UK: Taylor Review recommendations and the mixed reactions of the social partners

The Taylor Review, commissioned by the UK government and published in July 2017, set out to determine best practices in modern employment and to define the basic rights of workers in light of widely publicised cases of poor working conditions. However, despite the review’s many recommendations, there is no legal requirement for the government to implement any of them.


Matthew Taylor, Chief Executive of the Royal Society of Arts, was commissioned by UK Prime Minister Theresa May in October 2016 to conduct a review into modern employment practices. This followed revelations of poor working conditions in companies such as Sports Direct, ASOS and Amazon, as well as growing concern about the lack of basic employment rights for many working in the ‘gig economy’. Also influential was the landmark employment tribunal success of a plumber and  Uber taxi drivers on their employment status late in 2017. 

The 116-page report, Good work: The Taylor review of modern working practices (PDF) was published on 11 July 2017. The report followed broad consultation and a series of face-to-face roadshows held across the country, during which the panel gathered evidence from workers, employers, academics and advocacy organisations.

Main recommendations

The review’s stated goal is that ‘all work in the UK economy should be fair and decent’. However, the authors believe that the ‘British way’ of flexible labour markets works, and seek to build on the distinctive strengths of the existing framework of regulation, arguing that ‘the best way to achieve better work is not national regulation but responsible corporate governance’.

The main recommendations address the following issues:

  • the nature of employment and tax status
  • the minimum wage
  • zero-hours contracts and agency work
  • changes to rights/benefits
  • information and consultation
  • enforcement/tribunals

Employment status

The review rejected calls to replace the current three-tier system of employment status (employee, worker, self-employed) with a binary distinction between employee and self-employed. However, it suggests that clearer distinction be made between the three, proposing a new definition of ‘worker’ or ‘dependent contractor,’ with this resting on how much ‘control’ the company exerts over the person (a dependent contractor would have greater rights). The review proposes amendments to existing legislation so that it definitively states the tests for employment status.

The review also recommends the creation of a free online tool that would provide individuals and employers with an indication of employment status. In the future, if an individual brings a tribunal claim around employment status, the burden of proof should rest with the employer as long as the individual has obtained confirmation of their status from the online tool and the Advisory, Conciliation and Arbitration Service (ACAS).

Tax status

UK tax law does not recognise ‘worker’ status, distinguishing only between employees and the self-employed. The review advocates that all workers should be ‘employees’ for tax purposes and also backs previous proposals by the government to equalise national insurance for the employed and self-employed. This would lead to a significant increase in tax revenues.

Minimum wage

The review recommends that the Low Pay Commission (LPC) should develop sectoral strategies to ensure that people employed in sectors characterised by low pay can progress beyond minimum wage level. Furthermore, ‘platform workers’ classed as ‘dependent contractors’ should receive at least the national minimum wage (NMW), but on a piece-rate basis. Under these rules, a ‘gig’ company would have to demonstrate through its data that at times of normal demand, an average person could earn 20% more than the NMW. However, if that person chose to work at a time of low demand, they might not earn the minimum wage; the company would have to use its real-time data to warn them of this in advance.

Regarding minimum-hours contracts, the LPC should advise on the impact of a higher NMW for hours worked over and above those contractually-specified (with employers able to average hours and pay over a reference period).

Zero-hours workers and agency workers

There is no call for the abolition of zero-hours contracts, but it is proposed that those in a post for 12 months have the right to request a contract with a guaranteed number of hours, with their average weekly working hours over the previous 12 months as the starting point for any new contract.

Agency workers should also have the right to request a direct contract of employment after 12 months with the same hirer. The review also recommends the abolition of the Swedish derogation model; this model allows companies to exclude agency workers who have a contract that provides for a minimum level of pay between assignments from the right to the same pay as permanent employees.

It is proposed that the Employment Agency Standards (EAS) Inspectorate police ‘umbrella companies’ and impose new duties on larger employers to publish their use of agency services beyond a certain threshold, as well as the number of requests received (and agreed to) from agency workers for permanent positions and from zero-hours workers for fixed hours.

Proposed changes to rights and benefits

The review proposes a right of return to protect an individual’s job if they take sick leave due to prolonged ill-health; this would guaranteeing that they could return to the same or a similar job. The right would be conditional on an appropriate qualifying period of service and engagement with the Fit for Work assessment service.

Employees, including those formally defined as workers, should have a right to a written statement that outlines their employment terms and conditions from the first day of employment, says the review. At the moment, employers need only provide this within two months of the start of work, and are not obliged to give a ‘worker’ any written confirmation.

The review suggests that ‘dependent contractors’ be granted additional protections. These include bolstering continuity of employment, widening coverage of sick pay and broadening entitlement to holiday pay.

Bolstering continuity of employment

It can be difficult for casual workers to establish the minimum period of continuous employment needed to qualify for some employment rights, such as the right to claim unfair dismissal, usually only acquired after two years’ service. Currently, if there is a gap in employment of a week or more, continuity of employment is legally broken. The review recommends that this should be increased to one month.

Widening coverage of statutory sick pay

Statutory sick pay is currently only paid to those who meet the income threshold for national insurance. The review recommends that all workers are eligible, accruing the right to sick pay on length of service.

Broadening entitlement to holiday pay

Holiday entitlement for those working flexible hours is currently based on the number of hours worked over the previous 12 weeks, which may exclude those, for example, who perform seasonal work. The review proposes that the reference period be increased to 52 weeks and that HM Revenue and Customs should police employers’ compliance with the holiday pay entitlements of low-paid workers.

Consultation of employees

The review proposes widening the Information and Consultation of Employees Regulations, suggesting that the regulations should apply when 2% of the workforce (rather than the current 10%) request it.

Employment tribunals

The review recognises ‘with regret’ that it is unlikely the government will abolish tribunal fees. However, it proposes that individuals should not have to pay for bringing cases to establish employment status. When employers do not pay tribunal awards, the government (on the claimant’s behalf) should be able to pursue payment. Currently employers can only be pursued for payment of the penalty. A ‘name and shame’ scheme to identify employers who do not pay is also proposed.        

Reactions to the review

The Confederation of British Industry (CBI) welcomed aspects of the review: the proposed retention of the three-part employment status framework; the commitment to build upon the flexible labour market; and the endorsement of responsible corporate governance. The CBI said it would approve some ‘well-targeted’ legislative changes, such as the establishment of a fast-track tribunal process to establish employment status, and a right for those on zero-hours contracts to request fixed hours. However, the CBI voiced concerns over the recommended rewriting of employment status tests, the abolition of the Swedish derogation model and suggested changes to the application of the minimum wage.

There was a range of reactions to the Taylor Review. The Recruitment and Employment Confederation warned against scrapping the Swedish derogation model. A Chamber of Commerce spokesperson cautioned against the danger of unintended consequences that might arise from some suggested changes, such as wage premiums for uncertain working hours.

A number of trade unions expressed concerns about the review’s failure to tackle many significant issues. The Trades Union Congress (TUC), while welcoming some of the proposals, said that the review was ‘not the game-changer needed to end insecurity at work’.

The UK’s largest trade union, Unite, said the review had ‘spectacularly failed to deliver’ on its pledges, with similar criticisms made by the Communication Workers Union (CWU), the Public and Commercial Services Union (PCS) and the GMB union.


The review fits with the prime minister’s claims that the Conservative Party has always been the true party of workers. However, it should be noted that the government is not obliged to implement any of the recommendations. Moreover, given the current political uncertainty, it is unclear whether the government will immediately embark on implementing some or any of the proposals. Its response to the review is expected in the autumn.

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