Good work or bad? Reaction to the Taylor review
Any much-anticipated report is likely to divide opinion, and the Taylor review of modern working practices is no different. Rob Moss relays comment from employers, unions, employment lawyers and others on the recommendations of today's review.
RSA chief executive Matthew Taylor's 116-page report on the UK's employment landscape has been published after a weekend of tasters and leaks, which meant that some were unhappy with it before they had even opened the PDF.
The report, Good work: The Taylor review of modern working practices, was commissioned by Theresa May back in the autumn to address growing concerns around modern employment: the gig economy; the use of zero hours contracts; bogus self-employment; pay; job security; workers' rights; the employment status of individuals doing the work; new business models; representation; career progression and training.
As elements were picked up by the press in the days prior to publication, there were already suggestions that the review was "feeble" and that the last thing we needed was another employment status.
Taylor Review: how did the world of employment react?
Peter Cheese, chief executive of the CIPD, said the review had the potential to change how we look at the future of work, particularly in the light of the Brexit vote. He said it was about "quality of work and not simply quantity".
"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", said Cheese.
"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."
TUC general secretary Frances O'Grady said: "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 she welcomed some of the review's recommendations: "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."
Neil Carberry, CBI managing director for people and infrastructure, said: "The Taylor Review rightly recognises that labour market flexibility is a key strength of the UK economy, driving better outcomes for everyone. Businesses agree that flexibility must be matched with fairness, but building on our current approach, as the report concludes, is the right way forwards. The CBI is ready to work in partnership with the Government to address the challenges the report raises.
"Spreading good practice, not just focusing on new laws, is something the CBI has long supported given the link between good employee relations and higher productivity, which is the only sustainable route to rising wages and better living standards. There is much for firms to like, as well as some valid challenges... A number of proposals in the report will be of significant concern to businesses, however.
"Changes to the application of the minimum wage, rewriting employment status tests and altering agency worker rules could have unintended consequences that are negative for individuals, as well as affecting firms' ability to create new jobs."
Dr Adam Marshall, director general of the British Chambers of Commerce, said: "Matthew Taylor has rightly recognised that the UK's flexible labour market is a great source of strength and competitive advantage, but has also recommended some common-sense changes where grey areas have emerged in recent years."
He added: "Civic-minded business leaders across the UK have expressed concerns about the consequences of insecure employment in their local communities in recent years, and recognise there is a two-way bargain that needs to be struck that gives flexibility and security to both employers and employees... While the notion of a wage premium in exchange for uncertain working hours is superficially attractive, it could have unforeseen consequences, and push wage costs up elsewhere. Further expert consideration of the potential impact of such a measure on jobs will be needed.
"If the new category of 'dependent contractors' proposed by the review is implemented, it must have a clear legal definition to prevent any ambiguity or unintended knock-on effects. The Government should consult widely with business and employees over the coming months to ensure any response to the Taylor Review is proportionate, fair and above all unbureaucratic."
Acas chair Sir Brendan Barber said: "We welcome the Matthew Taylor report's focus on good quality work.
"Our submission to the Taylor Review revealed that many Acas Helpline callers were in a zero hours, agency or self-employed arrangement out of necessity rather than by choice. Whilst these types of working relationships can offer flexibility, it is clear that there can be a lot of confusion around employment status and the rights within them.
"The review has raised the profile of the debate around the importance of good employment practices in these non-standard working arrangements and we look forward to seeing the Government's response to the report's recommendations."
Dependent contractor status
It is now clear that Taylor proposes changing the name of a "worker" to "dependent contractor", not creating a fourth status of employment. Nevertheless many feel this will complicate, not simplify, employment law.
Julian Sansum, employment partner at PwC, said: "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."
But Philip Paget, partner and head of employment at Yorkshire law firm Gordons, said: "I think on the whole the Taylor Review outlines some sensible recommendations which, if adopted, will provide greater clarity in an area of employment where there are currently a number of grey areas.
"The recommendations seek to provide increased protection for workers by way of a new category of 'dependent contractors', who due to the nature of their employment are not autonomous and can only work when they are given instructions from a customer. That being said, whether yet another new worker category and definition is actually required is a different matter."
Julie Taylor, senior associate at law firm Gardner Leader, said: "This recommendation reflects the suggestion from the previous report from the Work & Pensions Committee that those engaged on such terms should be workers by default, which would entitle them to holiday pay and is intended to recognise that the existing categories are out of touch with our current labour market.
"This proposal may well help to maintain the flexibility currently valued by so many, but this change to the categories could simply increase disputes and the additional costs will be a heavy burden for employers so even if implemented, this is unlikely to be a quick fix."
Nigel Mackay from law firm Leigh Day, who represents Uber drivers and Deliveroo riders, said: "Whilst the Taylor Review includes some welcome suggestions, it is disappointing that it has avoided the more radical suggestions for change that might have helped workers in the gig economy and other precarious work.
"The review provides for a new category of employment status, known as 'dependent contractor", which it admits is essentially a relabelling of the current "worker" status with few additional rights. Introducing new terminology in this way may only serve to confuse individuals as to what rights they do have."
Sick pay, holiday pay, national insurance
Suzanne Horne of law firm Paul Hastings said: "The review advocates enhanced rights for workers... The obvious consequence for employers is that more people will be categorised as workers, entitled to the national minimum wage, sick pay, holiday pay and more interestingly employer's national insurance contributions of 13.8%. Therefore, if these proposals are implemented, we will see increased payroll costs for employers."
Kathryn Dooks, employment partner at Kemp Little, said, "Taylor's proposals on hours of pay, the minimum wage and statutory sick pay risk undermining the rights of employees and workers in the wider workforce in unforeseen ways. They will be complicated to administer and are bound to lead to even more tribunal litigation."
Minimum wage for piece work
Peter Cheese said the CIPD had reservations about the practicality of the proposal to introduce minimum piece work rates. This is where companies paying by task rather than by the hour pay according to models sometimes used in agriculture.
Matthew Percival, CBI head of employment, said: "The review rightly raises concerns about how fair piece rates might apply to platform workers and this is a question that merits further consideration."
On abolishing Swedish derogation
Recruitment & Employment Confederation chief executive Kevin Green said: "Swedish derogation provides agency workers with full employment rights, and was agreed by the Government and all stakeholders including unions as part of negotiations in 2009 to implement the Agency Workers Directive (AWR).
"We are concerned that any attempt to amend the AWR may risk watering down the rights for individuals and would create uncertainty for business... The underlying priority must be to ensure people can still work flexibly if they wish to, and that employers can continue to benefit from a vibrant temporary and contract market.
"We support effective enforcement activities, but we haven't seen any evidence that supports the argument for the current system to change."
Right to request more hours and overtime minimum wage
Torsten Bell, director of the Resolution Foundation, said: "While much of the focus has been on relatively small shifts on the gig economy, the review's most radical proposal would actually have far more impact in traditional sectors such as retail and social care. A new minimum wage for overtime, forms of which already operate in the US and Australia, would be a big change for low-earning workers struggling with tight budgets and insecure earnings.
"The boldness on overtime contrasts with a timid right for zero hour contract workers to request guaranteed hours, something that can all too easily be rejected by employers.
"Overall, this is a welcome contribution to a much-needed debate about how we ensure our labour market reflects the ways in which people actually live their working lives."