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United Kingdom

2 March 2018

UK: modernising the employment practices – the governmental approach criticised

In the summer of 2017, a review, commissioned by the government, was published that meant to seek an answer to new challenges on the labour market. The report, prompted by the growth in agency working and the gig economy, looked at how employment practices need to adapt to modern working patterns. Six months later, the government’s response was published. Trade unions and industrial relation experts reacted very disappointed to the plans.

By mid-2016, the government commissioned an expert panel led by Matthew Taylor (chief executive of the Royal Society of Arts) to examine current business models and employment practices and to identify possible pitfalls. It was signalled that not everyone is enjoying the benefits of a recovering 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 make ends meet. Others are trapped in a cycle of lower-paid work, unable to build the skills they need to progress to higher-paid roles. The Taylor committee reported with a review, Good Work - The Taylor Review of Modern Employment Practices, published in July 2017 after ten months of consultation. According to the review an estimated 800,000 to 1.2 million people carry out agency work, and some 1.3 million are working in the gig economy.

The report came up with 53 recommendations. In the final chapter, seven steps towards fair and decent work were sketched out. Among the proposals were the introduction of a new category of worker for employment purposes called a dependent contractor. This dependent contractor would work flexibly in less formal employment with a leaner package of rights compared to a normal employee (rights would for instance include payment of the appropriate minimum wage, holiday pay and sick pay). Other proposals would draw a clearer line between self-employed and direct labour or suggested a transfer of the burden of proof whether someone is a worker or a self-employed to the user undertaking. Also promoted was a cashless labour relation through accredited digital pay.  

Six months after, the government published a response to the Taylor Review. According to the government, the employment framework has to balance the need for rights and protections with the flexibility that is valued by employers, individuals and consumers, which is vital to the ability of business to create jobs. The Taylor Review shows that in a number of areas that framework needs updating to ensure that the balance is maintained. The response sets out a series of reforms aimed to increase the rights and protections of workers, including those who work in the gig economy. The measures include the enforcement of vulnerable workers’ holiday and sick pay, a list of day-one rights including holiday and sick pay entitlements and the right to a payslip for all workers, including casual and zero-hour workers.

Several industrial relation experts and trade unionists were sceptical about the 2017 Taylor Review, as it offered warm words for people on casual contracts, but was ‘tinkering around the edges of the problem’. They asked for the reintroduction of sectoral collective bargaining and the settlement of industry-wide minimum terms and conditions of work by negotiation between unions and employers’ associations. Those minimum terms and conditions could set the rules by which flexibility, security and a decent standard of life could be secured for all in the industry.

The 2018 response of the government even led to a harder criticism. The TUC called the government’s response a baby step – when it needed to take a giant leap. According to the TUC, the plans won’t stop the hire and fire culture of zero-hours contracts or sham self-employment. And they will still leave 1.8 million workers excluded from key protections. In a blog on the website of the Institute of Employment Rights, the different parts of the response were criticised in detail.  

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