How to prepare for changes in freelancer employment rights


As a business using the services of a self-employed professional, or worker, you could now be responsible for providing similar employment rights to the ones delivered to employees, including those connected to workplace health.

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Gorilla Accounting

Gorilla Accounting is a technology-driven accountancy firm, exclusively for contractors and freelancers.

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The changing face of self-employment has been recognised by Theresa May as a force for economic growth. The Prime Minister vowed in 2016 that “it is essential that these virtues [flexibility and innovation] are combined with the right support and protections for workers,” in order to keep pace with the "changing world of work."

As a result, May appointed Matthew Taylor, RSA Chief Executive (Royal Society for the Encouragement of Arts, Manufactures and Commerce), to produce a review analysing 'Modern Working Practices'. The report is highly geared around employment rights, and promotes further workplace protections for the self-employed.

How to prepare for changes in freelancer employment rights

What are the recommendations made by Matthew Taylor?

Dependent Contractor

The much-awaited report by Matthew Taylor puts forward a series of recommendations to the government, including to rename the term 'worker' to 'dependent contractor.' Taylor points out that in order to deliver fair and decent work, the government should make legislation clearer by clarifying employment status.

Right to request contract

Another proposal made in the report includes the right to request a contract that better reflects the actual hours worked for those who have been in post for 12 months.

Transparency

Businesses should be required to report on the use of agency work, short hour contracts and zero hour contracts in annual reports, including supply chains.

Financial protection

Matthew Taylor calls for national minimum wage protection and Holiday Pay for those working non-guaranteed hours, and in very flexible arrangements.

Workplace wellbeing

Matthew Taylor illustrates in his report that “the UK labour market is characterised by flexibility,” hence the need for two-way flexibility between the end-client and worker in order to keep participation rates high.

The recommendations made by Matthew Taylor are subject to a vote, but the government commissioned report is still a notable step towards a change in the treatment of self-employed professionals. In an attempt to promote 'Good Work', Taylor places a heavy emphasis on career development and workplace health.

E.g. If employers change arrangements at a short notice, workers should be able to claim for compensation, and if any non-contractual hours are worked – workers should be entitled to a premium.

The Taylor report states that fulfilment and development is an 'essential part of [the] responsibility of employers,' as it contributes to workplace health and wellbeing. Taylor goes on to suggest that businesses should be able to prove that workers can earn more than the national minimum wage.

Employment Tribunals

The Taylor review points out that, "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 around - subject to certain safeguards to discourage vexatious claims."

This puts the responsibility of 'burden of proof' with the business, rather than the flexible worker, in the hope to unload an 'unfair burden'.


Auto-enrolment pensions scheme

Prior to the release of the Taylor report, the government firmed plans to introduce an automatic enrolment pensions scheme for the 4.8 million self-employed professionals working in the UK.

Pension giants, Royal London and Aviva released their 'blueprint for getting the self-employed into pensions', which details the ins and outs of the auto-enrolment pensions scheme. Self-employed professionals do not currently receive employer contributions to their private pension, as they are not actually employed.

The auto-enrolment pensions scheme will not require temporary employers to make contributions. Royal London and Aviva have suggested that the government should be required to make contributions for the self-employed.


How the changes could impact larger organisations

Larger organisations such as Uber, Deliveroo, City Sprint and Pimlico Plumbers have been in the spotlight in relation to the classification of their workers. In 2016, workers from Uber, the taxi-hailing app, won a landmark employment tribunal which concluded that Uber drivers were not self-employed contractors, but employees.

As a result of the crackdown, it was ruled that Uber drivers should be entitled to basic employment rights and benefits such as holiday pay and the national minimum wage. The 'monumental victory' has focused the spotlight on large scale organisations such as City Sprint, which resulted in the same conclusion as the Uber case.

In light of the employment tribunals that ruled in favour of the workers, larger organisations, as well as small businesses should place due focus on the classification of their workers, and the employment rights that are on offer.

Taylor also calls to pull the blanket from under businesses who use agency workers – but fail to disclose this. The RSA Chief, and former head of policy at No 10 under Tony Blair, suggests that businesses using agency workers should do so in a transparent manner by disclosing the number used in annual reports.


What an HR manager in a larger organisation can do to prepare themselves

It's worth keeping an eye out to see the enforceable extent of the recommendations made by Matthew Taylor. IPSE, the Self-Employed & Freelance Association, have also been campaigning for the term self-employed to be "clearly differentiated from other employment statuses and calls for a statutory definition of self-employment," as suggested by Taylor.

The 'Good Work' review has received an underwhelming response from a portion of industry professionals, yet it has been hailed by many. As a HR manager in a larger organisation, you can prepare yourself by finely establishing the rights that are on offer to your freelancer workforce, and check if this abides by the 'two-way flexibility' point.

If the amount of flexibility on offer is upped, it could prove beneficial to measure if any changes to productivity occur, and whether freelancers return for future work. HR managers for large organisations can look into the development opportunities that are on offer for freelancers, and ensure that there is room of progression.

In terms of financial recommendations made by Taylor, these are yet to be implemented, but this is subject to final approval.


Other Resources

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