In February 2018 the government published its long-awaited response to the Taylor Review of Modern Working Practices, aptly named ‘Good Work’. The Review of Modern Employment Practices was published in July 2017 and outlined 53 recommendations.
One of the main objectives that the government outlined within this publication, is their commitment to ensuring that all UK citizens benefit from the labour market, with a specific focus on guaranteeing that new ways of working (i.e. flexible employment) are effectively monitored, and employees working in these situations are protected. Below we outline the government response that will directly impact the contracting and recruitment industry.
Government response on contracting work
A consultation was proposed within the report on how legislation could potentially improve clarity when determining a worker’s status (i.e. employee, worker, self-employed). It has been stressed, however, that the consultation will also need to explore potential ramifications of any changes that could hinder ‘genuine flexibility’, as well as safeguarding against less scrupulous employers taking advantage of a new system. Ultimately, this consultation aims to ensure that the status of all workers is defined accurately and that they receive the benefits that they are entitled to as a result (e.g. sick/ holiday pay).
The report goes on to discuss potential further policing of umbrella companies to ensure compliance in every aspect of their work. This proposal is something we here at Exchequer Solutions readily encourage, as we believe there is a very small minority of businesses claiming to be umbrella companies, that are not operating with contractors in mind, and thus they should most certainly be subject to further ‘policing’.
Poor employment practices
The issue of poor employment practices that the Taylor Review and government response explored was once again brought to the forefront during a recent court case. The case involved two contractors, both of whom had agreed to the contract at a certain hourly rate but later found that their actual take home pay was just a third of that promised.
The fault in this case appears to be both the agency and umbrella company that were paying the contractors, the agency in question has since ceased trading. An invoice finance company also came under fire during this case but were quick to pass blame across to the umbrella company and agency. More details on this case can be read here.
Working with a compliant umbrella company
This case once again highlights the necessity of working with a reputable umbrella company. Here at Exchequer, our strong focus on compliance and customer service means that we put our contractors and the agencies we work with first. At the outset we ensure that all contractors are fully aware of all details of their contract with Exchequer, and we have had some amazing feedback from contractors throughout our years in business.
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