Domonique McRae: Should employers accept joint liability for labour abuse within supply chains?

In July 2017, the Department for Business, Energy and Industrial Strategy (BEIS) published Good work: the Taylor review of modern working practices, an independent review of working practices. This report made a number of recommendations to attempt to address some of the issues currently facing the UK labour market.

One of its focuses is on the so-called gig economy and the uncertainty it can create in the respect of employment status, the eligibility to receive the national minimum wage, along with other basic employment rights. Among other matters, the Taylor Review suggests that the government could be responsible for the enforcement of the national minimum wage, that the onus to show employee status should be on the employer, and that there could be penalties on employers which fail to implement previous judgements in respect of employee status without good reason.

While the Taylor Review goes some way to exploring the difficulties faced by the labour market, some say it does not go far enough. For example, since the Taylor Review was published, David Metcalf, director of labour marker enforcement, has mooted the idea that big retailers and construction organisations ought to be fined for any labour exploitation found within their supply chains; even if they are not themselves involved.

Author of the review, Matthew Taylor, has therefore publicly admitted he could have gone further in his report, accepting that he could have considered whether larger organisations could be made jointly liable for unlawful practices among their contractors.

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The Modern Slavery Act already obliges businesses of a certain size to disclose the steps they have taken to eliminate slavery within supply chains but the suggestion to impose joint liability in circumstances where there has been exploitation of workers’ rights goes one step further. That being said, this kind of practice already exists in other jurisdictions (such as Australia and Belgium) so it may be a matter of time before it is introduced in the UK.

Domonique McRae is an employment law team solicitor at SA Law