Taylor Review – Under the Spotlight
Matthew Taylor, the lead author of the Government commissioned report about the world of work in the UK, has been speaking at a joint hearing of the Work and Pensions Select Committee, and Business, Energy, and Industrial Strategy Committee. The intention of the hearing was to allow the committees to probe and ask for more detail about the proposals Taylor made in his review published in July.
One of the major headlines from the hearing was Taylor’s suggestion that larger companies should be liable for the non-compliance of their supply chain. He used an example of a haulage firm who encouraged their drivers to be self-employed and subsequently went bust, with the unscrupulous owners running off with the money. The drivers, not only lost their jobs but also found themselves investigated by HMRC for non-payment of taxes they should have been paying as they were in reality employees. Taylor suggested that to protect workers from this, the company whose goods they were delivering, which could be a major brand, should be responsible for ensuring that the working practices at the bottom of their chain are satisfactory.
A further topic of discussion was the proposal for a premium minimum wage for those who are either on zero or low hours. Taylor said:
“There are some very large companies in the country now who put people on 4-5 hour contracts yet expect them to work 30-35 hours a week. This causes people problems in terms of security and their ability to get a mortgage or a loan.”
The goal of this measure would be to increase the wages of those who work in this way but also encourage employers to guarantee more hours to their employees. A two-three-year pilot was suggested to examine the impact of this policy.
The hearing moved on to discuss the proposal for piece work rates for those in the gig economy. Of all the suggestions in the Taylor Review, this was the most controversial as it proposes that some people will be paid under the National Minimum Wage as long as the average worker, working averagely hard gets 120% of the minimum wage. Taylor made the point that this was not to be used in general but was a solution to a specific problem. There is an issue with this however, as many of those who work in the gig economy are now being considered workers and therefore entitled to the National Minimum wage. This could lead to companies like Uber and Deliveroo moving away from the on-demand style of work they currently operate, which their drivers like, and switch to more traditional shift work to prevent drivers logging on in the middle of the night when work is minimal but expect to get paid the National Minimum Wage.
Finally, the hearing moved onto the very topical area of employment status. Taylor expressed the view that the courts are doing too much in this area and legislation should be doing more. He also criticised what he saw as ‘substitution’ being too widely used by employers to justify the self-employment of their workers. Taylor added that he was disturbed by the number of businesses who are now under threat because they are being undercut by those who are not respecting workers’ rights. These companies are making large savings by failing to pay employment taxes, NICs and pensions contributions at the expense of businesses who are paying these rates. He called for a level playing field where flexible working can be a positive force rather than a race to the bottom.
Empire can assist if you are concerned about your employment practices. Please call 01224 701383.