobemadeopenlyavailabletootherorganisationssuchasemployersandschoolsandthehighereducationsectortouseiftheywish;

`` Performingdeeperanalysisandresearchintomakingstatutorysickpayabasicemploymentright;and

`` Workingacrossthegovernmenttounderstandhowwecansupportself-employedpeople,includingconsultingontax-registrationchecksandstartingaseriesoftargetedinterventionstoidentifyhowauto-enrolmentcanbestworkfortheself-employed.

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Increased mobility

The Review of Modern Working Practices set out the importance of ensuring everyone has the opportunity to progress in work.

Ithighlightedthatinvestmentintrainingisfallingandthatmanyindividualsinlower-paying,lower-skilledsectorscanbecometrapped,unabletoprogressintheircareer.Themodernapprenticeshipisanessentialpartofensuringpeopleareabletogainon-the-jobskillsanddevelopintheircareerandthenewlevyisanimportantstepinsupportingapartnershipapproach,withbusiness,indeliveringtheskillsrequired.

Itisimportantthatapprenticeshipscontinuetodelivertheskillsrequiredinachanginglandscape.Thereviewrecommendsthatas the new apprenticeship system beds in, the government should examine how the apprenticeship levy could be made to work better for those working atypically, including through agencies. The Institute for Apprenticeships should work with sectors with high levels of lower-paying and atypical work to ensure that they are making best use of the current apprenticeship framework. Following the delivery of the three million apprenticeships that it is committed to, the government should consider making the funding generated by the levy available for high-quality, off-the-job training other than Apprenticeships. The Institute for Apprenticeships should also be tasked with reporting on and addressing disparities in

the take-up of apprenticeships for different groups(34).Thegovernmentwelcomesthereview’sacknowledgementofthepositiveimpacttheapprenticeshiplevyhashadonemployerbehaviours,includinghowindustriesnewtoapprenticeshipsareconsideringhowtobenefitfromtheprogramme.Therearealreadystepsinplacetoensurethequalityofapprenticeships.Theymustbereal,paidjobs;haveaminimumdurationof12months;involvesustainedtrainingandclearskillsgainincludingoff-the-jobtraining;andmustincludeEnglishandmathsforthosewhohaven’tachievedgoodGCSEsinthosesubjects.

Thechangesarestillrelativelynew,andwewillcontinuetoassesstheimpactofthelevyandtheapprenticeshipsreformsonemployers,providersandindividuals.Wewillcontinuetoworkwithemployersonhowtheapprenticeshiplevycanbespentsothelevyworkseffectivelyandflexiblyforindustry,andsupportsproductivityacrossthecountry.

Thereviewalsorecommendsthat,learning from the failings of Individual Learning Accounts, the government should explore a new approach to learning accounts, perhaps with an initial focus on those with a long working record, but who need to retrain, and those in receipt of

Universal Credit. The new £40m Lifelong Learning fund is a starting point for this and should be developed by bringing together employers, civic society and the education sector(35).Thegovernmentagreeswiththeoverallaimofthisrecommendation.Weneedtoensurethatoureconomycanmakethebestoftheadvantagesthattechnologicalchangeshavetooffer.Itisbecomingincreasinglyimportantforadultstobeabletoretrainandup-skillduringtheirworkinglives.Weknowthatadultsfacemultiplebarrierstore-enteringlearning,includingfinancial,culturalandlackofsuitableinformationandguidance.Inparticular,adultsfromlowersocio-economicgroupsfacedisproportionateculturalbarriers,anditwilltakearangeofmeasurestohelpthemovercomethosebarriers.Thisiswhythe2017SpringBudgetallocatedupto£40mtofundpilotswhichwilltestambitiousnewapproachestocareerlearningoverthenexttwoyears.Thesepilotswillprovidecrucialinsightsintowhatworksinengagingadultsabouttheopportunitiesandbenefitsoftraining.Thefirstofthesepilots–theFlexibleLearningFund-waslaunchedon31October2017.ThroughthisFund,thegovernmentismakingavailableupto£10mtosupportprojectswhichdesignandtestflexibleandaccessiblewaysofdeliveringlearningtoworkingadultswithloworintermediateskills.Asecondsetofpilotswaslaunchedon30November2017.ThesepilotswillberuninLeeds,DevonandSomerset,Lincolnshire,Stoke-on-TrentandtheWestMidlandsandwilltestthebestwaystoreach

workingadultsandincentivisethemtotrain.WhatwelearnwillhelpuseffectivelytargettheNationalRetrainingSchemeasitrollsout.

IntheBudget,thegovernmentalsoannouncedaNationalRetrainingScheme:itwillbeanambitiousprogrammetodriveadultlearningandretraining.Theschemewillgiveindividualstheskillstheyneedtothriveandsupportemployerstoadaptastheeconomychanges.ItwillbedrivenbyanewNationalRetrainingPartnership–thecomingtogetherofthegovernment,businessandunionstohelpsetthestrategicdirectionoftheschemeandoverseeitsimplementation.Theschemewillincludeasetofsectorfocusedandemployer-driveninitiativestotargetimmediateskillsshortagesinkeysectors.Therewillbe£64mforschemesinthedigitalandconstructionsectors.Wewillgiveindividualstheskillstheyneedtodirecttheircareersandsecurethehigh-paid,high-skilledjobsofthefuture,focusingonthoseindividualsandsectorswhoneeditmost.

Wefullyrecognisetheimportanceofemployabilityskills,particularlyasexpectationschangeaboutcareerpaths,withpeoplemorelikelytomovebetweendifferentoccupationsthroughouttheirworkinglives.Thisiswhythedevelopmentoftransferableskillsisakeypartofourreformstotechnicaleducation.Wethereforeunderstandwhythereviewrecommendedthatthe government should use its convening power to bring together employers and the education sector to develop a

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consistent strategic approach to employability and lifelong learning. This should cover formal vocational training, ‘on-the-job’ learning and development, lifelong learning and informal learning outside work. It could be linked to the longer-term development of life-time digital individual learning accounts. As part of this, the government should seek to develop a unified framework of employability skills and encourage stakeholders to use this framework (36).Aspartofourtechnicaleducationreforms,wearecommittedtodevelopingaunifiedframeworkofemployabilityskillsthatclearlysetsoutthetransferableskillsthatshouldbeintegratedintotechnicalqualifications.Wewillconvenearangeofbodiestorefineandtestthatframework,andwillmakeitopenlyavailableforotherorganisations(suchasemployersandhighereducationproviders,wheresuccessfulframeworksarealreadyinuse)touseiftheywish.Wewillalsoconsiderhowitmaybeofusetootherareasofthesystem,suchasapprenticeships.

Thegovernmentisalsoinvesting£22minanEssentialLifeSkillsprogrammeaimedatbuildingyoungpeople’slifeskillssuchasresilience,teamwork,leadershipandotheremployabilityskills.Theprogrammeisaimedatdisadvantagedyoungpeoplelivinginthemostdeprivedareasofthecountrywhoarefacingthegreatestchallengeswhenitcomestosocialmobility.Theprogrammeisrunninginthetwelveopportunityareas.

Itwillgiveyoungpeopletheopportunitytodeveloparangeofknowledgeandskillsbyprovidinglife-shapingexperiencesthatwillhelpyoungpeoplebecomesuccessfuladults.

Ensuringpeoplereceivetherightadviceisessentialinsupportingpeopletomakechoicesabouttheirfuturecareer.Thatiswhythereviewrecommendedthatin developing a national careers strategy, the government should pay particular attention to how those in low-paid and atypical work are supported to progress. It should take a well-rounded approach including examining the role of high-quality work experience and encounters at different education stages(38).Thegovernmentagreesthatthosepeopleinlow-paidandatypicalworkshouldreceivepersonalisedinformation,adviceandguidanceabouteducation,employmentandtraining.TheNationalCareersServicealreadydoesanexcellentjobsupportingpeopleinawiderangeofjobs,includingthoseinlow-paidandatypicalwork.FromOctober2018,there-procuredNationalCareersServicewillprovideface-to-faceadviceforthoseprioritygroupsmostinneedofsupport,includinglow-skilledadults,manyofwhichareinlow-paidandatypicalwork.

Wealsoagreethatpeopleshouldhaveaccesstohigh-qualityworkexperienceandencountersatdifferentstagesoftheireducation.ThegovernmentsetupTheCareersandEnterpriseCompanytoimproveemployerengagementinsecondaryschoolsandcolleges.Sofar,overhalfofsecondary

schoolsandcollegeshavejoinedtheEnterpriseAdviserNetworkandarebeingmatchedwithenterpriseadviserswhoareseniorbusinessvolunteers.ThereformsthatwearemakingtotechnicaleducationwillincludeasignificantworkplacementaspartofthenewTlevelswhichwillbeavailablefromSeptember2020onwards.

Lookingacrossdifferentstagesofeducation,wewillsupportemployersintheirvaluableworktopreparethenextgenerationfortheworkplace.Wewillworkwiththemandothers,includingtheCareersandEnterpriseCompany(CES),toproduceguidanceinthesummerontherangeofworkplacementsdeliveredaspartofthegovernmentandotherprogrammes.Ourcareersstrategy,whichwepublishedinDecember2017,setsouthowwewillworkwiththeCEC,

employers,secondaryschoolsandcollegessothatinthefutureyoungpeopleshouldhaveatleastoneencounterayearwithemployers.

Forsome,progressioncanbeachievedbychangingemployer.Asmorepeoplelooktodigitalplatformstoenabletheirwork,theimportanceofonlineapprovalratingsisincreasing.Theseratings,whilecompiledbygigcompanies,relatetotheindividual,theirreliabilityandemployability.Thereviewrecommendedthatthe government should strongly encourage gig platforms to enable individuals to be able to carry their verified approval ratings with them when they move from the platform and to share them with third parties(37).Weagreethatastrongtrackrecordinonejobshouldbetransferabletoanother.ThenewGeneralData

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ProtectionRegulationscomingintoforcethisyearwillmakeiteasierforindividualstogainaccesstotheirpersonaldataandwewillmonitoritsimplementationtoseewhetherfurthergovernmentinterventionisrequiredtosupportthetransferabilityofratings.

Tosupportprogression,itisimportantthatindividualsarenotunfairlyrestrictedfrommovingjobs.InMay2015,acallforevidencewaspublishedinordertoidentifywhethernon-competeclauseswrittenintoemploymentcontractsarestiflinginnovation,particularlyforstart-upbusinesses.Suchclausescanbeusedbyemployerstopreventanindividualfromcompetingagainstthemiftheyleavetheiremployment,andcanincluderestrictionsonindividualsapproachingformerclientsorworkingforacompetitorforasetperiodoftimeafterleavingacompany.They

arealsosometimesreferredtoasrestrictivecovenantsinemploymentcontracts.Theintentionbehindthecallforevidencewastofullyunderstandwhatismeantbynon-competeclauses,whenandwhytheyareused,theirprevalence,whatthebenefitsanddisadvantagesare,whethertherearetransparencyormisperceptions,andwhattheissuesare.Theconsensusviewacrossthemajorityofresponseswasthatrestrictivecovenantsareavaluableandnecessarytoolforemployerstousetoprotecttheirbusinessinterestsanddonotunfairlyimpactonanindividual’sabilitytofindotherwork.Commonlawhasdevelopedinthisareaforoveracenturyandisgenerallyacknowledgedtoworkwell.HavingbuiltupapictureoftheUKexperienceviathiscallforevidence,wehavedecideditisnotnecessarytotakeanyfurtheractioninthisareaatthisstage.

Health and wellbeing at work

Long periods of time out of the labour market can reduce an individual’s ability to participate and progress in the future.

Assuch,thegovernmentwelcomesthereview’sfocusonamoreproactiveapproachtoworkplacehealth.ImprovingLives:theFutureofWork,HealthandDisability,publishedinNovember2017,setsoutourplantoworkinpartnershipwithemployerstocreategoodworkplacesthatsupportemployees’healthandwellbeing.ThrivingatWork:TheStevensonFarmerReviewofMentalHealthandEmployersalsosetouttheopportunitiesforbusinessesbytakingactiontosupportthementalhealthofalloftheiremployees.

No-oneplanstobesickatwork,butwhenitdoeshappen,individualsshouldfeelabletotakethenecessarytimeofftorecoverwithoutsufferingadetriment.Currently,StatutorySickPay(SSP)ispaidfromthefourthdayofillnessatarateof£89.35perweek.Thereviewrecommendedthatthe government should reform SSP so that it is explicitly a basic employment right, comparable to the National Minimum Wage, for which all workers are eligible regardless of income from day one. It should be payable by the employer and should be accrued on length of service, in a similar way to paid holiday currently. The government should ensure that there is good awareness of the right amongst workers and businesses (43).

ReformofSSPisbeingconsideredaspartofImprovingLives:theFutureofWork,HealthandDisability,publishedinNovember2017.Aspartofthis,wehavecommittedtobringforwardaconsultationonchangestoSSPtobetterenablephasedreturntowork,beforeintroducingthisreform.Thegovernmentwillfullyconsidertheseissuesintheroundaspartofwiderworkonhowtoachievetheappropriatebalanceofincentivesandexpectationsforemployers.Toensureanypolicymeasuresthatweintroduceareeffectivetheyneedtobeconsideredaspartofawidercoherentpackageforreform,notinisolation.Wearethereforeconsideringresearchandconsultationfindings,againstarangeofoptionsonemployerobligationsandincentives,includingMatthewTaylor’sproposalsonSSPeligibilityandaccrual,anda‘righttoreturn’toajobfollowingsicknessabsence.Addressingthesechallengesreliesonhavingrobustknowledgeofcurrentemployerbehavioursandhowdecision-makingdiffersacrossdifferenttypesofbusinesses.TheWorkandHealthUnitwillthereforerunacomprehensiveprogrammeofanalysisandresearchexaminingthewiderframeworkwithinwhichemployersmaketheirdecisionsandwillreportbackonpreliminaryworklaterthisyear.

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Currently,whenanindividualdoesrequiretimeoffsick,theyhaveveryfewprotectionsonreturningtowork.Thereviewidentifiedthatthoseindividuals with the relevant qualifying period are already entitled to have their job protected for a period of time when they are away from work for perfectly reasonable reasons, for instance, having a child. A similar approach should be adopted for sick leave with individuals having the right to return to the same job after a period of prolonged ill health. This right to return should be conditional on engagement with the Fit for Work service when an assessment has been recommended (44).Theprotectionsforindividualsreturningtoworkafteraperiodofprolongedillhealthrequirefurtherthought.TheFitforWorkassessmentservicehasbeenclosedduetoverylowtakeup,butwewillconsiderhowengagementwithoccupationalhealthservicescansupportreturnstowork,assetoutintheImprovingLives:theFutureofWork,HealthandDisabilitypublicationreferencedabove.

Giventhesignificantregionaldisparitiesthatexist,thereviewrecommendedthatthe relevant government departments – BEIS, MHCLG, DWP and DHSC explore ways of supporting and incentivising local authorities, particularly City Regions and combined authorities to develop integrated approached to improving health and wellbeing at work(42).

ThisrecommendationwasechoedinThrivingatWork:TheStevensonFarmerReviewofMentalHealthandEmployerswhichrecommendedthatgovernmentdepartmentsexplorewaysofsupportingandencouraginglocalnetworks,particularlythroughcityregionsandcombinedauthorities,todevelopintegratedapproachestoimprovingworkplacementalhealth.WeagreewiththisandhavesetoutinImprovingLives:theFutureofWork,HealthandDisabilityhowtheWorkandHealthUnit,ajointunitoftheDepartmentofHealthandSocialCareandtheDepartmentofWorkandPensions,isalreadyexploringhowtointegratehealthandworksupport.Infact,workisalreadyunderwaythroughanumberoftrialsofintegratedemploymentsupportinhealthsettings,andprototypeworkwiththeCornwallandIslesofScillyLocalEnterprisePartnership(LEP)toincreaseandbuildsustainablelocalnetworks.Weintendtoworkfurtherwithlocalareas.

Support for the self-employed

For those in standard forms of employment, a range of support mechanisms exist that assist them during their working lives.

Thisincludeseverythingfromthepayrollservicesthatensurepeoplepaytherighttaxaswellasmechanismstohelpthemsaveforthefuture,throughaworkplacepension.Manyself-employedpeopledomakesuchprovisions,bysavingfortheirretirement,payingtherighttaxandplanningfortheirfuture.However,aswehaveseen,theworkingdemographicischanginganditwouldbewrongtoconsidertheself-employedtobeasingle,homogeneousgroup.Somewouldbenefitfromadditionalsupportinalloftheseareas.

Thegovernmenthasalreadyacknowledgedthisshift,mostrecentlyinitsreviewofautomaticenrolmentpublishedinDecember2017.Thereportdrewonthemostrecentevidenceontheself-employedandsetoutthewidesegmentationwithintheself-employedpopulationintermsofage,income,typeofworkundertakenandthecomparableassetswiththeiremployedcounterparts.Italsohighlightedthataproportioncouldbenefitfromsupportwithlong-termsavings.

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Priortothisin2015,thegovernmentcommissionedJulieDeaneOBEtoleadareviewintogovernmentsupportforself-employedpeople.Herreportwaspublishedin2016andsetouttenrecommendationstoimprovesupportforthosestartingtheirownbusiness.Manyofthese,frombetterprovisionofadviceandguidancetoequalisingparentalbenefits,alignwiththerecommendationsputforwardinthereviewandthesearecoveredbelow.JulieDeaneOBEalsoidentifiedtheroleoftechnologyinsupportingtheself-employed–akeythemeunderpinningthereviewandtheIndustrialStrategy,andonewhichisagainechoedinthereviewofautomaticenrolment.Below,weaddressmanyoftheserecommendationsandsetoutthe

stepsthegovernmentwillbetakingtosupportself-employedpeopleinwork.

Webelievethateverybodyshouldhavetheinformationandguidancetheyneedinordertomakeinformedchoicesaboutfuturework.Thisisespeciallytrueofthedecisiontobecomeyourownboss.Thereviewrecommendedthatthe government should continue to develop advice and support for people embarking on a self-employed career to ensure they have the greatest chance of succeeding. This includes ensuring that self-employment is considered by work coaches at Jobcentre Plus as an option, where this would be appropriate, as well as ensuring careers advice includes information on becoming your own boss(27).

Wewantpeopletobeself-employedwhenitistherightthingforthem.TheNationalCareersServicealreadyprovidesinformation,adviceandguidanceonawiderangeofcareers,includingbecomingyourownboss,andwillcontinuetodoso.Thisisinadditiontoinformationprovidedonarangeofgovernmentandnon-governmentrunwebsites.ThroughJobcentrePlus,theNewEnterpriseAllowanceschemeprovidesmentoringandfinancialsupporttoout-of-workbenefitrecipientsandlow-earningUniversalCreditclaimantstostartandgrowabusiness.Theschemenowincludesapreliminaryworkshopforpeopleconsideringself-employmentthatsetsouttherealitiesofbeingyourownboss.

UniversalCreditalsoprovidessupporttothisgroup.AsUniversalCreditFullServicerollsout,JobcentrePlusistrainingacadreofworkcoacheswithspecialisedself-employmentknowledgetosupportpeopleinthisstart-upperiodtogrowtheirearningstoalevelofself-sufficiency.Inaddition,theNewEnterpriseAllowanceschemenowincludesmentoringsupportforFullServiceUniversalCreditclaimantsalreadyinbusinesstohelpthemtogrowtheirearnings.However,whereitbecomesclearthatself-employmentisnottherightroutetofinancialindependence,JobcentrePluscanprovidesupporttohelppeopletoseekemploymentinoneofthe800,000plusvacanciescurrentlyadvertised.

Thegovernmentisalreadytakingstepstoimproveprocessesfortheself-employed.TheprinciplesthatunderpintheMakingTaxDigital(MTD)programmewillsupportself-employedpeopletopaytherighttax.Thereviewrecommendedthatthe government should continue to work with providers to ensure that self-employed people have access to online tools that support compliance with the principles of MTD even if they do not meet the minimum statutory threshold(31).Wearecommittedtoensuringthatasmanybusinesses,landlords,andself-employedpeopleaspossiblecanbenefitfromastreamlineddigitaltaxsystem.Inresponsetofeedbackaboutthescaleandpaceofchange,weannouncedinJuly2017thatthesechangeswouldbephasedinwithoverthreemillionsmallbusinessesjoiningMakingTaxDigitaloveralongerperiod.Weareconfidentthatmanybusinesseswillrecognisethebenefitsofthenewsystemandjoinvoluntarily.Thegovernmentisworkingcloselywithsoftwareproviderstoensurethatthereisawiderangeofproductssuitableforbusinessesofdifferentsizes.AcontrolledpilotisunderwayforincomeTax;theVATpilotwillbeginsoon.

Weknowthattheself-employedareahighlydiverseandfast-growinggroupofpeople,withalmost50percentmoreself-employedpeoplenowthanin200020.Againstthis,weknowthatpensionparticipationhasbeendecliningamongself-employedpeople21.

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Thereviewrecommendedthatthe government should think creatively on ways to improve pension provision amongst the self-employed, making the most of opportunities presented by digital platforms and the move to more cashless transactions (30).Thegovernmentagreeswiththis.AspartofitsAutomaticEnrolmentReview2017:MaintainingtheMomentum(theAEreview),thegovernmentcommittedtoconsiderhowthegrowinggroupofself-employedpeoplecanbehelpedtosavefortheirretirement.ThegovernmentnotedtheAEreview’srecommendationswhich,alongwithotherinputsandextensivestakeholderengagement,haveprovidedanimportantcontributiontotheconversationsaroundthematterofretirementsavingfortheself-employed.TheAEreviewconcludedinDecember2017andsetoutthegovernment’spositionthatthecurrentframeworkforautomaticenrolmentcannotsimplybeextendedfortheself-employed,recognisingthediversityofthisgroupandthelackofconsistentofficialtouch-points,suchasthatwhichanemployerprovides,ontheself-employedcustomerjourney.Italsorecognisedthatnotalloftheself-employedpopulationwillneedadditionalsupporttosave,withevidencefromthePensionsPolicyInstitutehighlightingthataproportionofself-employedaresavingandhavecomparableassetsastheemployedpopulation,thoughdistributeddifferently.Takingthisintoaccount,theAEreviewsetoutplanstotestaseriesoftargetedinterventionsbywhichtoevaluatewhat

worksmosteffectivelyforthoseinthispopulationwhoareatriskofundersavingforretirement.ThiscouldincludeexploringtheopportunitypresentedbyMakingTaxDigital,orworkingwithorganisationsthatuseself-employedcontractedlabour,recognisingthatasinglesolutionmaynotmeetthelong-termsavingsneedsofsuchadiversegroup.Thisworkwillbeginthisyear,followingfeasibilitywork,andthegovernmentwillseektoevaluatetheseinterventionsandconsultonnextstepsbeforetheendofthisparliament.Thegovernmentrecognisesthevalueofcollaborationandinnovationinthisspaceandwilllooktoworkcloselywithpotentialdeliverypartnersandindustryexpertsindesigningthemostoperationallyeffectivesolution,whichcanbedeliveredatscale;meettheneedsoftheself-employed;andremainaffordable.TheDepartmentforWorkandPensionswillalsocontinuetoworkcloselywithBEIS,HMTandHMRConthedevelopingworkonemploymentstatus,andcontinuetoreinforcethatmanyatypicalworkers(i.e.agencyworkersandthoseonzerohourscontracts)arealreadyeligibleforautomaticenrolmentintoworkplacepensionswithinthecurrentautomaticenrolmentframework.

Thereviewalsorecommendedthatthe principles underlying the proposed National Insurance (NI) reforms in the 2017 Spring Budget were correct. The level of NI contributions paid by employees and self-employed people should be moved closer to parity, at the same time as action

being taken to address those remaining areas of entitlement – parental leave in particular – where self-employed people lose out (26).WhileweagreewiththereviewthatthesmalldifferencesincontributorybenefitentitlementnolongerjustifythescaleofdifferenceintheratesofNIcontributionspaidinrespectofemployeesandtheself-employed,weareclearthatwehavenoplanstorevisitthisissue.Thegovernmentalsoagreeswiththeprincipleofequalisingbenefitsfortheself-employed,butasthereviewsays,itisrighttoonlyconsidermakingchangestothisareaoncewehavecarefullyconsideredthisinthewidercontextoftax,benefitsandrightsoverthelongerterm.

Thereviewalsowelcomedtheopportunitytobuildonprogrammesdesignedtoensurepeoplepaytherighttax.ItrecommendedthatHMRC should link up with others across government to examine whether the underlying principles of conditionality could be applied more broadly in this space, supporting both self-employed people and consumers in their choices (33).Weacceptthisandaredevelopingrelevantproposals.AsannouncedatAutumnBudget2017,thegovernmentisconsultingonintroducingtax-registrationchecksintotheapplicationprocessforsomepublicsectorlicencesthatpeopleneedinordertotrade.

Thiswilladdanextrachecktothelicensingprocesstohelppeopleengagewiththetaxsystemattherighttime.Itwillmakeitharderforthosewhodeliberatelyhidetheirincometotrade,andmakethetaxsystemfairerforall.HMRCundertookanearly-stageconsultationlastyear,andtheresultsofthisconsultationwillsetoutsectorsinwhichthenewrulescouldpracticallyapply.Finalpolicydesignwillbeconfirmedfollowingconsultation.

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ConclusionConclusion

The Review of Modern Working Practices provides an invaluable insight into the issues facing working people in the UK.

Thegovernmentsharesthereview’sambitionthatallworkshouldbefairanddecent,withscopefordevelopmentandfulfilment.Goodworkandplentifulworkcanandshouldgotogether.Thisresponse,setalongsideandinthecontextofourIndustrialStrategy,hassetoutthestepswewilltaketodeliverthatambition.

Asthereviewmakesclear,westartfromapositionofstrength.Ouremploymentframeworkbalancestheneedforrightsandprotectionswiththeflexibilitythatisvaluedbyemployers,individualsandconsumers,andwhichissovitaltotheabilityofbusinesstocreatejobs.TheReviewofModernWorkingPracticeshighlightedanumberofareasinwhichthatframeworkneedsupdatingtoensurethatthebalanceismaintainedinthemodernlabourmarket.Webelievethat,withsomecarefullytargetedinterventions,wecanmakethechangesnecessarytoimprovethequalityofworkwhilstretainingtheflexibilityandremainingahometoinnovationandnewbusinessmodels.Werecognisethatmostemployerstreattheirstaffnotjustfairly,butwell,andwewillcontinuetoavoidoverbearingregulation.Butallemployersneedtotaketheirresponsibilitiesseriously,andtolistentotheirstaff.

AsthePrimeMinistersaidatthepublicationofTheReviewofModernWorkingPractices,itwilltaketimeandabroadpublicdebatetodetermineexactlytherightactionstotakeacrossalloftheareasofimportance.Insomeareas,wearepressingaheadwithreformswhichwebelievetohaveaclearvalue.Inothers,weareconsultingfurthertodevelopresponsesinmoredetailthanwasoutlinedinthereview,ortodevelopourunderstandingofthepossibleimpactsandimplications.Together,thisresponserepresentsthenextstepinourworktodelivergood,fairanddecentworkforeveryoneintheUK.

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Summary of recommendations from the review of modern working practices

Recommendation Response

1 Thegovernmentshouldreplacetheirminimalisticapproachtolegislationwithacleareroutlineofthetestsforemploymentstatus,settingoutthekeyprinciplesinprimarylegislation,andusingsecondarylegislationandguidancetoprovidemoredetail

Takeforwardfurtherworkonthecaseforlegislativechangeandpotentialoptionsforreform

2 Thegovernmentshouldretainthecurrentthree-tierapproachtoemploymentstatusasitremainsrelevantinthemodernlabourmarket,butrenameas‘dependentcontractors’thecategoryofpeoplewhoareeligibleforworkerrightsbutarenotemployees

Testrelevanceofcurrentapproachandnomenclature

3 Indevelopingthetestforthenew‘dependentcontractor’status,controlshouldbeofgreaterimportance,withlessemphasisplacedontherequirementtoperformworkpersonally

Consultonthedetailedteststodetermineaworker(ordependentcontractor)

4 Inredefiningthe‘dependentcontractor’status,governmentshouldadaptthepiecerateslegislationtoensurethoseworkinginthegigeconomyarestillabletoenjoymaximumflexibilitywhilstalsobeingabletoearntheNMW

Examinehowworkingtimeshouldapplytothegigeconomy

5 Indevelopingthenew‘dependentcontractor’test,renewedeffortshouldbemadetoaligntheemploymentstatusframeworkwiththetaxstatusframeworktoensurethatdifferencesbetweenthetwosystemsarereducedtoanabsoluteminimum

Takeforwardfurtherworkonthecaseforlegislativechangeandpotentialoptionsforreform

6 Thegovernmentshouldbuildonandimproveclarity,certaintyandunderstandingofallworkingpeoplebyextendingtherighttoawrittenstatementto‘dependentcontractors’aswellasemployees

Agreetoextendto‘workers’andconsultonwhatinformationtoinclude

7 Thegovernmentshouldbuildonlegislativechangestofurtherimproveclarityandunderstandingbyprovidingindividualsandemployerswithaccesstoanonlinetoolthatdeterminesemploymentstatusinthemajorityofcases

Acceptandwillbetakenforwardoncestatuschangesareagreed

8 ThegovernmentshouldasktheLPCtoconsiderthedesignandimpactsoftheintroductionofahigherNMWrateforhoursthatarenotguaranteedaspartofthecontract

AgreetoaskLPCtoconsidertheimpactsofthisoptionandofalternatives


9 Thegovernmentshouldextend,fromoneweektoonemonth,theconsiderationoftherelevantbreakinserviceforthecalculationofthequalifyingperiodforcontinuousserviceandclarifythesituationswherecessationsofworkcouldbejustified

Agreetoextendtheconsiderationoftherelevantbreakinservice,andconsultonchangestoclarifythesituationswherecessationofworkcouldbejustified

10 Thegovernmentshoulddomoretopromoteawarenessofholidaypayentitlements,increasingthepayreferenceperiodto52weekstotakeaccountofseasonalvariationsandgivedependentcontractorstheopportunitytoreceiverolled-upholidaypay

Acceptandconsultonthedetailsofincreasingthepayreferenceperiodto52weeks.Nottakingforwardproposalonrolled-upholidaypay.

11 Thegovernmentshouldamendthelegislationtoimprovethetransparencyofinformationwhichmustbeprovidedtoagencyworkersbothintermsofratesofpayandthoseresponsibleforpayingthem

Acceptandconsultonhowthiswillwork

12 Thegovernmentshouldintroducearighttorequestadirectcontractofemploymentforagencyworkerswhohavebeenplacedwiththesamehirerfor12months,andanobligationonthehirertoconsidertherequestinareasonablemanner

Acceptandconsulttoapplythistoawidergroupofworkers

13 Thegovernmentshouldacttocreatearighttorequestacontractthatguaranteeshoursforthoseonzerohourcontractswhohavebeeninpostfor12monthswhichbetterreflectsthehoursworked

Acceptandconsulttoapplythistoawidergroupofworkers

14 ThegovernmentshouldexaminetheeffectivenessoftheInformationandConsultationRegulationsinimprovingemployeeengagementintheworkplace.InparticularitshouldextendtheRegulationtoincludeemployeesandworkersandreducethethresholdforimplementationfrom10%to2%oftheworkforcemakingtherequest

Consultonextendingtheregulationandreducingthethreshold

15 ThegovernmentshouldworkwithInvestorsinPeople,Acas,TradeUnionsandotherswithextensiveexpertiseinthisareatopromotefurtherthedevelopmentofbetteremployeeengagementandworkforcerelations,especiallyinsectorswithsignificantlevelsoflow-paidorcasualemployment

Accept

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16 Thegovernmentshouldintroducenewdutiesonemployerstoreport(andtobringtotheattentionoftheworkforce)certaininformationontheworkforcestructure

Thegovernmentshouldrequirecompaniesbeyondacertainsizeto:

`` Makepublictheirmodelofemploymentanduseofagencyservicesbeyondacertainthreshold

`` Reportonhowmanyrequeststheyhavereceived(andnumberagreedto)fromzerohourscontractsworkersforfixedhoursafteracertainperiod

`` Reportonhowmanyrequeststheyhavereceived(andnumberagreed)fromagencyworkersforpermanentpositionswithahirerafteracertainperiod

``

Monitortheimpactofcorporategovernancereforms,supportedbyarefreshedCorporateGovernanceCodeandtakefurtheractionifthesereformsdonotchangebehaviour.Thiscouldincludea‘PeopleStatement’andwewelcomeviewsonhoweffectivethismightbe

17 ThenewDirectorofLabourMarketEnforcementshouldconsiderwhethertheremitoftheEmploymentAgencyStandardsInspectorateoughttobeextendedtocoverpolicingumbrellacompaniesandotherintermediariesinthesupplychain

ExtendtheremitofEmploymentAgencyStandardsInspectorateasrecommended,subjecttotheconclusionsoftheLabourMarketEnforcementDirector

18 Thegovernmentshouldrepealthelegislationthatallowsagencyworkerstooptoutofequalpayentitlements.Inaddition,thegovernmentshouldconsiderextendingtheremitoftheEmploymentAgencyStandardsInspectoratetoincludecompliancewiththeAgencyWorkersRegulations

ConsultationonbothSwedishDerogationcontractsandtheroleoftheEmploymentAgencyStandardsInspectorate,seekingtodeterminethelevelofabuse

19 HMRCshouldtakeresponsibilityforenforcingthebasicsetofcorepayrightsthatapplytoallworkers–NMW,sickpayandholidaypayforthelowestpaidworkers

Acceptthatthestateshouldtakeresponsibilityforenforcingtheserightsforvulnerableworkersandconsultonhowthiswillwork

20 Thegovernmentshouldensureindividualsareabletogetanauthoritativedeterminationoftheiremploymentstatuswithoutpayinganyfeeandatanexpeditedpreliminaryhearing

TherearecurrentlynofeesintheETsfollowingarecentSupremeCourtjudgment.Iffeesarereintroducedwewillconsultonthis

21 Theburdenofproofinemploymenttribunalhearings,wherestatusisindispute,shouldbereversedsothattheemployerhastoprovethattheindividualisnotentitledtotherelevantemploymentrights,nottheotherwayround,subjecttocertainsafeguardstodiscouragevexatiousclaims

Returntothisrecommendationafteranonlinetoolhasbeendeveloped


22 Thegovernmentshouldmaketheenforcementprocesssimplerforemployeesandworkersbytakingenforcementactionagainstemployers/engagerswhodonotpayETawards,withouttheemployee/workerhavingtofillinextraformsorpayanextrafeeandhavingtoinitiateadditionalcourtproceedings

Acceptenforcementprocesscouldbesimpler.Reformtotheenforcementprocessisplannedandwewillconsultonhowtoensurethisreformworksforemploymenttribunals

23 Thegovernmentshouldestablishanamingandshamingschemeforthoseemployerswhodonotpayemploymenttribunalawardswithinareasonabletime.Thiscanperhapsbeanelementofthereportingwhichwehavesuggestedinrelationtothecompositionoftheworkforceincludingtheproportionofatypicalworkersintheworkforce

Acceptandconsultonhowtoimplementanamingandshamingscheme

24 Thegovernmentshouldcreateanobligationonemploymenttribunalstoconsidertheuseofaggravatedbreachpenaltiesandcostordersifemployerhasalreadylostanemploymentstatuscaseonbroadlycomparablefacts-punishingthoseemployerswhobelievetheycanignorethelaw

Accepttheneedforstrongpunishmentforthosewhoignorethelaw.Consultationonhowtoextendtheuseofsanctions.Newproposalputforwardtoincreaselevelofpenaltyforaggravatedbreach

25 Thegovernmentshouldallowtribunalstoawardupliftsincompensationiftherearesubsequentbreachesagainstworkerswiththesame,ormateriallythesame,workingarrangements

Accepttheneedforstrongpunishmentforthosewhoignorethelaw.Consultationonhowtoextendtheuseofsanctions

26 ThereviewbelievestheprinciplesunderlyingtheproposedNIreformsinthe2017SpringBudgetarecorrect.ThelevelofNIcontributionspaidbyemployeesandself-employedpeopleshouldbemovedclosertoparitywhileweshouldalsoaddressthoseremainingareasofentitlement–parentalleaveinparticular–whereself-employedpeopleloseout

AgreethatthesmalldifferencesincontributorybenefitsnolongerjustifythescaleofdifferencesinratesofNIcontributions,butwehavenoplanstorevisitthisissue

27 Thegovernmentshouldcontinuetodevelopadviceandsupportforpeopleembarkingonaself-employedcareertoensuretheyhavethegreatestchanceofsucceeding.Thisincludesensuringthatself-employmentisconsideredbyworkcoachesatJobCentrePlusasanoption,wherethiswouldbeappropriate,aswellasensuringcareersadviceincludesinformationonbecomingyourownboss

Accept

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28 ThegovernmentshouldworkwithpartnerstocreateaCatalysttostimulatethedevelopmentofarangeofWorkerTechmodelsandplatformsintheUK.Thiswouldallownewandemergingsolutionstodevelopandgrow,ina‘sandboxenvironment’withaviewtobettersupportingself-employedpeople

Accept

29 Thegovernmentshouldactivelysupporttechnologythathelpsensureself-employedpeoplehavetheopportunitytocometogetheranddiscusstheissuesthatareaffectingthem,workingwithemployerstomakesurethisispositivelyencouraged

Accept

30 Weencouragethegovernmenttothinkcreativelyonwaystoimprovepensionprovisionamongsttheself-employed,makingthemostofopportunitiespresentedbydigitalplatformsandthemovetomorecashlesstransactions

Accept

31 Thegovernmentshouldcontinuetoworkwithproviderstoensurethatself-employedpeoplehaveaccesstoonlinetoolsthatsupportcompliancewiththeprinciplesofMTDeveniftheydonotmeettheminimumstatutorythreshold

Agree

32 Thegovernmentshouldconsideraccreditingarangeofplatformsdesignedtosupportthemovetowardsmorecashlesstransactionswithaviewtoincreasingtransparencyofpayments,supportingindividualstopaytherighttax

Agree

33 HMRCshouldlinkupwithothersacrossgovernmenttoexaminewhethertheunderlyingprinciplesofconditionalitycouldbeappliedmorebroadlyinthisspace,supportingbothself-employedpeopleandconsumersintheirchoices

Agree

34 Asthenewapprenticeshipsystembedsin,governmentshouldexaminehowtheapprenticeshiplevycouldbemadetoworkbetterforthoseworkingatypically,includingthroughagencies.TheInstituteforApprenticeshipsshouldworkwithsectorswithhighlevelsoflower-payingandatypicalworktoensurethattheyaremakingbestuseofthecurrentapprenticeshipframework

Followingthedeliveryofthethreemillionapprenticeshipsthatitiscommittedto,governmentshouldconsidermakingthefundinggeneratedbythelevyavailableforhigh-quality,off-the-jobtrainingotherthanApprenticeships.TheInstituteforApprenticeshipsshouldalsobetaskedwithreportingonandaddressingdisparitiesinthetake-upofapprenticeshipsfordifferentgroups

Weagreetoconsidernextstepsfollowingdeliveryofcurrenttargets


35 LearningfromthefailingsofIndividualLearningAccountsthegovernmentshouldexploreanewapproachtolearningaccounts,perhapswithaninitialfocusonthosewithalongworkingrecord,butwhoneedtoretrainandthoseinreceiptofUniversalCredit.Thenew£40millionLifelongLearningFundisastartingpointforthisandshouldbedevelopedbybringingtogetheremployers,civicsocietyandtheeducationsector

Agreeinprinciple,workbeingtakenforwardinotherworkprogrammes

36 Thegovernmentshoulduseitsconveningpowertobringtogetheremployersandtheeducationsectortodevelopaconsistentstrategicapproachtoemployabilityandlifelonglearning.Thisshouldcoverformalvocationaltraining,‘onthejob’learninganddevelopment,lifelonglearningandinformallearningoutsidework.Itcouldbelinkedtothelonger-termdevelopmentoflife-timedigitalindividuallearningaccounts.Aspartofthis,thegovernmentshouldseektodevelopaunifiedframeworkofemployabilityskillsandencouragestakeholderstousethisframework

Agreeinprincipleandwilldevelopaunifiedframeworkofemployabilityskills

37 Thegovernmentshouldstronglyencouragegigplatformstoenableindividualstobeabletocarrytheirverifiedapprovalratingswiththemwhentheymovefromtheplatformandtosharethemwiththirdparties

Acceptinprinciple;willmonitorchangesandassesswhatfurtheractionneedstobetaken

38 Indevelopinganationalcareersstrategy,thegovernmentshouldpayparticularattentiontohowthoseinlowpaidandatypicalworkaresupportedtoprogress.Itshouldtakeawell-roundedapproachincludingexaminingtheroleofhigh-qualityworkexperienceandencountersatdifferenteducationstages

Agree

39 Thegovernmentshouldensurethatexploitativeunpaidinternships,whichdamagesocialmobilityintheUK,arestampedout.ThegovernmentshoulddothisbyimprovingboththeinterpretationofthelawandenforcementactiontakenbyHMRCinthisarea

Accept

40 AspartofthestatutoryevaluationoftheRighttoRequestFlexibleWorkingin2019,governmentshouldconsiderhowfurthertopromotegenuineflexibilityintheworkplace.Forexample,itshouldconsiderwhethertemporarychangestocontractsmightbeallowed,toaccommodateflexibilityneededforaparticularcaringrequirement.ThegovernmentshouldworkcloselywithorganisationslikeTimewiseandWorkingFamiliestoencourageflexibleworkingandinitiativeslike‘happytotalkflexibleworking’toawiderrangeofemployers

Accept

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41 Thegovernmentshouldreview,andinanyevent,consolidateinoneplaceguidanceonthelegislationwhichprotectsthosewhoarepregnantoronmaternityleavetobringclaritytobothemployersandemployees.Inparallelwiththerangeofnon-legislativeoptionssetoutabove,thegovernmentshouldconsiderfurtheroptionsforlegislativeinterventions.Ifimprovementsaroundleadership,informationandadvicedonotdrivetheculturechangeweareseeking,thegovernmentwillneedtomovequicklytomoredirectivemeasurestopreventpregnancyandmaternitydiscrimination

Accept

42 WerecommendthattherelevantgovernmentDepartments–BEIS,MHCLG,DWPandDHexplorewaysofsupportingandincentivisinglocalauthorities,particularlyCityRegionsandcombinedauthoritiestodevelopintegratedapproachedtoimprovinghealthandwellbeingatwork

Agree

43 ThegovernmentshouldreformStatutorySickPaysothatitisexplicitlyabasicemploymentright,comparabletotheNationalMinimumWage,forwhichallworkersareeligibleregardlessofincomefromday1.Itshouldbepayablebytheemployerandshouldbeaccruedonlengthofservice,inasimilarwaytopaidholidaycurrently.Thegovernmentshouldensurethatthereisgoodawarenessoftherightamongstworkersandbusinesses

WorkbeingtakenforwardaspartofImprovingLives:theFutureofWork,HealthandDisability

44 Thoseindividualswiththerelevantqualifyingperiodarealreadyentitledtohavetheirjobprotectedforaperiodoftimewhentheyareawayforworkforperfectlyreasonablereasons,forinstance,havingachild.Asimilarapproachshouldbeadoptedforsickleavewithindividualshavingtherighttoreturntothesamejobafteraperiodofprolongedillhealth.ThisrighttoreturnshouldbeconditionalonengagementwiththeFitforWorkservicewhenanassessmenthasbeenrecommended

WorkbeingtakenforwardaspartofImprovingLives:theFutureofWork,HealthandDisability

45 Thegovernmentshouldseektodevelopabetterunderstandingofwhatprogressionatworkisandthepublicpolicyleverswhichinfluenceit.Buildingonthetrialstodate,governmentshouldworkwithexternalproviderstodeterminewhatreallyworksinsupportingindividualstoobtainbetterquality–andnotjustmore–work.Thisshouldnotbelimitedtoincreasingearningstoalevelofself-sufficiencyinUniversalCreditandshouldtakeparticularaccountoftheeffectofincreasesintheNationalLivingWage.Itshouldreflecttheopportunitiesofferedbyatypicalandgigworking

Accept–workongoingaspartofourassessmentonwhatconstitutes‘goodwork’andtriallingin-worksupportforUCclaimants


46 ThegovernmentmustplaceequalimportanceonthequalityofworkasitdoesonthequantitybymakingtheSecretaryofStateforBusiness,EnergyandIndustrialStrategyresponsibleforthequalityofworkintheBritisheconomy

Accept

47 Thegovernmentshouldidentifyasetofmetricsagainstwhichitwillmeasuresuccess,reportingannuallyonthequalityofworkonofferintheUK

Accept

48 TheDepartmentforBusiness,EnergyandIndustrialStrategyshouldtaketheleadforgovernmentinidentifyingemergingissuesandbethecustodianforensuringmarketconditionsallowforthecreationofqualitywork

Accept

49 TheemphasisintheIndustrialStrategyandsectordealsontechnologyandinnovationshouldbelinkedtotheimportanceofhumanfactorsindrivingproductivityandenablingmorerewardingworkinglives

Accept

50 TheLPCshouldhaveitsremitwidenedsothatitcanbothmakerecommendationstothegovernmentonwhatneedstochange(includingNMWrates)toimprovequalityofworkintheUKaswellasworkwithemployers,employeesandstakeholderstopromotequalityworkacrossallregionsandsectors

TheLPChasreservationsaboutextendingitsroleinthisway.TheIndustrialStrategyCouncilwillbetaskedwithadvisingonmeasuringandassessingqualityofwork.BEISwilltakeforwardproactiveworkwithsectorstopromotequalitywork,drawingontheadviceoftheLPC,Acas,theDirectorofLabourMarketEnforcementandothers

51 TheLPCshouldworkwithexperts,fromthenewDirectorofLabourMarketEnforcementtotheCharteredInstituteofPersonnelandDevelopment,aswellasbusinessgroupsandtradeunionsandmakerecommendationstogovernmentifchangestothelegalframeworkareneededtoensurefairanddecentworkisdelivered

Asabove

52 TheLPCshouldworkwithemployersandworkerrepresentativestoensuresector-specificcodesofpracticeandguidancearedevelopedthatsupporttheprovisionofqualitywork

Asabove

53 TheLPCshouldpromotewhatworksinsectorsandencouragegreatercollaborationtoimprovequalityworkinlow-payingareas

Asabove

77

Good Work

76


Summary of the recommendations from the work and pensions and business, energy and industrial strategy committees


1 Werecommendthegovernmentlegislatestointroducegreaterclarityondefinitionsofemploymentstatus.Thislegislationshouldemphasisetheimportanceofcontrolandsupervisionofworkersbyacompany,ratherthananarrowfocusonsubstitution,indistinguishingbetweenworkersandthegenuineself-employed

Thegovernmentwilltakeforwardfurtherworkonhowbesttoclarifydefinitionsofemploymentstatus

2 Werecommendthegovernmentlegislatetoimplementaworkerbydefaultmodel,assetoutinPart2ofourdraftBill.Thiswouldapplytocompanieswhohaveaself-employedworkforceaboveacertainsizedefinedinsecondarylegislation

Thegovernmentbelievesclarifyingstatusandrightsalongwithactionstomakeredresseasierandfastershouldhelpaddresstheconcernsunderlyingthisrecommendation

3 WerecommendthatthegovernmentworkwiththeLowPayCommissiontopilot,forworkerswhoworknon-contractedhours,apaypremiumontheNationalMinimumWageandNationalLivingWage.TheLowPayCommissionshouldberesponsibleforidentifyingsuitablecompaniestobeincludedinthispilot,basedonworkforcesizeandturnover.ProposedlegislationtoenablethisissetoutinPart3ofourdraftBill

AgreetoaskLPCtoconsiderimpactsofahigherNMWrateforhoursthatarenotguaranteedaspartofthecontract

4 Werecommendthatthegovernmentextendthetimeallowanceforabreakinservicewhilestillaccruingemploymentrightsforcontinuousservicefromoneweektoonemonth.WehavesetoutproposalsinPart5inourdraftBill

Agreetoextendtheconsiderationoftherelevantbreakinservice,andconsultonchangestoclarifythesituationswherecessationofworkcouldbejustified

5 Werecommendthatthegovernmentcreatesanobligationonemploymenttribunalstoconsidertheincreaseduseofhigher,punitivefinesandcostsordersifanemployerhasalreadylostasimilarcase.Wefurtherrecommendthatthegovernmenttakesstepstoenablegreateruseofclassactionsindisputesoverwages,statusandworkingtime.OurproposalsaresetoutinPart4ofourdraftBill

Thegovernmentwilllaunchaconsultationonbetteruseofexistingmechanismsandisputtingforwardanewproposaltoincreasethelevelofpenaltyforaggravatedbreach

6 WerecommendthegovernmentrulesoutintroducinganylegislationthatwouldunderminetheNationalMinimumWage/NationalLivingWage

Thegovernmenthasnoplanstolegislatetounderminetheminimumwage


7 Werecommendthatthegovernmentextendsthedutyofemployerstoprovideaclearlywrittenstatementofemploymentconditionstocoverworkers,aswellasemployees.Wefurtherrecommendthatthisrightapplyfromdayoneofanewjob,withthestatementtobeprovidedwithinsevendays.Thischangeshouldbemadebysecondarylegislationunders23(4)-(5)oftheEmploymentRelationsAct1999

Thegovernmentagreestolegislatetoextendto‘workers’astatementofemploymentconditionsandwillconsultonwhatinformationtoinclude

8 WerecommendthattheICEregulationsareextendedtoworkersaswellasemployees.Wealsorecommendthethresholdforimplementationoftheregulationsbereducedfrom10%to2%oftheworkforce.Thiswouldrequireamendingsecondarylegislationunders42oftheEmploymentRelationsAct2004

Thegovernmentwillconsultonextendingtheregulationandreducingthethreshold

9 WerecommendthegovernmentamendstheAgencyWorkerRegulations2010toremovetheopt-outforequalpay.WefurtherrecommendthattheEmploymentAgencyStandardsInspectoratebegiventhepowersandresourcesitneedstoenforcetheremainderofthoseregulations

ThegovernmentwillconsultonthebestwaytoaddresstheproblemsfoundintheuseofSwedishDerogationcontractsandtheremitoftheEmploymentAgencyStandardsInspectorate

10 Werecommendthatthegovernmentbringsforwardstrongerandmoredeterrentpenalties,includingpunitivefines,forrepeatorseriousbreachesofemploymentlegislation,andexpand‘namingandshaming’toallnon-accidentalbreachesofemploymentrightsbybusinessesandsupplychains

Thegovernmentwillextendnamingandshamingtounpaidtribunalawardsandisputtingforwardanewproposaltoincreasethelevelofpenaltyforaggravatedbreach

11 WerecommendthatthegovernmentprovidestheDirectorofLabourMarketEnforcementandthemainenforcementagencieswiththeresourcesnecessarytoundertakebothreactiveandproactiveroles,includingdeep-divesintoindustrialsectorsandgeographicareas,andsupply-chainwideenforcementactions.Whereextraresourcesareneeded,theyshouldbefundedthroughhigherfinesonnoncompliantorganisations.Wealsorecommendthatthegovernmentsetsout,inresponsetothisreport,howitintendsthepowersandresourcesoftheDirectorofLabourMarketEnforcementwilldevelopoverthenextfiveyears

TheDirectorandhisstaffarejointlyfundedbyBEISandtheHomeOffice.Thegovernmentrecognisesthatappropriateresourcesmustbeallocated.Thegovernmenthasincreasedsignificantlytheresourcesforlabourmarketstateenforcementinrecentyears.WeexpecttheDirectorofLabourMarketEnforcementtoreflectonandguidetheleveloffutureresourcesinhisannualreports

Good Work

78

References

1. ONS,UKlabourmarket,January2018

2. ONS,Vacanciesbyindustry,January2018

3. ONS,OutputperhourworkedinUK,Out-putperhourworked,UK,January2018

4. ONS,Realaverageweeklyearn-ings,January2018

5. https://www.gov.uk/government/up-loads/system/uploads/attachment_data/file/500317/self-employed-income.pdf

6. ONS,RegionalLabourMar-ketStatistics,January2018

7. Medianearningsforfull-timeemployees

8. ONS,AnnualSurveyofHoursandEarnings,October2017

9. ONS,AnnualSurveyofHoursandEarnings,April2017

10. https://www.jrf.org.uk/report/effect-occupa-tion-poverty-among-ethnic-minority-groups

11. https://publications.parliament.uk/pa/cm201719/cmselect/cmworpen/352/352.pdf

12. BEISResearch,Theexperiencesofin-dividualsinthegigeconomy,2018

13. BEISResearch,Thecharacteristicsofthoseinthegigeconomy,2018

14. ONS,Analysisofjobspaidlessthanorclosetothenationalminimumwageornationallivingwage,October2016

15. TheRecruitment&EmploymentConfederation,Recruitmentindustrytrends2016/17,availableat:www.rec.uk.com/news-andpolicy/re-search/recruitment-industry-trends2

16. HOST,QualitativeAnalysisoftheuseofPayBetweenAssignmentcontractsforAgencyWorkersincludingtheroleofUmbrellaOrganisations,2015

17. https://www.gov.uk/government/collections/workplace-employment-relations-studyw-ers#key-publications-of-the-2011-wers

18. https://www.gov.uk/government/up-loads/system/uploads/attachment_data/file/32158/10-1380-information-con-sultation-ice-regulations.pdf

19. http://www.acas.org.uk/index.aspx-?ar-ticleid=6057andhttp://www.acas.org.uk/index.aspx?articleid=5351

20. ONS,UKlabourmarket,January2018

21. http://www.resolutionfoundation.org/app/uploads/2015/05/Self-em-ployment-and-pensions.pdf

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