7 things employers need to know about the Taylor Review

11 July 2017

The long awaited Taylor report into modern working practices has just been published and should be of keen interest to most employers and those using off payroll workers.

The key recommendations and findings are:

  1. The national strategy for work should be explicitly directed toward the goal of good work for all, recognising that all forms of employment should have a fair balance of rights and responsibilities, that taxation of labour should be more consistent across employment forms, and that technological change offers opportunities in the way we work but also for smarter regulation and the way people organise.
  2. The opportunities and flexibility offered by platform based working should be protected while ensuring fairness for those who work through these platforms and those who compete with them.
  3. The law should help firms make the right choices and individuals to know and exercise their rights.
  4. The best way to achieve better work is not national regulation but responsible corporate governance, good management and strong employment relations within the organisation.
  5.  It is vital to individuals and the health of our economy that everyone feels they have realistically attainable ways to strengthen their future work prospects.
  6. For the benefit for firms, workers and the public interest we need to develop a more proactive approach to workplace health.
  7. The National Living Wage needs to be accompanied by sectoral strategies engaging employers, employees and stakeholders to ensure that people – particularly in low paid sectors – are not stuck at the living wage minimum or facing insecurity, but can progress in their current and future work.

While it may take time for Government to enact change in the current political environment, the potential impact of the Taylor Review should not be underestimated.  It sets a clear direction of travel and some employers may see a first mover advantage around adopting the proposals.  It is clear that change needs to happen. The way business has evolved and people’s working habits have changed has outpaced employment and tax legislation. This round peg to square hole conundrum is only going to get worse as more gig platforms emerge.

But it’s not just those businesses engaging people in the Gig Economy or on zero hours contracts that need to consider the changes this report may bring. Any employer who requires a degree of flexibility within its workforce, be that due to seasonality, the type of industry, or the requirements from its workforce, should now be giving some serious thought to the recommendations  as well as listening to those individuals they engage with.

Greater protections for workers, such as the ability to request fixed hours,  needn’t be bad news for employers, as they can provide more certainty around labour supply, and help attract staff in what could be an increasingly competitive market. A recent PwC study for the European Commission shows that the UK’s sharing economy has grown faster than anywhere in Europe, with transactions doubling to £7.4bn in 2015. Moreover, separate PwC research suggests 41% of UK adults would consider gig work and other flexible options if employment rights improved significantly.

The tax side of this discussion is more complex. The U-turn following the Budget announcement to greater align national insurance between employees and the self-employed shows how controversial these changes can be.  The Taylor Review should at least help foster debate on this issue, and enable consideration of the unintended consequences.  

But until we see legislative change, this will still be a grey area as employers, workers and worker rights groups await decisions to be fought on a case by case basis within the courts.  

So does the Taylor Review hold the answers for modern employment practices? Only time will tell, but it provides a much needed starting point. The UK’s entrepreneurial community and culture is a key strength and partly why our sharing economy has outpaced the rest of Europe. Yet our neighbours in Europe have much better productivity statistics whilst also operating what many consider much more restrictive worker rights laws. Striking the right balance is arguably more important than ever as the UK looks to its future.

 Julian Sansum

email: julian.a.sansum@pwc.com

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