Mark Hamilton and Claire McKee: Employment law must keep up with workplace changes

Claire McKee is an associate in Dentons; employment team
Claire McKee is an associate in Dentons; employment team
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The government’s response to Matthew Taylor’s 53-point plan towards ‘Good Work’ has highlighted the future challenge for employment law to keep pace with technology and innovation in the workplace. With a series of consultations now in the pipeline, should the recommendations of the CEO of the Royal Society of Arts be implemented, it would herald one of the most significant changes to this area of law since the Employment Rights Act of 1996.

Taking into consideration aspects as diverse as wages, employment quality, education and training, working conditions, work-life balance, consultative participation and collective representation, the review recommended extra protection for the UK workforce, ranging from clarity over employment status to extra rights for those on zero-hours contracts. Its key message was that everyone should enjoy a “baseline” of protection and be given routes to enable progression at work.

Mark Hamilton is a partner  in Dentons' employment team

Mark Hamilton is a partner in Dentons' employment team

Now the government has finally responded, with a threefold approach seeking to ensure: that vulnerable workers know about their rights; that workers receive the benefits and protections that they are entitled to; and that employers who breach workers’ rights are penalised.

Some proposals actually go further than Taylor’s recommendations. They clarify that it is the portion of the workforce who do not currently have this “baseline” of employment protections who are intended to be the beneficiaries of changes in the law. Examples of the possible changes include holiday and sick pay entitlements for gig economy workers wrongly classified as self-employed; extending ‘day one’ rights, such as guaranteeing a payslip, to all workers including casual and zero-hours employees; naming and shaming employers who do not pay tribunal awards; and increasing employment tribunal penalties from £5,000 to £20,000 for employers showing malice, spite or gross oversight.

The exact form and timing of these changes is uncertain. However it is clear that the challenge for modern employment law is to better reflect the changes taking place in wider society.

One area the government seems satisfied with is that of restrictive covenants. It made clear that it would not be taking any action on covenants as the responses to their recent call for evidence indicated that these restrictions are a “valuable and necessary tool for employers to use to protect their business interests and do not unfairly impact on an individual’s ability to find other work”. The government concluded that the courts have developed an effective system for regulating and enforcing restrictive covenants. That is perhaps debatable but the government will focus its energies on other changes.

The government appears to agree that too many employers are still relying on zero hours contracts, to the detriment of workers/employees. They seem to have accepted Taylor’s recommendations that a higher National Minimum Wage rate should be considered for hours not guaranteed by the individual’s contract and that zero hours workers should have the “right to request” a contract with guaranteed hours after 12 months. Nevertheless some of the proposals, such as introducing “a more predictable contract”, clearly need further clarification before the government can truly be said to have taken significant steps to implement the recommendations.

Hopefully, this clarity will emerge from the four consultations the government has now launched. These will consider: employment status; increasing transparency in the labour market; agency and atypical workers; and enforcement of employment rights.

The employment status consultation will no doubt be the one under the spotlight, given the abundance of high-profile case law in recent months relating to the gig economy – the Uber and Deliveroo cases, for example.

So far the government has been a little tentative in its response as there are concerns that some of the proposed measures may create additional burdens on business that might ultimately make it harder for those in the labour market to find work.

The four consultations close in May and June. It is widely thought that it will be the government’s responses to these that will reveal their real opinion of the Taylor Review.

Mark Hamilton is a partner and Claire McKee is an associate in Dentons’ employment team