It’s a big week for the self-employed - especially so-called gig economy workers. ‘Good Work: A response to the Taylor Review of Modern Working Practices’, the government's review of the rights and challenges faced by vulnerable workers, has finally been published after months of delays.
The original review, published last July, was penned by Matthew Taylor, executive chairman of the RSA, a charity that aims to ‘enrich society through ideas and action’. It puts forward a vision for a ‘fair and decent’ working life for the self-employed, and recommends legislative tweaks that could improve the status quo.
The 116-page document was created in response to the stratospheric growth of Uber and Deliveroo, which were built on the labour of self-employed workers. These players have drawn controversy, as their workers get neither sick pay nor holiday entitlement, despite demonstrably working ‘full-time’.
The government has announced its intention to act on nearly all of the Taylor Review's recommendations. Many of these changes are small – updates to existing legislation, for example. But some have the potential to make a significant impact.
The government will:
- Crack down on businesses and industries that use unpaid interns for work that should be done by a paid employee.
- Consider a higher minimum wage for workers on zero-hours contracts.
- Allow flexible workers to demand more stable contracts.
- Ensure self-employed people are informed of their specific rights when they begin working for a new employer.
- Appoint HMRC to enforce the rights of part-time and flexible workers – so they will get their allotted parental leave, or sick/holiday pay.
- Give all workers the right to demand a payslip, including agency workers.
- Push up employment tribunal fees fourfold for employers who show spite, malice or gross oversight (to £20,000).
- Help workers to ‘name and shame’ employers who fail to pay out employment tribunal awards.
- Repeal the law allowing agencies to employ staff more cheaply.
- Work with industry to consider ways of encouraging the development of online tools for self-employed people to come together and discuss issues that are affecting them.
- Develop a definition of ‘working time’ that is suitable for people finding work through platforms via a smartphone app or online.
Everyone wins. At least, that’s the idea. The government has backed Taylor's plan to balance out inequality in our economy.
Greg Clark MP, Secretary of State for Business, Energy and Industrial Strategy, said in the Good Work report: ‘It is clear that not everyone is enjoying the benefits of a vibrant labour market. Some in work still do not have the income security they or their family want, not knowing whether they will be able to pay the rent from week to week. Others can find themselves trapped in a cycle of lower-paid work, unable to build the skills they need to progress to higher paid roles.’
Official statistics show that at least two million workers experience non-payment of wages or holiday pay and that those unpaid wages amount to at least £1.3 billion per year. In theory, these people now have recourse to claim these expenses from their employers.
Taylor has called the government’s response to his recommendations, ‘substantive and comprehensive’, adding, ‘It will make a difference to the lives of the most vulnerable workers and that is what matters.’
The CBI, which calls itself ‘the voice of business’, seems in favour of the recommendations. ‘Business agrees with the government that flexibility and fairness must go hand in hand, and it is right to review rules to ensure they are fit for the 21st century – this also forms a key part of the industrial strategy,’ said Neil Carberry, CBI managing director for people and infrastructure.
Acas Chair, Sir Brendan Barber, spoke on behalf of gig economy workers, saying: ‘We welcome the Government’s new proposals to protect and improve workers’ rights in response to the Taylor Review.’
The self-employed were also granted a boon in the Taylor Review; they have been spared a hike in their National Insurance Contributions. The government had threatened to bring these in line with employed workers’ NICs but the issue was skirted over entirely in the report. Self-employed workers and small business owners across the UK have breathed a collective sigh of relief that these taxes aren't rising - for now.
Employers are now getting a bum deal, according to the Institute of Directors. ‘The different tax treatment of the employed and self-employed has been a driving force behind the rise in self-employment in recent years, but tax treatment should not determine a person’s choice of employment status,’ said IoD director general Stephen Martin.
‘The Government should have shown the courage to tackle this issue head on. In a system where the same person can be an employee for the purposes of employment rights and self-employed for tax purposes, it is confusing for both employers and their staff.’
According to the Federation of Small Businesses (FSB), the report has failed to address other challenges faced by the self-employed (many of whom are sole traders – AKA small business owners).
National FSB Chairman Mike Cherry said the report didn't look at how hard it is for the self-employed to apply for mortgages and insurance products. He said: ‘It’s disappointing that these challenges have once again not received a mention today.’
He also stressed that bringing out more legislation can create more problems than it solves, as the new rules could leave both the self-employed and businesses tied up in red tape. ‘Incentives and nudges are often the best route to improving modern working practices,’ Cherry added.
Ultimately any change to the legal framework takes time, and Melanie Stancliffe, employment partner at Irwin Mitchell, the law firm, warns that this will be the beginning of many more consultations and negotiations. ‘At best, we are all at the start of a long process of change in the law,’ she said. ‘This still leaves a lot of uncertainty.’
Image credit: Mosieur J/Flickr