The Taylor Review: key takeaways

The government’s review of employment practices was released yesterday, and in it was a strong focus around the gig economy, and the power it gives employers.

The report – ‘Good Work’, The Taylor Review of Modern Working Practices, by Matthew Taylor – recommends a number of steps that need to be implemented to achieve a ‘fair and decent work with scope for development and fulfilment.’

Quality of work

The definition of ‘quality of work’ will inevitably differ from employee-to-employee, but the report lists six prominent signs of quality:

1. Wages
2. Employment quality
3. Education and training
4. Working conditions
5. Work-life balance
6. Consultative participation and collective representation.

Challenges ahead

With employment levels at an all-time high and a flexible approach, the UK’s labour market is in a strong position but, inevitably, challenges still lie ahead.

Poor real wage growth, poor productivity, challenges matching jobs to skills, new business models like the gig economy and automation, will all test the labour market down the line.

Legal clarity needed

The report expresses the need for greater clarity in employment protections. Currently, the system relies on individuals and employers understanding their working relationship – so, for example, understanding if the individual is truly an employee, worker or self-employed. New business models – like the gig economy – are making this increasingly difficult, and the report urges for clarity in the legislation to address this.

Taylor recommends the new approach should:

• Make employment statuses more distinct
• Ensure individuals aren’t left unprotected because of the way their contract is drafted
• Make seeking employment status clarity easier
• Address the imbalance of power between individuals and employers
• Reduce barriers to individuals asserting their rights.

Flexibility flaws

Although the flexibility the UK labour market offers is a big strength, it comes with its drawbacks too. The report highlights instances where employers take advantage of this flexibility to exert control over individuals. For example, an individual having the option to work when suits them is a pro, but not knowing if work is available to them from one day to the next isn’t.

Flexibility shouldn’t be lost – it allows businesses to operate in ways that best suits them, but it’s important that employers don’t abuse it. Flexible working models should be used sensibly, and not just to reduce costs.

To address flexible working gaps, over the next 12 months the reports suggests the government should:

• Ask the Low Pay Commission to examine how a higher National Minimum Wage rate could apply to non-guaranteed hours.
• Make it easier for all working individuals to access basic details about their employment relationship by developing legislation.
• Update the rules around continuous employment to make it easier for individuals to accrue service.
• Improve holiday pay entitlements to allow individuals in very flexible working arrangements to cash-in on their entitlements in real-time, as well as extending the pay reference period to 52 weeks.
• Reform legislation so that agency workers or individuals on zero-hour contracts can make a request to formalise the reality of their working relationship.

Poor management practices

Whilst there are lots of employers who have positive relationships with their employees, there are plenty who have poor management practices – which have a knock-on effect to their workplace culture and employees’ satisfaction, and this comes back to the six ‘quality of work’ signals we touched on earlier.

To aid a positive working life, employers should place particular focus on employee engagement and transparency. Furthermore, the report suggests the government needs to:

• Re-visit the effectiveness of the Information & Consultation Regulations
• Work with expert bodies to push and place more focus on what constitutes good workplace relations
• Develop a system that encourages businesses to be more transparent when it comes to their structure.

Our comments

David Hewitt, Head of Employment Law Information, HR and Employment Law at Citation, said: “The Taylor Review’s wide-ranging recommendations cover many aspects of the wider working relationship, not just the gig economy.

“Although the aim of the recommendations is not to over-regulate, it’s difficult to see how the changes can be brought about without considerable new legislation. The government now has to decide whether and how to take these recommendations forward.”

Delve into the data

For a more in-depth look at the Taylor Review, head here.