The Taylor Review
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An evaluation of working practices
The Taylor Review completed by Matthew Taylor, a former policy chief to Tony Blair. The overriding objective of the review is that all work in the UK economy should be fair and decent with realistic scope for development and fulfilment. The review focuses on three main areas where it feels change is needed:
- Reducing the risk of exploitation at work;
- The need for a clear legal framework;
- Focus on the long term objective of harmonising the labour market with the current modern industrial strategy and wider national objectives.
It stresses that the core principle behind the review is the relationship between employers and those who work for them. It outlines 7 main steps that should be taken to ensure progress within our economy:
- The UK’s national strategy for work, which the review coins ‘the British way’ needs to be more focused towards good work, something which both the Government and individuals need to be held accountable for;
- Whilst platform based working offers flexibility to many, these workers need to be afforded some sort of protection, and should have their own status of employment, namely a ‘dependant contractor’;
- The law needs to be clarified, allowing people to more easily identify their employment status, and how to exercise their rights;
- There needs to be more emphasis on responsible corporate governance and good management, which in turn strengthens employment relations within an organisation;
- More on the job and off the job training needs to be offered to enhance an individual’s work prospects;
- There needs to be more dedication and a more practical approach to workplace health;
- The National Living Wage needs to be utilised to its full potential, to allow those in low paid sectors to progress.
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The Importance Of Quality Of Work
With employment levels at a record high, the report questions why so many people who are in work, are living in poverty.
Whilst it acknowledges that the introduction of the National Living Wage has had somewhat of a positive impact, for many, there is not necessarily a guarantee of work from week to week, meaning that they become stuck in vicious cycle. The review suggests that there are six indicators of quality of work:
The review suggests that there are six indicators of quality of work:
- Employment quality;
- Education and training;
- Working conditions;
- Work life balance;
- Consultative participation and collective representation.
The Evolution Of The Labour Market
Whilst the review acknowledges that the labour market has changed, and there is a clear need to respond to the changes and adapt accordingly, it still found that traditional full time work remains the norm within the UK, although more flexible arrangements are becoming favoured by some. It recognised that:
- More females are now working;
- There are more over 50s working, reflecting our ageing population;
- There has been a decline in 16-17 year old working, as they are staying in education for longer;
- One third of people in employment have a degree or equivalent.
It describes the UK labour market as one of the most flexible in the world, and accepted that the UK is good at creating jobs, but did identified some areas of concern that need attention.
Some of the challenges the market faces going forward:
- Poor wage growth;
- Poor productivity linked to pay;
- Jobs to match the requisite skill profile;
- New business models;
Clarity In The Law
The review explains that protection within the law will only work when employers and individuals fully understand the type of relationship that exists between them. However, with the changing economy and new business models, some individuals may fall outside of the current framework. The question that must be asked is does the current legislation meet the needs of a modern labour market?
Although many interviewed for the review felt that the current framework works well and provides enough flexibility to deal with the new ways of working, it was also found that how the law is interpreted varies widely. The legislation must go further to improve clarity and make sure opportunist employers do not take advantage of working people.
Establishing employment status needs to become clear and distinct, giving both employers and individuals more information, and a greater level of clarity. They must not open to a broad interpretation, but must also not be too ambiguous so that only a court can fully understand the basic principles.
By creating the separate status of dependant contractor, it will concern those who are in more casual employment relationships. This status should place less emphasis on the requirement to perform work personally, rather the key issue should be control.
“Flexibility should not benefit the employer, at the unreasonable cost of the worker and the flexibility must be a genuinely beneficial agreement.”
Flexibility in the labour market is crucial and must remain in order to keep participation rates high. Employers must not use flexible working models solely as a tool to reduce costs. More consideration should be given to the best way to incentivise employers who take a one-sided view of flexibility.
Controversially, the review does not propose a ban on zero hours contracts, as it believes it would do more harm than good. 68% of those on zero hours contracts do not want more work.
Regarding agency workers, they should be afforded some clarity on who is responsible for paying them and how much they should be paid. The legislation should be developed to allow agency workers and those on zero hours contracts the ability to request the formalisation of the actual working relationship.
For work to be fair and decent, workers must have a voice. Leadership and management skills need to be developed. A lack of employee engagement was highlighted, with managers not seeking employees’ views, not allowing them to influence decision making.
The review endorses the need for clarity on what constitutes good workplace relations, and for companies to be more transparent about their workforce structure.
The must be clarity in order for justice to be achieved.
Whilst the Employment Tribunal process was designed to be less legalistic that a formal court, the fees payable for a hearing and to appeal demonstrated to many a system that does not favour the individual.
The Government must continue to review the fees applicable. The review places a heavy emphasis on individuals being able to determine their status, in order to stop claims that have no merit going to tribunal.
Another problem found was that when individuals are in fact awarded a claim, many employers do not pay the damages. The review believes the government should make the enforcement process for unpaid claims easier, without the claiming having to occur additional fees.
Incentives In The System
The review believes that those who are self-employed are in a better position tax-wise than those who are in a more traditional employer/employee relationship, and that this is unjustified.
Self-employed people should be taxed more comparatively to employees. There needs to be more transparency on the boundaries between the self-employed and employees.
A New Offer To The Self-Employed
Those who are self-employed, are not given the same protection given in law to employees, which lies in a significant amount of trade union legislation. The review believes that self-employed people substantially benefit from being able to discuss the issues they are facing together.
The review also highlighted that the self-employed are less likely to be saving for their pension, and along with those in the gig economy, they would appreciate more support to help them understand their pension entitlements. The review suggests the development of a tool to help them understand and save for their pensions.
Scope For Development
The review highlighted the importance that employers place on numeracy, literacy and digital skills of young people entering the workforce. Transferrable skills was also a key point that was frequently raised during consultation, such as communication, team-working and organisation.
The review considers that there should be a bigger emphasis placed on life-long learning, by working with both the education sector and employers.
Whilst interns can be a useful way for individuals to gain experience, the review recognises that many employer exploit and abuse interns. Whilst it does not believe that interns deserve their own employment status, if interns are working, then they should be given workers’ rights.
Opportunity To Progress
The report identified several areas in which strong modifications needs to be made:
- Pregnancy and maternity
- The legislation at present is complex and spread across several statutes. The review calls for a codification of the law. Employers need to work with Acas to provide more guidance and support for their pregnant employees and avoid discrimination.
- Work and Health
- Supporting those under-represented in the labour market
- This includes women, older and younger workers, and gig workers.
- Improvements need to be made to support health and well-being at work.
- Statutory Sick Pay
- It review believes that SSP is a basic employment right that should be afforded from day one. It should be payable by the employer and should be accrued on length of service, in a similar way to holiday pay.
Embedding Lasting Change
To monitor the changes that the report is suggesting, the government should use a set of measures to identify how successful the recommendations have been in improving work, reporting annually on the quality of work on offer in the UK.
The marker must reach a balance between supply and demand, however the responsibility does not lie solely with the government. Everyone has a part to play to ensure a better quality of work.
About the author
James is on the Business Development & Account Management team at Neathouse Partners and regularly posts articles surrounding issues in HR & Employment Law, including case law & legislation updates. If you have a particular issue you would like addressed, feel free to drop James an email, and he will be happy to offer his assistance.
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