Diane Nicol: Rocky road ahead for some Taylor recommendations

The government's response to the wide-ranging proposals contained in the Taylor Review '“ the independent review of the UK's gig economy '“ has been rated only four out of ten by the eponymous author of the report, Matthew Taylor.

Diane Nicol is a Partner and specialist in employment law at Pinsent Masons

The former head of the No.10 Policy Unit said the reason for this assessment was chiefly because the government was continuing to consult on a whole host of other issues, and that his scoring could rise to a seven or eight if those consultations prove productive.

As one of the four members who sat on the Taylor Review, I was initially encouraged by the government’s response, but I share concerns that further consultation could result in some of the proposed changes losing momentum, or that many will be watered down or worse, kicked in to the long grass. I echo Matthew’s concerns in other words.

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In examining the gig economy and more flexible business models, we found that there could be one-sided flexibility leading to exploitation by unscrupulous employers and engagers, and we heard many examples of this as we gathered evidence around the UK.

Our aim as a Review was to make sure that any proposed changes retained the flexibility which the UK employment regime in the widest sense permits. This is key to our economy, but we wanted to address the imbalance created by this flexibility and make life more difficult for those seeking to take advantage of vulnerable workers.

The majority of the recommendations contained in the Taylor Review, around 51, have been accepted or at least taken on board by the government. However, a good number of them will be subject to further extensive consultation (closing in May/June), which means that it is likely that many of them won’t come in to force until 2019, and, if they do, they may well be modified.

The government now has four consultation processes under way on recommendations on agency workers, employee status, increasing transparency in workplace relations and enforcement of employment rights.

Our recommendations covered a lot of ground – ranging from achieving greater clarity on employee/worker/self-employed status, entitlement to a written statement on employment particulars to all workers, lowering the threshold for information and consultation of employees from 10 per cent to 2 per cent and reviewing consultation arrangements for workers in the broadest sense, through to giving zero hours contractors and agency workers the right to request more formal contracts (and this is one area where the government has suggested they go further and grant this right to all atypical workers).

Greater employee engagement was a central recommendation in our report and key to achieving “good work” for all workers. This not only benefits the economy but helps address the “Productivity Puzzle”. UK workers work some of the longest hours in Europe and yet we have the biggest productivity gap. While it may seem simplistic, experts believe the “puzzle” or “gap” may well be linked to workers not being properly engaged in their work.

Another important Taylor Review recommendation related to non-compliance by more unscrupulous employers and engagers with employment tribunal rulings, and I was pleased that the government supports proactive enforcement, which includes introducing powers to name and shame those who disregard their obligations and don’t pay Employment Tribunal awards.

There is also a need to clamp down on unprincipled employers and engagers who take advantage of people who are susceptible to exploitation, for example by ignoring holiday pay entitlement and not paying the national minimum wage. This would remove the economic advantage these operators have over the many good and decent employers who are complying with their employment law obligations.

The work of the Taylor Review has been concluded and many key recommendations can easily be brought in to play without the need for legislation. It is now for us all to fully engage with, and influence the ongoing consultations, to ensure that the changes made to Employment Law and modern employment practices in this country can, and do, support the changing world of work and impact positively on the UK economy.

Diane Nicol is a Partner and specialist in employment law at Pinsent Masons