Employee, self-employed, worker and now, “dependent contractor”?

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Worker status was a subject of concern, long before taxis and pizzas were ordered on smartphones. However, today’s Taylor Review has thrown up a potential new category for those in the gig-economy: dependent contractor. So, what do employment lawyers and HR professionals make of it?

Sean Nesbitt, partner in the employment team at Taylor Wessing, says:

“Retaining and modernising the UK’s distinctive worker status with the “dependent contractor” tag may help the UK provide a good labour market to compete for international investment, without risking European trade sanctions for undermining EU rules or worker rights but does not change the current three-tier approach in the UK (employee, worker/dependent contractor, self-employed).”

Thompsons Solicitors’ chief executive Stephen Cavalier says:

“The creation of a new ‘dependent contractor’ status for gig economy workers would further complicate existing categories of how workers are defined in law.

“What is needed is one category which affords all workers all employment rights from day one of their contracts starting. This new status is unclear and unnecessary.”

David Widdowson, co-chair of the Employment Lawyers Association Working Party and partner at Abbiss Cadres, says:

“The new category of “dependent contractor” is clearly designed to cover those workers in the gig economy which cover a wide spectrum – from those who seek work in this way simply because it has no ties and they can come and go as they please, to those who cannot find any paid work anywhere else and are highly dependent on it for a living.

“The report recommends that dependent workers have the same rights as other “workers” which would include a right to the minimum wage and to paid holiday.  Presumably the intention is that these dependent workers should have these rights but at the same time be taxed as self-employed. However, the report also looks to tackle the tax and national insurance contributions “lost” to the economy through cash in hand arrangements or under-reporting.”

Emmajane Taylor-Moran, Partner, Head of Employment Law at Gelbergs Solicitors says:

“This proposal is a ridiculous over-complication of existing law on employment status, which benefits neither businesses nor gig staff overall. It creates a new tier of status and rights and is likely to cause confusion and disputes and be unworkable in practice.”

Julie Taylor, senior associate in the employment team at Gardner Leader law firm says:

“We already have employees, workers and self-employed contractors as distinct ways of working and a key recommendation is clarifying the rights that apply to those who fall into the middle “worker” category and renaming them “dependent contractors”. This category would most likely catch those working for companies such as Deliveroo and Uber and ensure that they are entitled to sick pay and holiday pay.

“This recommendation reflects the suggestion from the previous report from the Work & Pensions Committee that those engaged on such terms should be workers by default, which would entitle them to holiday pay and is intended to recognise that the existing categories are out of touch with our current labour market.

“This proposal may well help to maintain the flexibility currently valued by so many, but this change to the categories could simply increase disputes and the additional costs will be a heavy burden for employers so even if implemented, this is unlikely to be a quick fix.”

Peter Cheese, Chief Executive of the CIPD, says:

“We have been calling for greater clarity over workers’ rights for a long time and therefore, welcome the main thrust of the recommendations to ensure fairer treatment for gig economy workers without losing the flexibility which we know many of them value. We also support the proposals to clarify people’s employment status and rights and back plans to require employers to provide details of terms and conditions of employment to workers as well as employees.

“While we welcome the proposals for a stronger test of supervisory relationships in order to ensure workers get the benefits they are entitled to, we need to ensure that the framework for enforcing this is practical, otherwise we risk discouraging employers from providing flexible roles and opportunities that many people benefit from.”

Sarah Peacock, an employment specialist at national law firm Blake Morgan, says:

“Far from clarifying the position, the new category of employment status of ‘a dependent contractor’ who has a number of, but presumably, different employment rights to a ‘worker’ could just complicate things for both parties.”

Liz Stevens, Professional Support Lawyer in the Employment Team at Birketts LLP says:

“Some of the proposals in the Review are actually pretty radical and go much further than simply the (frankly unnecessary) reclassification of workers as ‘dependent contractors’. Many of these proposals will, if implemented, have a significant impact for all employers, and not only those in the ‘gig economy’ who have been the focus of recent debate. For example, giving agency workers additional rights to request a direct contract of employment, and a new ‘right to return’ to work for employees on long term sickness absence (that one is certainly likely to alarm many employers!).”

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