Workers need a better understanding of their rights, says employment practices review author
PUBLISHED: 11:20 12 July 2017 | UPDATED: 11:20 12 July 2017
Matthew Taylor's review of UK employment practices is intended to help inform legislation changes to accommodate new employment models. Bethany Whymark gauges the business reaction.
Determining the rights of some of the most vulnerable workers in our economy has emerged as a key priority in a comprehensive review of the UK’s modern working practices.
The world of work is shifting under our feet, with the emergence of new models such as the gig economy and the rise of flexible working challenging traditional structures.
However this metamorphosis presents both legal and moral challenges as those working in these new environments – and those in charge of them – grapple to define their relationship to one another.
Riding hailing app Uber and courier firm CitySprint have both lost legal wrangles over the employment status and rights of their workers.
Matthew Taylor, chief executive of the Royal Society for the Arts, was commissioned by Theresa May to investigate what steps legislation should take to keep up with changing employment models.
In his review he said the UK’s flexible labour market had been “an invaluable strength of our economy, underpinning job creation, business investment and our competitiveness”.
But Chris Sargisson, chief executive of Norfolk Chamber of Commerce, said a “two-way bargain” needed to be struck to give flexibility and security to both employers and employees.
“Firms already face high costs in addition to wages and we are pleased that he [Mr Taylor] has sought to avoid adding to these burdens at a time of uncertainty and change.”
He added any response to the review should be “proportionate, fair and unbureaucratic”.
Salena Dawson, East Anglia regional chair for the Federation of Small Businesses, said: “It’s right that skills, productivity, savings and the cost of employment are highlighted as key issues for the government to address. Collective action and collaboration can play an important role in this.”
Norwich North MP Chloe Smith said she wanted to speak to businesses and workers about how modern employment models had affected them.
“There are some serious issues raised by this review and some common-sense points. I would be very keen to hear from Norwich employers and workers on their experiences before we come back to this really important subject in Parliament.”
The Taylor review’s recommendations centre around reforming insecure and exploitative “bad work”, which not only harms individuals but can have implications for wider society and the economy.
Mr Taylor said better quality jobs, as well as stronger management and employment relations, would be key to reviving the UK’s ailing productivity.
Self-employed or workers – the gig economy debate
The gig economy – where workers are paid per task (or gig) they complete and are often said by their employers to be “self-employed” – has prompted the discussion over what constitutes “good work”.
The review recommends that a new “dependent contractor” status be introduced for people who work for companies in this economy, such as Deliveroo and Uber, but calls for clear differentiation between these people – who do not enjoy full in-work benefits – and those who are self-employed.
Nicola Butterworth, an employment lawyer at Howes Percival in Norwich, believed this new status would make the distinction clearer.
“It should reduce the risk of exploitation of vulnerable groups and encourage good employment practices,” she said.
“If companies are not recognising the employment status of individuals properly it allows them to undercut their competitors by not paying certain benefits. The intention is that once someone is able to clarify what their employment status is, they will understand what their rights are.”
Milee Brambleby, director at workplace conciliation firm Common Sense Services, said the employment market was becoming “increasingly complex”.
“Complexity and ambiguity can be breeding grounds for mistrust and conflict, but they can also offer much-needed flexibilities for firms and workers alike.
“Squaring that circle requires more than regulation, it needs a desire on both sides to make it work to everyone’s advantage.”
Su Harvey, director at recruitment firm The Personnel People in Norwich, said: “We believe so-called ‘gig economy’ firms have exploited a loophole in employment law, to their own benefit. The workers in question really have nothing to gain.”
Mr Taylor has also suggested that gig economy companies should pay a full range of benefits including holiday entitlement, sick pay, and national insurance contributions – benefits some recruitment agencies already pay.
Ms Harvey said that if all gig economy firms were legally obliged to offer the same “it would benefit the worker and give all businesses the chance to operate from a level playing field”.
Recommendations for the “hidden economy”
Recommendations were made in the review to reform the “hidden economy”, and the tax avoidance it can facilitate.
HMRC has estimated the hidden economy – which includes cash-in-hand payments – could be costing upwards of £6bn a year to the UK economy through missed tax payments. Mr Taylor suggested a move toward more digital transactions such as credit cards and PayPal, to create a digital payment record, increase the “transparency of payments” and “support individuals to pay the right tax”.
Employers’ national insurance contributions were also examined. A submission to the review said these contributions were the “£60bn elephant in the room”, with some employers using flexible working arrangements to avoid paying contributions.
The review also called for NI payments by the self-employed to be brought in line with those made by employees to rectify an “unsustainable” situation.