What difference will Matthew Taylor's review of work make?

'Dependent contractors' could gain new rights.

by Adam Gale
Last Updated: 11 Jul 2017

Writing the review on modern employment practices for the Prime Minister is what you might call a good gig. Its author, Matthew Taylor, wasn’t exactly short on work – he’s chief executive of the RSA – but the former Downing Street strategist and prominent Blairite surely welcomed the unusually high profile opportunity to influence public policy again.

The gig economy does not look like that to most of the million or so people it’s estimated to contain in the UK. Their work is more likely to arrive via a ping on an app rather than a phone call from Theresa May.

Not all gig workers are Deliveroo riders or Uber drivers of course, but it’s undeniable that technology is one of the factors changing the way we work and that, as often happens, the law has lagged some way behind what people are actually doing.

Critics of the gig economy say the work is insecure and denies workers their legal rights to the minimum wage, sick leave and holiday pay by dressing them up as the self-employed. Supporters say it’s driven by a desire for flexibility, that the giggers are indeed self-employed in every meaningful way, and that therefore everybody wins.

Taylor’s review calls for a new category of ‘dependent contractors’ to legally occupy the grey area between self-employed and worker. Those in this category would be entitled to benefits such as sick pay and, reportedly, an expected minimum wage 20% higher than the current National Living Wage of £7.50. This would not be guaranteed, but based on the average earnings of an average worker working normal hours on a normal day.

The work would remain flexible, with neither the employer nor the contractor under any obligations to offer or accept shifts. The employer would also have to pay national insurance contributions and give giggers a ‘heads-up’ on the actual wage they’d earn at a given time of day. Taylor calls it ‘two-way flexibility’.

Other key recommendations include ending the 'Swedish derogation', which sounds like a Robert Ludlum thriller but is acutally a rule that allows firms to pay agency workers less than full-time staff for the same work, ending cash-in-hand payments and improving the progression prospects for low-paid people, something that almost certainly sounds easier than it is. One thing Taylor notably hasn't recommended is an end to zero-hour contracts, instead suggesting a right to request  a guaranteed hours contract after a year's employment. 

Taken collectively, the recommendations would represent a substantial change in our employment laws – if they're implemented. After all, the political landscape has shifted a great deal since May appointed Taylor in October. To get policies through Parliament now, she needs broad support, and while it therefore helps that Taylor is part of the (ousted) Labour establishment, his recommendations may go too far for some and not far enough for others.

The CBI for instance has expressed concerns about ditching the Swedish derogation, while the GMB has called the review a 'missed opportunity' to tackle the issue of insecure work, which it says affects 10 million people in the UK.

Ultimately, the debate about new forms of work resembles many an other classic left-right tussle: improve the quality and security of jobs (but reduce their number) or let the free market reign (and let workers suffer).

The 'third way' offered by the Taylor Review will clearly not please both sides, but if it were implemented, at least it would introduce much needed clarity into the current, muddied waters, and that should be welcomed by everyone. As it is now, workers and businesses alike face years of uncertainty as they await the outcomes of back-and-forth legal battles, where a slight change in the working of a contract could start the whole process over again. You’d hope that pragmatism, for once, would prevail.  


Read More: When is self-employment not self-employment?


Image credit: The RSA

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