The government has responded to last year’s Taylor Review on modern employment practices with a new plan called the ‘Good Work Plan’ that promises millions of flexible workers new rights.

The Good Work Plan sets out a series of major government reforms aimed to increase the rights and protections of workers, including those who work in the gig economy.

Among the measures include enforcing vulnerable workers’ holiday and sick pay for the first time. Also included is a list of day-one rights including holiday and sick pay entitlements and a new right to a payslip for all workers, including casual and zero-hour workers. Furthermore, the plans include a right for all workers, not just zero-hour and agency, to request a more stable contract.

“We recognise the world of work is changing and we have to make sure we have the right structures in place to reflect those changes, enhancing the UK’s position as one of the best places in the world to do business,” Prime Minister Theresa May said. “We are proud to have record levels of employment in this country but we must also ensure that workers’ rights are always upheld. Our response to this report will mean tangible progress towards that goal as we build an economy that works for everyone.”

The Government published four consultations following recommendations made in last year’s Independent Review of Employment Practices in the Modern Economy, which was led by Matthew Taylor. The consultations focus on Employment Status, Agency Workers, Enforcement and Increasing Transparency.

Among the key proposals included in the plan are a number that will affect temporary and contract workers:

• Providing all 1.2 million agency workers with a clear breakdown of who pays them and any costs or charges deducted from their wages
• A list of day-one rights including holiday and sick pay entitlements and a new right to a payslip for all workers, including casual and zero-hour workers
• Considering repealing laws allowing agencies to employ workers on cheaper rates (namely the Swedish Derogation)

Furthermore, the government will also introduce a new naming scheme for employers who fail to pay employment tribunal awards and plans to quadruple employment tribunal fines for employers showing malice, spite or gross oversight to £20,000 and are also considering increasing penalties for employers who have previously lost similar cases.

The Government also stated that changes to the rates of tax or National Insurance Contributions for either employees or the self-employed are not in scope.

Overall, the government has acted on all but one of Matthew Taylor’s 53 recommendations. It rejected his proposals to reduce the difference between the National Insurance contributions of employees and the self-employed following Budget 2016 and subsequently have no plans to revisit the issue.

Matthew Taylor called the government's response "substantive and comprehensive". He said: "It will make a difference to the lives of the most vulnerable workers and that is what matters. "I welcome the range of specific commitments to improve the protections and rights of workers and to enforce those rights more strongly.”

The consultation is due to close in the Spring.

John Nurthen, Executive Director Global Research for Staffing Industry Analysts said “Most people in the staffing industry will be pleased to see these changes and relieved that the government has not come up with too radical a solution to deal with unfair practices in the gig economy. At the same time, there’s an element of ‘window dressing’ to the announcement which mostly involves better enforcement and clarification of existing laws. The government still faces challenges in updating legislation to better recognise new ways of working and preventing exploitation of workers. These changes do not resolve the conundrum that Uber drivers are deemed to be workers and so entitled to holiday and sick pay, but Deliveroo riders are still classified as self-employed and ineligible.”

The Association of Professional Staffing Companies welcomed the plan.

“We at APSCo welcome this announcement and are very supportive of the Government’s desire for clarity – particularly on employment status and how this is aligned to tax status, workers’ rights and entitlements and the differentiation between employed, workers and self-employed,” Tania Bowers, General Counsel at APSCo, said.

Julia Kermode, chief executive of The Freelancer & Contractor Services Association, welcomed the proposed consultation on employment status. “We also welcome the proposal to provide agency workers with a clear breakdown of who pays them and any costs or charges deducted from their wages.”

“On the proposal to consider repealing laws that allow agency to employ staff on cheaper rates via the Swedish derogation rules, FCSA’s compliance code includes provision for Swedish derogation to be operated compliantly, however we recognise that there is potential for vulnerable workers to be exploited so we will monitor developments carefully,” Kermode said.

Kevin Green, Chief Executive of the Recruitment and Employment Confederation, also commented, “We still need more clarity on some of the points raised, including the definition of zero-hour contracts and if agency workers are included. We also need to know when exactly people are eligible to request a contract and if additional paperwork around this will mean more bureaucracy and therefore a greater burden. In addition, the government’s reform plans should not apply only to Swedish Derogation but instead should open up all parts of the Agency Workers Regulations for review.”

Umbrella, contractor accountancy and self-employment provider ADVANCE, also welcomed the report.

“We welcome the government’s proposals, which will help to combat unfair practices in the murkier parts of the gig economy and help to raise standards across the flexible workforce more generally,” Shaun Critchley, managing director at ADVANCE, said. “While the government clearly has the gig economy in its sights with most of these proposals, there are some salient points for the more traditional contractor-agency-provider supply chain.”

Meanwhile, the Trades Union Congress stated that the government's plan does not go far enough. “The proposals outlined today won’t stop that hire-and-fire culture of zero-hours contracts and sham self-employment,” France O’Grady, General Secretary of the TUC, said.