July 12, 2017
Yesterday, the much-awaited Taylor Review into modern working practices was finally published. And by modern working practices, the report focussed primarily on what has become known as the gig economy. People have been speculating about the contents of the report for months and things ramped up last week after a partial leak to the media. So, things were already bubbling under nicely before the actual publication of the document brought things to a boil yesterday. Assuming the government do more than kick the whole thing into the long grass, always a possibility, debate will continue for a while. We’ll let politicians do their thing with it, but here are a few of the initial reactions from interested parties and the experts.
Darren Newman – employment law expert
It’s easy to pick holes in any substantial piece of work – which is great news for people like me. There is, therefore, plenty in the Taylor Review ‘Good Work’ Report (as it now seems to be called) that I intend to spend much of the summer picking holes in and whinging about (I mean – ‘dependent contractors’ – honestly!).
There is also much in the report that will be of more interest to other people than to me. There are graphs. There is discussion of National Insurance Contributions. There is plenty of stuff about promoting and sharing good practice that I frankly skimmed through. I don’t dismiss these things – but other people can write about them.
What I wanted to see from the review was substantive proposals for actual amendments in employment law – and in all fairness there are plenty of them. Some are a bad idea and some would make very little difference to anyone. But some of the proposals are really progressive and should be welcomed.
Torsten Bell, Director, Resolution Foundation
It’s not just the pay squeeze that has put work on the front pages – it’s tech too, from robots to AI and most visibly the gig economy. Uber and Deliveroo don’t just deliver people to food or food to people, they have given people something to talk about over all that food. Are those driving the cars and peddling the bikes lucky recipients of flexibility or exploited low paid workers stripped of the minimum employment rights that workers should be entitled to?
But as well as seeing the picture on how the review came about, we also need to see the bigger picture on what it says. And to do that we need to step away from an Uber cab and into a supermarket, a hotel or perhaps even a care home.
Because while it’s good that tech has got everyone talking about work, in truth the really interesting parts of today’s Taylor Review are not about the gig economy. Yes there are ‘gig’ proposals, with welcome calls for more clarity from Parliament to less welcome proposals to treat gig economy workers differently when it comes to the minimum wage (even when the courts have found that they are in fact workers).
Peter Cheese, Chief Executive of the CIPD
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.”
The proposals to create new rights for agency workers to request contracts that guarantees hours which better reflect the actual hours worked are welcome. We also welcome the proposal to allow zero-hours workers to be able to request minimum hours if they have been with the same employer for 12 months, which will maintain flexibility while ensuring that people can move onto contracts that might suit them better.”
However, the recommendation for a new higher NMW rate for non-guaranteed hours should be treated with caution. There is a risk that any changes do not result in a reduction of jobs or opportunities for the people that need it as employers react to concerns of the growing cost of labour. We also have reservations about the practicality of the proposal to introduce minimum piece work rates.”
Crucially, Taylor stresses that the best way to improve the quality of work is through effective corporate governance, good management and strong employment relations within organisations and flags the need to boost productivity and job quality through working more closely with low pay employers and sectors. It is vital the Government develops these ideas as part of industrial strategy to ensure that the Taylor Review has lasting impact on work quality in the UK.
Frances O’Grady, TUC
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.
In an age of robots, ride-hailing apps and artificial intelligence, it is quaintly paradoxical that the new face of humanity at work belongs to the sweaty twenty-something weaving through traffic on a bicycle with a plastic box of takeaway food on his back. Technology is transforming work in unexpected and unsettling ways. One result is the review of employment practices published yesterday by Matthew Taylor, a former adviser to Tony Blair. It was prompted by fears that the software gurus of the so-called gig economy might be turning a generation of millennials into an economic underclass, dependent on sporadic work and unable to plan, save or progress.
The report’s principal strength is that it does not fall for this caricature. There is no doubt that unscrupulous employers in certain sectors, notably hospitality, abuse zero-hours contracts to create what Mr Taylor calls one-sided flexibility: the flexibility is all to the employer’s advantage. Nor is there much question that some fast expanding gig employment “platforms”, Uber chief among them, could do more for those who use them as a source of work without protection or benefits. But zero-hours contracts suit more employees than they harm. Gig employment apps have wrought a quiet revolution in the world of work because people are flocking to provide their services, not just to buy them.
This is a revolution that no one should be seeking to reverse.
Julian Sansum, employment partner at PwC
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. The new dependent worker category will bring significant costs for gig platforms in particular, but employers which adopt Taylor’s recommendations quickly are likely to see first mover advantage and reputational benefits.
Zero hours contracts have been stigmatised but it’s positive Taylor recognises they have a place in the UK’s flexible job market, if protections are increased and employees are given the right to request fixed hours. Our research shows that 73% of workers would request fixed hours from their employer if they were on a zero hours contract.
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.
It’s not just businesses engaging people in the gig economy that need to consider the changes this report brings. Any employer which requires a degree of flexibility within its workforce cannot ignore the recommendations.
Professor Chris Rowley, Professor Emeritus of Human Resource Management, Cass Business School
This review has happened not to ‘celebrate’ this development in the working world, but only because there was a perceived problem. And it is only ‘new’ due to the use of online platforms and apps and certainly not ‘new’ in the Dickensian exploitative working conditions that have ensued.
This is because such firms have utilised the grey area between fully employed and self-employed. The traditional ‘self-employed’ worked for themselves and had the real flexibility of working for various clients of their choice and time. This new army of so-called self-employed are engaged in insecure work, unable to turn down work and often tied to one firm – and one that is for all intents and purposes an ‘employer’ which wants to control them – but simply avoid any of the costs of employment.
Such firms seek the maximum numerical flexibility of zero hour contracts as well as avoiding tax – NI contributions – or benefits such as sick pay, holiday entitlement and pension provisions. As such firms clearly do not think they should pay for such things or be responsible for them, who do they think should be? Also, this is a retrograde development in that such benefits are what people have come to expect in a civilised society, let a developed economy and one that aims to invest in the long-term with skills to upgrade and add value and compete in a post-Brexit world rather than engage in a futile ‘race to the bottom’ in the employment of our fellow workers.
What does this say about the short-term perspectives and ethical behaviour of such firms and their highly-remunerated executives?”
Jeanette Makings, Head of Financial Education at Close Brothers
We are seeing more and more changes to the UK Labour market in the last few years with longer working careers, the emergence of the gig economy, as well as the increasing prevalence of self-employed, flexible, part-time and remote working to name a few. But these all provide a challenge to employers who want to provide the right support to their workers, but who may find it difficult given the different working statuses and financial circumstances. Some workers, for example self-employed workers, may need additional support and guidance to navigate what financial choices are available to them in the workplace and how to plan and make good decisions as they plan their financial futures.
Companies have a responsibility to make sure that their workers have the right level of financial education, whatever their station or circumstances. While the Taylor review has some interesting suggestions such as those around portable benefits, tech, and default auto-enrolment, there still seems to be some way to go when it comes to helping these newly labelled ‘dependent contractors’ to plan for their financial future and save for retirement.
Mark Littlewood, Director General at the Institute of Economic Affairs
Taylor’s recommendations are likely to achieve little to reduce in-work poverty while increasing costs, which will be passed on to consumers in higher prices for taxi rides and home deliveries, and to workers in terms of reduced net pay and fewer, and less varied, employment opportunities. The gig economy empowers consumers over businesses, and these new recommendations could overturn this balance.
The new gig economy has blurred the old regulatory distinction between employment and self-employment. Politicians and their paid advisers have naturally concluded that we therefore need yet more regulation. Sooner or later another innovation will come along to allow the sellers and buyers of labour to escape these new regulations. And then yet more regulation will be called for. Rather than playing this economically costly and ultimately futile game of cat and mouse, politicians should use the emerging gig economy as an opportunity to liberalise labour law.
It’s also important to note that there are relatively few full-time workers with families to support who are making a precarious living on either zero-hours contracts or as self-employed contractors for Uber, Deliveroo and other platforms. Those that are would be best assisted by in-work benefits rather than through altering employment contracts across the board.