Government employment review outlines 7 steps to ensure “fair and decent work”
The Taylor Review recommends gig economy workers be classified as "dependent contractors" and calls for a move to more "cashless transactions"
A new government-backed report has outlined seven steps UK business owners need to take in order to ensure they are offering their employees “fair and decent work” – though has also suggested cash transactions could be a thing of the past.
The Taylor Review, a 115 page report into working practices in the modern UK economy, covers a range of employment issues currently affecting small businesses – with special emphasis placed on the ever increasing ‘gig economy’ and the future of cash-based transactions.
Centre to the report, is the idea that “one sided flexibility” exists in the relationship between businesses that operate in the gig economy and their workers, that gives too much power to the employer and not enough rights to the employee.
Last October, in a landmark ruling, the Employment Tribunal ruled that Uber drivers were not self-employed and as a result were entitled to an array of basic employment rights such as the right to be paid the national living wage, the right to join a company pension scheme and the right to statutory holiday pay and rest breaks.
According to statistics from the Royal Society of the Arts (RSA), UK businesses are currently utilising over 1.1 million gig economy workers, and despite assumptions to the contrary, most are not employed by tech startups.
28% of zero hour workers operate in the accounting and legal sector, 18% work as plumbers, builders and other forms of manual work, 17% work for cleaning companies – with just 7% doing the rounds with a delivery or courier service.
An important consideration for cash-based businesses, such as market traders, tradesmen and even freelancers, the report also recommends that cash payments should be gradually phased out.
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The report makes implications that increased digital payments and less physical exchanging of cash would help businesses comply with tax regulation better – with gardeners, window cleaners and child-minders signaled out as examples of those who may not be paying appropriate tax.
Referred to as the “hidden economy”, its claimed such casual tax avoidance cost the UK economy £6.2bn in 2013/14 – 18% of the total UK tax gap.
In the final sector of the Taylor Review, seven key recommendations were made for both government and businesses to adhere to in order to create “fair and decent work with realistic scope for development and fulfilment”.
The seven steps are:
1. That all employees should be given both a baseline of protection and an opportunity to progress – with the same basic principles applying to all types and forms of employment within the UK. Taxation of work should also be more consistent across the board, while at the same time, rights and entitlements for the self-employed should be improved. Technology should also be utilised, not as a way to remove staff, but as a means of exploring smarter regulation and more flexible entitlements for staff.
2. The law should be clearer about the rights and entitlements of ‘gig economy’ workers, who the report suggests should be renamed “dependent contractors”, as well as distinguishing between gig economy workers and those who are legitimately self-employed.
3. Additional projections for “dependent contractors” should be introduced as well as incentives for businesses who pledge to support them. Workers and small firms alike should also be made more aware of their rights and responsibilities. Additional non-wage costs of taking on an employee should also be reduced.
4. The most effective way to achieve better working conditions is by businesses acting more responsibly of their own accord rather than from any pressure placed upon them by the government. Businesses are urged to be transparent and open about their practices – while ensuring workers’ voices are heard.
5. Employees should be given realistic ways of achieving promotion by being the given the opportunity to learn and up-skill on-the-job.
6. Businesses should take a more pro-active approach to workplace health and promoting health and wellbeing among its staff.
7. The National Living Wage is a “powerful tool” for helping low-paid workers but needs to be accompanied by employer and stakeholder support to ensuring low-paid staff can progress.
The report was written by Matthew Taylor, chief executive of the RSA, and was co-produced by Onefinestay CEO and Young Gun Greg Marsh, Diane Nicol, partner at Pinsent Masons and Paul Broadbent of the gangmasters and labour abuse authority.
“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.”
Reaction to the Taylor review
Suneeta Johal, director of the Centre for Research on Self-Employment (CRSE), said:
“It is absolutely vital that we are able to separate the genuinely self-employed from bogus arrangements. Matthew Taylor was therefore absolutely correct to call for greater clarity between what constitutes a worker, and what it is to be self-employed.
“It’s important to distinguish between the various types of self-employment, as well as what is not. This will enable a differentiated `policy approach so government can to provide the appropriate support to those who need it, whilst at the same time enabling those who are driving the economy.”
Chris Bryce, chief executive of the Association of Independent Professionals and the Self Employed (IPSE), said:
“Renaming workers ‘dependent contractors’ might bring some benefits, but government will have to be absolutely clear who falls into this group. It will still be up to the courts to rule on employment status. We also have a serious concern that it is far too reductive to only look at direction and control as indicators of worker – or ‘dependent contractor’ – status.
“In reality, things are a lot more complicated than that. You should still also consider the ability to choose when and where you work, whether the role is project based and whether you have the right to send a substitute.”
To read the report in full, click here.