The Taylor Report is considered essential reading for Companies, small and big who have a workforces. While the review covered a few different topics, most of it was surrounding the recent controversies and ambiguities that have come up as part of the ‘gig’ economy. Rather than being about music, the gig economy is an environment where temporary positions and zero-hour contracts are common. This is something that didn’t really exist a few decades ago, but now has become almost the norm in many industries. Recent examples include companies like Deliveroo, Uber, Hermes and Yodel, many of who are facing difficulties in terms of their workforce, the status of their workforce and the way they are treated by employers. The Taylor Report focussed in on these issues and made some suggestions of what could be changed to improve the lives of workers.
If we were to go through all of the findings from the report, we would be here all day. So instead, we’ve rounded up a few of the most important points covered and summarised them for you here:
Zero Hours Worker Wages: Zero hours contracts are a tense subject, mainly because there is never a guarantee of work. And many employers abuse this system to avoid paying higher wages. The Taylor report calls for employees to be incentivised to schedule guaranteed hours for zero hour contract workers.
Employment Tribunals Shouldn’t Be Used To Decide Status: Worker status is a big issue in the gig economy, and it causes a lot of concerns for those working in it. At the moment there is a 3 tier system in place – you are either an employee, a worker or self-employed. Clarity on the type of employment an individual has should be clarified before it ever reaches the tribunal stage. In addition, the burden of proof should be shifted to the employer to disprove that a claimed working relationships exists, rather than someone having to prove that it does. This came off the back of several high profile cases on the status of workers, which rules that the claimants were workers ad not self-employed. It also called for businesses who ignore court decisions should face greater penalties.
Close Loopholes: In particular, one loophole known as the Swedish Derogation Rule, which comes from EU legislation. This loophole was negotiated by a Swedish delegation (hence it’s name), but basically says that where ‘agency workers’ are employed on a permanent contract by their temporary work agency (typically a recruitment agency or umbrella company) and receive payment in-between assignments, then they AWR rights to equal pay for that worker no longer exist. This means that the company doesn’t have to make sure that the worker receives equal and fair pay. By closing this loophole, many workers will receive better pay, but it would mean extra costs for businesses.
Changes To NI: In 2017 Chancellor Phillip Hammond famously U-turned on the proposed changes to the rate of National Insurance. He had planned to bring the NI contributions paid by the employed and the self-employed into a similar range, but quickly retracted the proposal. However, the report suggested that the proposals were correct, stating that: “The level of NI contribution paid by employees and self- employed people should be moved closer to parity while the Government should also address those remaining areas of entitlement – parental leave in particular – where self-employed people lose out.”
What That Means For Employers
For employers who participate in the gig economy, this could mean big changes. While the Taylor Report is only a recommendation and not a guarantee of change, it does call for significant change in employee and worker rights, and how employers approach hiring contractors and part time workers. The Taylor Report has successfully highlighted the fragmentation of workers and employment over the last decade, and how contracts have shifted away from employment and more towards on-demand economy. And while there is no inherent problem with this model, there is a need for more protections and rights for the workers within it. This report proves that the government is looking into the state of the gig economy, and attempting to put some protections in place. Since the Taylor Report is only there to make recommendations, there is likely to be a lot of debate at Government level around these issues.
At Your HR Consultant we understand that managing your business can be tough, and it can sometimes be difficult to make the right decision. Especially when it comes to employment. That’s why we’re on hand to help you understand what options you have for hiring staff, and ensure you create the best working relationships you possibly can. Our experts have years of experience dealing with employment contracts and HR issues, and are happy to discuss anything you would need. For more information, just get in touch with us today.