UK’s Taylor Review Recommends New Framework for Gig Economy Workers

UK’s Taylor Review Recommends New Framework for Gig Economy Workers

The UK government’s long-awaited Independent Review of Employment Practices in the Modern Economy, led by Matthew Taylor, a former advisor to Tony Blair who was appointed by Prime Minister Theresa May to lead the review last October, published its findings and recommendations on Tuesday. The review was initiated to deal with some of the most pressing and controversial issues in the UK’s labor market today, including the advent of the gig economy and zero-hours contracts.

In a speech announcing the launch of the review, Taylor emphasized that while the UK’s economy has done well at creating jobs, the rationale of his project is to help ensure that it creates good jobs:

Our national performance on the quantity of work is strong. But quantity alone is not enough for a thriving economy and fair society. We believe now is the time to complement that commitment to creating jobs with the goal of creating better jobs. The Review calls on the government to adopt the ambition that all work should be fair and decent with scope for fulfilment and development.

Taylor’s report identifies three key challenges employers and policy makers must address to meet this goal: Addressing worker exploitation, clarifying rules and ensuring workers know their rights, and aligning the labor market with the country’s long-term industrial strategy. The report’s key recommendations include:

  • With regard to worker classification, the review recommends that the employment status currently known as “worker” be renamed “dependent contractor” and that workers in this category should still be entitled to employment protections like the minimum wage, sick leave, and holiday pay. Legislation should be rewritten to clarify the legal tests for different employment classifications, rather than relying on case law as the UK currently does. These tests should rely more on the degree to which an employer controls a worker’s time and activity, and less on whether the individual works personally for the employer. The review also proposes to make it easier for individuals to find out what their employment status should be, using an online tool. Dependent contractors should also have the same right as employee to a written statement of the terms of their employment on their first day on the job.
  • With regard to those who find work through gig economy platforms like Uber and Deliveroo, the review urges the government to amend existing piece rates legislation such that “platforms would be able to compensate workers based on their output (i.e. number of tasks performed), provided they are able to demonstrate through the data that they have available that an average individual, working averagely hard, successfully clears the National Minimum Wage with a 20% margin of error.” Platforms should use the data they generate to give workers a more accurate picture of what they can expect to earn in a given time and place; in this way, workers will not be misled with regard to their potential earnings, and platforms will not be held responsible if a worker is unable to find gigs when they log into the platform at a time when there is normally no work.
  • With regard to guaranteed hours and zero hours contracts, the review does not call for the abolition of zero hours contracts but rather recommends that workers in zero-hour arrangements be entitled to request guaranteed hours after working for their employer for 12 months. Similarly, agency workers should have a right to request permanent employment after working 12 months with the same employers. As Taylor suggested in an interview earlier this year, his review also recommends introducing a higher minimum wage for non-guaranteed hours, so that a worker who is scheduled to work 10 hours a week but often works 20 is paid a premium for the additional hours they work.

Jo Faragher has a comprehensive summary of the Taylor review’s recommendations at Personnel Today. Faragher’s colleague Rob Moss, meanwhile, rounds up some reactions to the review from business and union leaders:

Peter Cheese, chief executive of the CIPD, said the review had the potential to change how we look at the future of work, particularly in the light of the Brexit vote. He said it was about “quality of work and not simply quantity”.

“We have been calling for greater clarity over workers’ rights for a long time, and therefore welcome the main thrust of the recommendations to ensure fairer treatment for gig economy workers without losing the flexibility which we know many of them value,” said Cheese.

“We also support the proposals to clarify people’s employment status and rights and back plans to require employers to provide details of terms and conditions of employment to workers as well as employees.”

On the other hand, Trades Union Congress general secretary Frances O’Grady panned the review as “not the game-changer needed to end insecurity at work”:

“A ‘right to request’ guaranteed hours is no right at all for many workers trapped on zero-hours contracts. And workers deserve the minimum wage for every minute they work, not just the time employers choose to pay them for.”

But she welcomed some of the review’s recommendations: “Matthew Taylor is right to call for equal pay for agency staff and sick leave for low-paid workers – something which unions have long campaigned for. The Government should move swiftly to implement these recommendations. Theresa May cannot use this report as shield to hide from her responsibilities. We need a proper crackdown on bad bosses who treat their staff like disposable labour. And an end to employment tribunal fees that price workers out of justice.”

Guardian columnist Owen Jones goes so far as to express fear that the review’s recommendations could ultimately harm workers:

The review suggests relabelling “workers” – an employment category that sits between self-employed contractors and full employees – as “dependent contractors”. But workers – or dependent contractors, as the review recommends they are called – already have entitlements to rights such as sick pay. The key problem is with a lack of enforcement of these rights. …

Alarmingly, the review could even weaken workers’ rights. The Trades Union Congress fears that the revival of piece rates could potentially mean, say, an Uber or Deliveroo driver stuck in traffic could be “paid less for not completing their set quota of jobs”.The Taylor review also pushes against adding new regulations: it promotes changes to corporate culture instead. But moral guidance will not win workers the rights they deserve: unscrupulous employers will only respect a strictly enforced law.

In any case, it is not clear whether Prime Minister Theresa May’s weakened government will be able to act on Taylor’s recommendations at all. According to the Independent, May, whose Conservative party lost its majority in the House of Commons in last month’s snap election, admitted that she could not guarantee that these recommendations would be legislated, promising only that the government would respond to the report later in the year.