JILPT Research Report No.224
Development of Contemporary British Labor Law Policy

March 31, 2023

Summary

Research Objective

The main objective of this research is to present how the current labor and employment policy in the United Kingdom today has developed, focusing mainly on the Taylor Review and the Good Work Plan, which are the source of the current labor law policy of the British government. This research also outlines the counterpart policy documents, A Manifesto for Labour Law, and Rolling out the Manifesto for Labour Law to the above two documents, and introduces specifics of related policy documents (the Work and Pensions Committee's report Self-employment and the Gig Economy, the Work and Pensions and Business, Energy and Industrial Strategy Committees' report―A Framework for Modern Employment, and Industrial Strategy). It discusses those proposals and reviews the reactions by labor law researchers.

Research Method

Literature review and working group meetings

Key Findings

This study deals with a wide range of issues in British labour and employment law. Among these issues, employment status can be mentioned as one of the most problematic issues also in Japan. In the United Kingdom, there is a three-tiered employment status framework for rights (three categories are employees, workers, and the self-employed, although employees are included in the category of workers) and the Taylor Review and the Good Work Plan somehow try to retain or postulate this approach. In contrast, the Manifesto for Labor Law and the Rolling out the Manifesto for Labor Law propose the concept of two-tiered employment status framework for rights with the sole exception of individuals in business on their own account. Depending on future political developments, there are a few possibility for the two-tiered employment status framework to be adopted.

These arguments in the UK remind us that the debate is about the fundamental question of how far the protection should be extended to and what type of workers should be protected by employment protection legislation. If anything, a drastic position arguing for a two-tiered employment status framework for rights seems to have some theoretical validity. In contrast, it is unknown to what extent two-tiered employment status framework can respond to various demands in current British society; the discussion on the applicability of the "single status" might be needed to be deepened again. It could be said that it is unclear what would be the optimal solution from various perspectives.

The government's July 2022 response document recognizes that "in the Good Work Plan (2018), the previous Government committed to legislate to improve the clarity of employment status tests, and to work towards alignment between rights and tax." However, the response document also noted that "benefits of creating a new framework for employment status are currently outweighed by the risk associated with legislative reform" and that such reform "might create cost and uncertainty for businesses" when companies are focusing on recovering from the coronavirus pandemic. Accordingly, it also indicated that no framework change would be undertaken.

Therefore, there will be no reform of the system on statutory employment status for the time being. However, if the proposals in the Manifesto for Labour Law or Rolling out the Manifesto for Labour Law could be implemented, which would be caused by a change of government, we must continue to monitor these developments closely.

Policy Implications

Discussions pertaining to legal policy in the United Kingdom can provide a variety of suggestions. In the broader debate, an argument in Japan, for issues related to statutory employment status, include the possibility of a three-tiered framework. On the other hand, there is an argument of adopting the two-tiered framework in the UK which adopts a three-tiered framework. This is suggestive for Japan. (It should be noted, however, that the three-tiered in the U.K. is a unique legal structure that arose from the unique circumstances of the UK.）

Contents

JILPT Research Report No.224, full text (PDF:1.9MB) [in Japanese]

Category

Labor laws/working rules, Employment/unemployment, Working conditions/work environment, Diversified working styles

Research Period

April 2021–March 2022

Researchers

TAKIHARA Hiromitsu

Researcher, The Japan Institute for Labour Policy and Training

Related Research

• Discussion Paper 21-05 "Current Developments in British Labor Law Policy: An Overview of the Taylor Review and the Specific Recommendations of the Report" (2021)
• Discussion Paper 20-02 "The Good Work Plan in British Labor Law Policy: Background to and Specifics of the Good Work Plan" (2020)

JILPT Research Report at a Glance

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• In English
• In Japanese