The Taylor report into ‘Employment Practices in the Modern Economy’ does little to help workers being exploited in the workplace.
The appointment of Matthew Taylor was always likely to be a safe choice for the Prime Minister in conducting this review. The report is very New Labour - progressive in ambition, but nothing too radical in practice. A classic bit of 'nudge' capitalism.
The problem with this approach is that while good employers may respond to the nudge, the specific problems he was asked to consider are exploited by the cowboys. They need a regulatory kick up the backside, rather than a nudge.
This nudge approach is reflected in the key recommendations:
- Dropping ‘worker’ status for that of ‘dependent contractor’, in an attempt to distinguish more clearly between those who are genuinely self-employed and those who are not. These may attract additional protections.
- Platform based services e.g. Deliveroo, Uber, must be able to show that that they are paying their average worker 1.2 times the national minimum wage.
- Responsible corporate governance, better management and stronger employment relations is apparently better than regulation.
- No recommendation that tribunal fees should be scrapped, although some tinkering with the system including naming and shaming employers who don’t pay awards. More helpful is a free preliminary hearing on employment status and reversal of the burden of proof.
- Zero-hours and agency workers should have a right to request fixed hours or a direct contract of employment after twelve months.
- Reintroduces ‘rolled up’ holidays acting as a disincentive to take holidays. Time off becomes a luxury for those who can afford it.
If you are suffering from exploitative employment practices you might well feel pretty underwhelmed by these recommendations. This isn't just limited to the gig economy, it also applies to many in the private/voluntary home care sector. For the Prime Minister, post-Grenfell, to use phrases like ‘overbearing red tape’ shows she has learned nothing about the importance of effective regulation.
On the specifics, we don’t need a new category of employment status. The courts have already been able to determine bogus self-employment when they see it. What we need is effective enforcement of legal rights. As Labour’s Rebecca Long-Bailey MP put it “If it looks like a job and smells like a job the chances are that it is a job”.
On platform working, Taylor appears more concerned about cash wages for low paid workers eking out their wages at the weekend, than multi-national companies engaged in large scale tax dodging. Perhaps unsurprising when his panel included investors in these companies!
By introducing a complex averaging reporting system for wages, he is effectively saying that companies shouldn’t have to pay the national minimum wage for every hour worked. No prizes for guessing who is going to get the lower paid shifts.
The recommendations are built on the premise that the UK’s flexible labour market has been a great success. One of the most disappointing aspects of the Taylor report is the lack of evidence to support his assumptions. From the Chief Executive of the RSA I would have expected better.
One of those assumptions is the failure to recognise that business investment per capita has almost ground to a halt. The flexible labour market encourages the substitution of cheap labour for capital, hence the dismal levels of productivity. This chart by the TUC’s Geoff Tily from OECD data, shows just how far the UK fell between 2007 and 2015.
After some modest recovery the OECD are now forecasting a return to the bottom of the league. Taylor is, in effect, supporting this approach. The other consequence is increasing household debt.
All our experience shows that employers, particularly those in the gig economy, will not be ‘nudged’ into best practice because the Government asks them to, or it’s the right thing to do. It is only legislation, with effective enforcement and strong collective bargaining, which will make any difference.
The Taylor Report is a huge missed opportunity. It demonstrates a failure to understand the lives of workers on the fringes of decent employment. It consolidates a race to the bottom in employment practice.