UK employment briefing – October 2017
24 October 2017
Growing reputational and legal pressures relating to casual, gig and flexible workers
Businesses engaging large numbers of workers through ‘temp’ agencies or hiring workers on a casual, freelance, gig or contractor basis are increasingly subject to scrutiny from trade unions, the media, consumers and the government, often linked to allegations of tax avoidance, exploitation, dangerous practices and more. Several court cases brought by gig workers claiming employment rights have also been successful.
Against that background, the UK Prime Minister commissioned a review (the ‘Taylor Review’) to consider how employment practices need to change in order to keep pace with modern business models. The Taylor Review has published its recommendations, some of which are controversial. Recommendations included: clarifying the legal test which determines which employment rights are accorded to different categories of worker, adapting and increasing the national minimum wage for some flexible workers, improving the rights of agency workers and providing written statements from day 1 for ‘workers’. However, political realities have been transformed by the recent UK general election and it is currently unclear whether, or how, they will be implemented given the minority government.
By way of background, there is confusion among some employers, workers and the media about the way employment rights apply to some, but not all, of those in work and about the relationship between employment rights and tax status. This confusion is, in part, contributing to the current controversies over the use of flexible employment models.
Negotiations are ongoing over the terms of the UK leaving the EU. Amongst the most critical employment law considerations are the retention of existing EU employment rights in the UK, post-Brexit, and what future immigration provision might look like, on the assumption that freedom of movement ends. Whilst the UK Government has indicated a commitment to the former in principle, employers are concerned to understand what transitional and future arrangements will apply to EU workers and the likely impact on their staffing and skills needs.
Gender and other pay gaps
New regulations mean larger employers must publish information about differences in average pay for men and women in their organisation. Employers are also under increasing pressure to volunteer details of pay by ethnicity. In addition, the government plans to legislate to compel quoted companies to report annually the ratio of CEO pay to the average pay of their UK workforce.
Media interest is high, bringing reputational risks for those whose data reveals significant pay gaps. Unexplained pay gaps could also trigger tribunal claims if discrimination is suspected. As such, some employers are undertaking pay audits to understand differentials, identify risks, present information meaningfully and respond to challenging questions. Pay reporting is about under-representation at senior levels, not just unequal pay, so employers need to look at how they attract, recruit, develop and retain employees.
For more information please contact Constanze Moorhouse.