What about the dependent contractors?

There is much to mull over in the Taylor ‘Good Work’ Review. It proposes some significant changes to employment law that deserve serious consideration. I set out a whole list of them here. But a lot of attention is being paid to a change that, in itself, will have only a cosmetic effect – relabelling workers as ‘dependent contractors’

Here is way the Review puts it on page 35:

Government should retain the current three-tier approach to employment status as it remains relevant in the modern labour market, but rename as ‘dependent contractors’ the category of people who are eligible for worker rights but who are not employees.

There are also proposals for redefining the scope of employees and workers – but I’ll deal with those future posts. Here I just want to concentrate on their change of name and why I think its a bad idea.

First of all let’s be clear that this is not a ‘new’ status. We are not talking about a new category of person previously excluded from employment law who will now gain some new set of rights. This is just about what to call that group of people who are not employed under a contract of employment but who nevertheless qualify for rights such as the National Minimum Wage, or rest breaks and annual leave under the  Working Time Regulations.

I don’t see anything wrong with the word ‘worker’. I certainly don’t see that ‘dependent contractor’ is any better. But my objection is more practical than that. If this change is made, what will that do to the drafting of employment law?

Here’s the problem. Look at the definition of a worker in the Working Time Regulations.

“worker” means an individual who has entered into or works under (or, where the employment has ceased, worked under)—

(a) a contract of employment; or

(b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual;

and any reference to a worker’s contract shall be construed accordingly

You can see that the term worker covers both employees and people employed under ‘any other contract’ under which they are personally obliged to perform work. The word ‘worker’ does not just apply to those other contracts, it applies to employees too. There is actually no name for the people in the ‘other’ category. They tend to be referred to in the case law as ‘limb (b) workers’.

So here is where the Taylor report goes wrong. it says that it wants to rename those ‘limb b workers’ as dependent contractors, but the legislation doesn’t give them a name at all. Whenever the word ‘worker’ is used, it refers to both employees and this wider (unnamed) category. I’ve picked the example of the Working Time Regulations but the same issue arises under the Employment Rights Act 1996, the National Minimum Wage Act 1998, the Trade Union and Labour Relations (Consolidation) Act 1992 and others.

To introduce the concept of ‘dependent contractor’ – which will not, the Report says, include employees – you would need to have two separate definitions: e.g.

’employee’ means an individual who has entered into or works under a contract of employment

‘dependent contractor’ means an individual who works under a contract…whereby the individual undertakes to do or perform work personally…

Then – whenever a right is set out, you would need to amend what the law says about who qualifies for it. Look at Regulation 11 of the Working Time Regulations:

Weekly rest period

11.—(1) Subject to paragraph (2), an adult worker is entitled to an uninterrupted rest period of not less than 24 hours in each seven-day period…

If we drop the term worker and replace it with ‘dependent contractor’ Regulation 11 would have to look like this

Weekly rest period

11.—(1) Subject to paragraph (2), an adult employee or dependent contractor is entitled to an uninterrupted rest period of not less than 24 hours in each seven-day period…

Basically, every time the current legislation refers to a worker, we would have to change the wording to say ‘an employee or a dependent contractor’. Some poor soul in the Department for Business will have to go through the whole statute book looking at each time the word worker is used and decide whether it needs to be replaced. Perhaps you could come up with some sort of ‘find and replace’ amendment – but why would you bother? What on earth would be the point?

Fundamentally,  why would the world be a better place if the definition of a trade union (section 1 of the 1992 Act) was an organisation:

(a) which consists wholly or mainly of employees and dependent contractors of one or more descriptions and whose principal purposes include the regulation of relations between employees and dependent contractors of that description or those descriptions and employers …

I think this is a rather silly idea that has already had far to much attention.

Let’s never speak of it again.

 

About Darren Newman

Employment law consultant, trainer, writer and anorak
This entry was posted in Employment status, Taylor Report, Uncategorized. Bookmark the permalink.

11 Responses to What about the dependent contractors?

  1. And there was an employment lawyer on the panel.

    • And to be fair, you can tell that from some of the more detailed (and worthwhile) employment law proposals scattered through the report. I just don’t buy the stuff on employment status.

  2. Oliver says:

    Although, like you, I’m not entirely sure what the point of this is, I think there is an easier way to make the amendment. Couldn’t you just change limb b to say:

    (b) a ‘Dependant Worker’

    Then you add another definition for ‘Dependant Worker’, which is the current text of limb b.

    All the legislation would work with no further amendments.

    • Hi Oliver, Thanks for commenting. Your suggestion would certainly be easier, but it would leave the overall definition of ‘worker’ in place. The legislation would still refer to ‘workers’ and we will just have added the term ‘dependent contractor’. I suppose that wouldn’t do any harm – but its not what the Taylor Review is proposing

      • Oliver says:

        I haven’t read it all so perhaps its explained elsewhere but the part you excerpted seems to say something different. The proposal above is to:

        “rename as ‘dependent contractors’ the category of people who are eligible for worker rights but who are not employees.”

        That wouldn’t seem to me to fit with your suggestion which is removing workers and replacing it with employees + dependant contractors.

        I read it that they are simply proposing to rename limb b workers as dependant contractors.

  3. But Lim b workers aren’t named anything. The legislation has one definition of worker and then uses the term worker throughout to refer to both employees and limb b workers – if they weren’t even going to change that, then the change would be even more pointless.

    • Oliver says:

      I don’t disagree with you about it being legally pointless, but that was my take on it.

      They were proposing to give a formal title to limb b workers because, as you point out, they don’t really have a name at the moment.

      The commenter below provides some good arguments about the value of this change in promoting better understanding of the differing types of employment.

  4. MarkTarran says:

    I tried to leave a comment earlier but it seems to have been lost in the system. The conversation has now moved on a bit.
    But I essentially agree with the idea that “limb b” workers should be given a proper name (e.g. dependent contractor). The legislative kerfuffle that you suggest might ensue ought to be dealt with by defining dependent contractor as what is now a limb b worker, and then redefining worker as a category that includes (a) employees and (b) a dependent contractors.
    I also agree that this change is purely cosmetic, but this doesn’t mean it’s worthless (although I do think it’s had far too much attention in the press and it would be a mistake to see this as the Taylor Report’s flagship proposal).
    The problem with limb b workers is that unless you’re an employment lawyer it’s impossible to really believe they exist. They are defined almost entirely by what they are not. They are neither an employee nor an independent contractor (i.e. someone who is “in business on their own account”), but are somewhere in between. They are lost down a semantic crevasse. How can something that doesn’t even have a name play such an important part in our economy or be worthy of protection by the law? It’s no good saying they are all “workers” because workers also includes employees and these are by definition “not employees”, they are merely a residual category, an afterthought, an et al. Their lack of a name belies their importance.
    It’s easy to reason as lawyers that appearances don’t matter, it’s substance that counts. But in marketing an idea the opposite is true.
    In essence limb b workers need rebranding in order to be taken seriously in the public consciousness, and in the mind of employers, and in public discourse.

    • And this I think is what a lot of Taylor is about. One can adopt the business school truism to the effect that culture trumps law a great deal of the time. Now, law shifts culture (the equalities legislation being the paradigm example) but when the TUC and others criticize Taylor for being toothless I don’t think they’re being quite fair. What he is suggesting may be more profound than that. Law has its place in moving us away from a simplistic (and indeed wrong) crudely capitalist perception of the labour market but more general and profound shifts in attitude will improve everyone’s lot a good deal more quickly and efficiently than mere legislation.

    • Rick says:

      I’m with you on this Mark. Giving something a name makes it a Thing (as they say in the West Wing). Look at what happened to Zero Hours Contracts when we named them. Suddenly lots of people realised they were on them.

  5. Gavin Mansfield says:

    I agree with Mark Tarran’s point. Also I have a problem with the use of everyday words to mean something technical and different to the word’s everyday use. If you stop someone while they are working and ask them if they are a worker I doubt that they will be thinking of the statutory definition. A proper label both gives prominence to the concept, as Mark suggests, and serves as a reminder that we are using a term of art, not a loose word. (I have the same problem with “trust and confidence” but that is for another day!)

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s