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Taylor Review proposals could struggle to make it into statute book

The Taylor Review is set to shake things up for the gig economy, but is it for better or worse? We canvassed the business landscape for opinion on the matter.
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On 11 July, the much-awaited Taylor Review, which seeks to weed out the challenges currently facing the labour market, was launched.

Its pages reveal seven recommendations, the first being the benefit of having the same “basic principles” scattered across the nation. The UK workforce requires “a distribution of rights and responsibilities, a baseline of protection and routes to enable career progression,” it said.

That “the best way to achieve better work is not national regulation but responsible corporate governance,” is another point the Taylor Review makes, alongside the need to offer contractors additional protections.

The issues it confronts go right to the heart of the government’s agenda and right to the heart of our values as a people,” prime minister Theresa May said at its launch. “Our motivations for going to work are deeply personal. It is how we provide for ourselves and our families.

“It’s how we keep a roof over our heads and provide for our old age. And as the Taylor Review suggests, ‘work is a pathway out of poverty’.”

But while it espouses the virtue of good health, better environments and an increasing quantity of jobs, do those in business feel it has hit its intended mark?

Seb Maley, CEO of Qdos Contractor

“The Taylor Review has made the case that over time there should be equal tax treatment of the self-employed and employed. It argues bosses should contribute to National Insurance Contributions (NIC) for their contractor workforce, as they would their employees as the government ‘loses out’ on £5.1bn a year from lower rates of NICs paid by the self-employed.

“The self-employed do not enjoy the same benefits as employees, so to call for a balanced taxation system seems shortsighted. And while it was suggested companies engaging with self-employed workers could perhaps make these NIC contributions, many contractors would feel as though an element of their independence was taken away.”

“The new-look government has an opportunity to rethink the support being offered to the UK’s 2m freelancers and contractors, who make up a large proportion of the UK’s 4.8m self-employed people. This should start with a change in attitudes towards the self-employed, some of whom have been unfairly tarnished as tax-avoiders.”

Julian Sansum, employment partner at PwC

“The Taylor Review could prove seminal for working practice and trends. While legislation may take time, it 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 the 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. Also of great interest are the proposals to apply a 20 per cent premium rate to the National Minimum Wage for those carrying out piece rate work. But this is an area that would require detailed consultation.

“It’s not just businesses engaging people in the gig economy that need to consider the changes this report brings. Any employer requiring a degree of flexibility within its workforce cannot ignore the recommendations. The UK’s entrepreneurial community and culture is a key strength and partly why the growth of our sharing economy has outpaced the rest of Europe.

“Striking the right balance between fostering greater productivity and employment options, with increased workers rights will be even more important as the UK looks to its future.”

Stuart Chamberlain, lead commentator for Wolters Kluwer Croner-i HR

“It was recognised that flexibility in the gig economy is one-sided, too much in the employer’s favour. The Taylor Review thus recommends the adoption of the term ‘dependant contractor’ for those who work in the space, with additional employment protections and stronger incentives for firms to treat them fairly.

“Hoping to push the government towards achieving ‘fair and decent work’, it calls for, as an example, the Low Pay Commission to examine how a higher National Minimum Wage rate might apply to non-guaranteed hours. But all in all, the Taylor Review is likely to come as a disappointment to those who hoped for more radical suggestions. It has already been labelled as ‘feeble’ by Thompsons, the trade union solicitors.

“It is wishy-washy on employment protection rights: there is a lot about ‘requesting’ and ‘receiving’ but little on ‘hard’ rights. It is also debateable whether the new employment status of dependant contractor is necessary. May has said the government will take the recommendations seriously. It remains to be seen whether this will happen.

“The PM is faced with parliamentary uncertainty and there must be a doubt whether her administration has the inclination, let alone the time to do much with these recommendations.”

Nicholas Le Riche, employment partner at Bircham Dyson Bell

“The Taylor Review wants to see a sharper definition between who can be classified as employed, self-employed and this new category with greater emphasis placed on the control rather than whether the work has to be done personally.

“The greater clarity it brings on the issue of worker status is to be welcomed although businesses will want to see greater detail on how Taylor’s proposals for a ‘fair rate’ of hourly pay will work in practice. It will be interesting to see whether the government acts on the report’s recommendation to ensure that dependent contractors are also seen to be employed for tax purposes.

“The review is being presented as one of the government’s key initiatives at the moment but given the current political climate these proposals may still struggle to make it into the statute book.”

Employers operating in the gig economy will view the Taylor Review as an attack against work structures, someone suggests on the next page

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About Author

Shané Schutte

Shané Schutte is a senior reporter at Real Business, with a particular specialism in employment and business law, human resources, information technology and sales/marketing.

Real Business