The HR Dept has been calling for a long time for a simplification of employment status, to protect rights and ensure that business owners do not fall foul of legislation due to ignorance, confusion or bad business advice, giving evidence to a Parliamentary Select Committee last year.

Like many, we have witnessed the blatant circumnavigation of proper payment and treatment of people, as new technologies and platforms enter the market.

So we are pleased that, at long last, the UK Government has responded to the Matthew Taylor Review into modern working practices, which was presented in July, with a new approach.

What does the government’s Good Work plan include?

The Good Work plan says it will go further than the Taylor Review, but it doesn’t give any timeframe as to when this will happen, or how. The reforms include:

• Enforcing vulnerable workers’ holiday and sick pay for the first time

• Holiday and sick pay for all workers, including casual and zero-hours from their first day

• A right for flexible workers to request a more stable contract

The plan suggests that tribunal awards against bad bosses could be quadrupled up to £20,000, with an increase in penalties for companies who have lost similar cases as well as a ‘name and shame’ register for those who don’t pay their tribunal awards.

Unpaid internships could be scrutinised, with the government looking to take action to ensure unpaid interns aren’t doing the job of a worker. It has also proposed further consultation on how to tackle the sham self-employed, who could be workers but are being exploited to avoid paying the minimum wage or affording them workers’ rights.

When all this will happen is anyone’s guess. The ‘reforms’ have set up four more consultations, and the timescales for these haven’t been announced.

Having clear guidelines to define if someone is an employee, a worker or genuinely self-employed is urgently needed.

Speaking at The HR Dept conference in November, Matthew Taylor, the author of the Taylor Review of which the Good Work plan is based, said: “Small businesses don’t find themselves at a tribunal because they’re evil people. They get there because they don’t understand the law, and that’s where HR experts can best help them.”

What does this really mean?

Not a lot – until the results of future, as yet unscheduled, consultations and any legislation from these come into force.

The Good Work plan will, however, provide 1.2m agency workers with a clear breakdown of pay and any costs or charges deducted from their wages, as well as consideration of repealing laws that allow agencies to employ workers on cheaper rates.

The Low Pay Commission has also been asked to consider the impact of higher minimum wage rates on flexible workers, but it is unclear when or if any change to wage rates would be implemented.

How are people responding to the Good Work plan?

The government are touting it as a huge reform of employment and that millions will benefit from enhanced rights and better working conditions.

Critics say it doesn’t go far enough and that the Good Work plan claims a lot, but doesn’t have much substance to it about when and how things will change.

No meaningful action has been taken

What is needed is a greater clarity on employment status, as well as better education and communication for smaller businesses to help them avoid falling foul of the law.

Sham self-employment continues to hurt workers and urgent action by government is needed, not more consultations. Most recently a so-called ‘self-employed’ DPD delivery driver died after skipping numerous medical appointments because he had previously been fined for visiting a GP. They work the same routes, used branded vans and take all the risk – but they have to calculate and pay their own tax and have no rights to sick and holiday pay.

The Good Work plan offers no real action or clarity; meanwhile, zero-hour workers continue to be exploited, and are unable to get mortgages or rented accommodation.

The recommendations sound good on the surface but are meaningless until challenged at an employment tribunal. The right for flexible workers to request a more structured contract is a good start, but further guidelines or clarifications about how this would work in practice are crucial for SME employers.

The principles for fairer working are laudable, but until we see action, these are just aspirations.

SMEs: A missing issue – and a pressing one – remains to be tackled

The lack of clarity over employment status extends to those advising businesses. Business advisers, accountants and bank managers often do not understand worker and self-employed status. They either misinform or make checks with HMRC – and, of course, tax and employment law is misaligned.

The SME sector needs education and support to combat what is widespread unawareness, rather than malintent. This most recent government response still makes no mention of this issue, which we believe remains one of the most important factors in the lack of understanding among the SME community about the vagaries of the current employment status system.