No doubt the HR blogosphere will be all a-twitter this week with the recommendations of Matthew Taylor’s long-awaited report, commissioned under the Cameron government. I thought I’d share my perspective not as a legal expert or as a strategic leader, but as a common-or-garden HR Manager just trying to get through the day without punching someone.
There are two points that have caught most people’s attention and these are what interest me. First, the idea of “dependent contractors”.
Some months ago, some of Matthew’s thoughts were shared publicly (i.e leaked), including the idea that there needed to be a new category of employment, between self-employed and worker. I was very sympathetic to this idea, working in the ludicrously under-funded field of social care. Any option that would allow us to save on costs was up my street. The idea, of course, arose from the gig economy platforms like Uber and Deliveroo amongst other, less prominent, enterprises. Self-employed people are responsible for their own National Insurance contributions, income tax and pensions. They aren’t entitled to holiday pay and the employer isn’t responsible for their sick pay, maternity or paternity pay. They aren’t entitled to the National Minimum Wage in any of its forms.
It’s hard not to see the appeal of such freedoms to an organization able to quantify its workers as self-employed and so, inevitably, as the economy bites harder, more and more businesses have been re-classifying people as “self-employed”, paying the individual a larger amount of money whilst saving the company itself a packet of cash and liability.
But, as a seemingly endless trail of high-profile tribunal decisions are showing, it is far too tempting to employers to categorize workers as self-employed contractors for cost and tax reasons whilst, for all intents and purposes, treating them as employees. I’ll not dig into the weeds of how this happens, suffice to say that it usually looks like a more or less equal blend of intent and incompetence.
So Matthew’s proposal for a middle ground employment relationship looked like good sense, but the final form of the dependent contractor is now revealed.
Well, it’s hard to pretend that my prayers (or even my questions) have been answered by the proposal, which is somewhat lacking in detail and, to the casual examination of the frontline operator, hard to really distinguish from the current situation of the zero-hours worker. The DC gains an entitlement to holiday and sick pay and to an expectation of earning the minimum wage. From the context, it looks like, rather than bridging the gap between “self-employed” and “worker”, Matthew is rather trying to define a new category of worker.
I have no problem with this. The legal definition of a “worker” who isn’t an employee is extremely vague and has caused employers and tribunals headaches for years. But it doesn’t seem to me that it’s really meeting the gig economy halfway, in which self-employed contractors need a higher level of protection, and this is what we thought we were going to see. Rather, it seems to be skipping over the challenge for gig employers to completely eliminate the option of treating their delivery force as anything other than workers with the rights and obligations that entails.
In other words, Matthew is proposing – because his review is a long way from being law, just yet – that I be given a new type of ammunition, but he isn’t giving me the new gun I was asking for.
However, it’s not all gloom – not from my perspective, anyway. Because the Taylor Report also contains some solid recommendations about zero-hours workers. These are clearly differentiated from CDs, although no new terminology is suggested to cover them. But one thing Matthew does throw out there is the idea that ZHWs should have an automatic legal right to request regular hours. I’m particularly pleased to see this in the report for two reasons: first, because I came across the idea for the first time in a paper put forward by Age UK; and second, because we (that is, Age UK Gloucestershire) instituted such a clause in zero hours contracts way back in October 2016 and it’s been a game-changer.
The thing is, this clause works for both employees and employers. For employees, it means that if what you really want is regular contracted employment then, as long as you meet the minimum criteria that mean you are already working regular hours, you can ask for a full contract of employment. You gain a whole wad of rights but… you also give up the freedom that “no mutuality of obligation” (NoMo) gives you. Meanwhile, for employers it allows you to use ZHWs more flexibly, covering regular shifts or clients with far less risk that the worker has accidentally “slipped” into the status of employee. This is because the worker has a legally-compliant pathway into employee status open to him or her so, if he or she doesn’t take it, it can be more fairly assumed that this was a matter of personal choice.
It’s not, of course, a get-out-of-jail-free card. Unreasonably refusing requests for regular hours, or failing to ensure that workers are properly informed of their options and opportunities may still lead an employer foul of claims of unfair dismissal or similar. But it offers a very welcome clarity and a better guarantee that zero-hours work is either legitimately casual or that the worker’s NoMo status is a matter of choice rather than necessarity.
So from my perspective, looking up, my response to Matthew Taylor is a mildly disappointed shrug. This doesn’t feel like the potential work of transformation we were hoping for. However, it is also worth digging through the rest of the report for the less sensational points. He tackles a lot of statistical myths about the world of work, the gap between high and low earners and the overall picture of the quality (versus the quantity) of work in the UK market.
I sense there are blogs a-plenty for those with the brains to unpick it all in detail. Not here, though. This was enough for me. Back to normal, next time.