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Newly Published Taylor Review Scrutinises Working Practices in the Modern Economy

Posted on July 13th 2017

A government review of employment practices has found that all work in the UK’s economy should be “fair and decent.”

Published on the 11th July 2017, the review demands clearer legislation on employment status. The report heavily focuses upon companies like Uber and Deliveroo. Uber’s ‘gig economy’ employment practices previously came under scrutiny last year, when a tribunal ruled that Uber drivers are ‘workers’ entitled to minimum wage and sick pay.

Theresa May commented on the government review saying that it was important to have a “flexible” approach that did not “exploit” workers. She also made assurances that the government would take the review seriously.

Why was the review commissioned?

The need for this review appears to have stemmed from a generally negative perception of what has been coined the ‘gig economy.’ This term, according to one definition, is “a labour market characterised by the prevalence of short term contracts or freelance work, as opposed to permanent jobs.”

Mr Taylor, the author of the review, said that a growing number of people believe that the gig economy is placing excessive power in the hands of employers.

“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 a one-sided flexibility.”

Simply put, ‘one side flexibility’ is where employers transfer risk onto their employees. This makes employees feel insecure in addition to making their lives harder to manage. Although the review did not attack the ‘gig economy’, it did stress the importance of flexibility. This statement was promptly echoed by Theresa May.

What does the review recommend?

Matthew Taylor, former aide to Tony Blair and chief executive of the Royal Society of the Arts, has made seven key recommendations.

  • Firstly, good work should be provided for all

A national strategy is suggested to achieve this objective. ‘Good work’ is defined as a combination of several factors such as; wages, employment quality, working conditions etc. and more. It also includes basic protection and suitable routes of progression at work.

  •    Dependent contractors

Mr Taylor recommends that workers for platform based companies such as Deliveroo and Uber should be classed as dependent contractors. He suggests that there should be a clear distinction between them and those who are legitimately self-employed.

  •     The National Living Wage

It is recommended that, whilst the National Living Wage is an important tool, there must be measures in place to make sure nobody is stuck at this rate of pay. There should be a sentiment of progression among workers.

  •     Cost of employment

The review suggests that the government should, where possible, avoid increasing the employment wedge (non-wage costs of employing a person).

  •    Good corporate governance

This recommendation places the responsibility for good management with the individual companies. It is suggested that the government need not regulate nationally in order to provide good work.

  •    Developing skills

Mr Taylor recommends that everyone should feel they can realistically strengthen their work prospects. He also suggests that developing skills should not be limited to ‘on the job’ activities.

  •   A healthy workplace

The review suggests that a more proactive approach to workplace health is needed in the UK.

What could be the implications of the review?

A real difference could be made to thousands of people if the provisions of the review are implemented.

However, the review doesn’t go the full length in clarifying the most pressing issue – What can self-employment be defined as?

Granted, Taylor does make limited progress in resolving this matter (he calls for clearer legislation) but the review falls short of a statutory definition of self-employment. Unfortunately, self-employment is currently, at best, a grey area assigned to those who are neither employers nor workers. In order to fully clarify the status of the self-employed, and be able to make that clear to the courts, a category clearer than a grey area is evidently a better option.

Besides this concern, Theresa May’s commitment to implementing the review is also a factor that could threaten its otherwise success. Her rhetoric, whilst encouraging, perhaps strategically lacked a proper commitment.

By Ruhi Kaur

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