All work in the UK’s economy should be “fair and decent”, a long-awaited government review of employment practices has said today.
The Taylor Review on Modern Employment Practices has been cautiously welcomed by HR experts as the author, Matthew Taylor, said “fairness demands” that people, particularly those on lower incomes, had routes to progress in work.
The 115-page report tackles among other things ‘gig economy’ employment and zero hour contracts, and notably recommends that ‘firms which control and supervise their workers’ should pay ‘a range of benefits, including National Insurance.’ The report also tackled access to justice, questioning Tribunal Fees. Flexible working practices were also discussed. Mr. Taylor said:
“Of all the issues that were raised with us as we went around the country, the one that came through most strongly was what the report calls one-sided flexibility.
“One-sided flexibility is where employers seek to transfer all risk onto the shoulder of workers in ways that make people more insecure and makes their lives harder to manage. It’s the people told to be ready for work or travelling to work, only to be told none is available.”
Mr Taylor’s report recommends a new category of worker called a “dependent contractor”, who should be given extra protection.
Prime Minister Theresa May said the government would be looking at the report’s recommendations seriously.
Reactions from the HR World are shared below:
Peter Cheese, Chief Executive of the CIPD, the professional body for HR and people development, said:
“The Taylor Review has the potential to change how we look at the future of work, which is about quality of work and not simply quantity. Translating the ambition into practice has an added importance given some of the additional challenges we face in the UK, from access to skills to labour market regulation post Brexit.
“We have been calling for greater clarity over workers’ rights for a long time, and therefore welcome the main thrust of the recommendations to ensure fairer treatment for gig economy workers without losing the flexibility which we know many of them value. We also support the proposals to clarify people’s employment status and rights and back plans to require employers to provide details of terms and conditions of employment to workers as well as employees.
“While we welcome the proposals for a stronger test of supervisory relationships in order to ensure workers get the benefits they are entitled to, we need to ensure that the framework for enforcing this is practical, otherwise we risk discouraging employers from providing flexible roles and opportunities that many people benefit from.”
“However, changing regulation is not the silver bullet that will fix the problems with the world of work. Businesses need to take greater responsibility for the quality of work, opportunities for progression, and fair treatment of all their workers. The review rightly highlights the need for wider changes to boost the number of people in better paid, better quality work, such as enhancing the enforcement of existing standards, improving the quality of careers advice and guidance, boosting life-long learning and making the apprenticeship levy more flexible. We welcome plans to strengthen labour market oversight, including greater transparency and reporting, as well as a bigger role for the Low Pay Commission and joint working and co-ordination between institutions.”
Julian Sansum, employment partner at PwC, said:
“The Taylor Review could prove seminal for working practice and trends. While legislation may take time, the review sets a clear direction of travel that policy makers cannot ignore.
“Increasing the protection for workers should be a win win. Our research shows that 41% of people would be more likely to take up gig work if employment rights improved, which would open up different employment options to more people, while businesses should benefit from greater certainty around labour supply and be more attractive to staff, in what could be an increasingly competitive market.
“Of great interest are the proposals to apply a 20% premium rate to the national minimum wage for workers carrying out piece rate work. This is based on the principles already established for piece rate workers where it is not possible to determine the number of hours worked for output work, for example people who fill envelopes from home. In practice, this is an area that would require detailed consultation as it adds a layer of complexity which may be difficult to put into practice in an efficient manner.”
“The UK’s entrepreneurial community and culture is a key strength and partly why the growth of our sharing economy has outpaced the rest of Europe. Striking the right balance between fostering greater productivity and employment options, with increased workers rights will be even more important as the UK looks to its future.”
Beverley Sunderland, Managing Director at Crossland Employment Solicitors, said
“The recommendations are overall a significant step in the right direction in addressing the fast changing landscape of the modern labour market, while trying to find a balance between business and workers’ needs. However, creating a third type of employment category is likely to mean further litigation over exactly who qualifies as a dependent contractor and what the difference is between that and a worker.
“Employers should now review their working arrangements with self-employed ‘independent contractors’ against the new proposed definition for ‘dependent workers’ to see if they fall within this new category of employment status. As and when legislation is passed to enact these changes, employers should issue new contracts to reflect this.
“Any employers who rely heavily on the use of zero-hours contracts will also need to review their requirements and consider offering these workers the opportunity to move to fixed hours.”
Emma O’Leary, employment law consultant for the ELAS Group, said:
“Currently this is a review only so no laws will change in the very near future. The Government has said they will look at the recommendations in the report seriously but implementing changes will require an overhaul of employment law in many areas, including Employment Tribunals. Currently if employment status is disputed between parties, it is left to an Employment Tribunal to determine at a hearing. Mr Taylor’s review suggests that a Claimant should not have to pay Tribunal fees in order to have their status determined.
“The review recommends a right to request set hours but recognises that a flexible labour market is essential. Whilst it’s necessary to ensure workers are not exploited, it’s true that many people need and desire flexibility and the right to turn down work.
“Employment status has long been a grey area and this review seeks to offer some clarity on the issue. The purpose of the report seems to want to marry the idea of flexibility and security which cannot be a bad thing.”
Peninsula Employment Law and HR Director, Alan Price, said:
“With regards to employment status and the ‘gig economy’, Taylor suggests that the government has to make legislation clearer and increase clarity so the basic principles can be understood by all. The three existing statuses – employee, worker and self-employed – should be retained with a new name of “dependent contractor” covering workers who are controlled and supervised by the business. Under this label, workers will receive worker employment rights, including holiday pay and rights to rest breaks, and businesses should class these workers as employed for tax purposes. From 2014-2016 Peninsula experienced an 63% increase in advice requests regarding employment status from small business owners looking for direction on the employment status of their workforce.
“The request for clarity and making legislation clearer is a must and the government should heed this call to ensure the determination of status, and the application of employment rights, can be carried out by businesses correctly without the need for a tribunal to determine this. From 2014-2016 Peninsula experienced an 152% increase in advice requests regarding national minimum wage from small business owners seeking guidance on upcoming changes to legislation and clarification on grey areas around the rights of external workers.
“For many employers, the introduction of a new name for those who have worker status will not be helpful as it appears to introduce another status at a time when many are struggling to apply the tests on a practical basis. Additionally, introducing another level of the National Minimum Wage for those on non-guaranteed contracts will increase complexity of minimum wages at a time when non-compliance is high due to a lack of understanding about the current rules.”
Samantha Hurley, Director of Operations at APSCo, said:
“APSCo welcomes the concept of ‘good work for all’ and the Prime Minister’s support for enterprising small businesses.”
“APSCo broadly supports the proposal to classify workers as ‘dependent contractors’, who are not employees, but are eligible for workers’ rights such as sick pay, holiday pay, minimum wage, and a new right to request fixed hours, with a free pre-employment tribunal process. In terms of protecting vulnerable workers, this is a sensible suggestion.”
“We further welcome the fact that this report offers a clear differentiation between this group of workers and independent contractors who willingly choose to exchange traditional job security for flexibility and control.”
“Our one disappointment is that this report focuses heavily on the lower-skilled, lower-paid end of the spectrum, rather than looking at modern employment practices more holistically – with no explicit recommendations around protecting our economy which is driven by high-skilled, well-paid contractors.”
“While the lion’s share of media attention has focused on the gig economy, characterised by a perceived lack of job security, employment rights as well as the tax advantages of self-employment, the experience of workers in professional sectors such as IT, banking, finance, engineering and life sciences is very different – and we must not forget that the strength of UK plc lies in the flexibility of its workforce.”
TUC General Secretary Frances O’Grady said:
“It’s no secret that we wanted this review to be bolder. This is not the game-changer needed to end insecurity at work.
“A ‘right to request’ guaranteed hours is no right at all for many workers trapped on zero-hours contracts. And workers deserve the minimum wage for every minute they work, not just the time employers choose to pay them for.
“But Matthew Taylor is right to call for equal pay for agency staff and sick leave for low-paid workers — something which unions have long campaigned for. The government should move swiftly to implement these recommendations.
“Theresa May cannot use this report as shield to hide from her responsibilities. We need a proper crackdown on bad bosses who treat their staff like disposable labour. And an end to employment tribunal fees that price workers out of justice.”