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Crunch’s take on the government’s response to the Taylor review

Posted by Jake Smith on Feb 7th, 2018 | News and opinion

Crunch's take on the government's response to the Taylor review, image of a Deliveroo cyclist

The government has promised greater rights and conditions for gig-economy workers by enforcing their holiday and sick pay entitlements, their right to demand a payslip, and their ability to demand more stable contracts.

These pledges are in response to an official review of Britain’s labour market, led by Matthew Taylor, head of the Royal Society for the Encouragement of Arts, Manufactures and Commerce (RSA).

Steps will also reportedly be taken to ensure flexible workers are aware of their rights, and the Low Pay Commission will be asked to consider a higher minimum wage for workers on zero-hour contracts. Bigger fines have also been threatened for companies that are repeat offenders at using people in bogus self-employment.

Current laws that allow agencies to employ workers on cheaper rates could also potentially be repealed.

Crunch’s opinion on the response to the Taylor review

Darren Fell, CEO of Crunch, said: “We welcome the government’s commitment to adopt the recommendations from the Taylor review We would however, urge caution that any response does not introduce more red tape, or reduce the ability for entrepreneurs to employ people flexibly.

Many people choose to work part-time and value working for themselves, so we do not want to see it made it harder for those who choose to take advantage of these flexible platforms.

At Crunch we have always been passionate about helping the self-employed and small businesses, which led to us setting up Crunch Chorus to support and give a voice to this important community.

We worked closely with the RSA in 2016 on our Entrepreneurial Audit report, where we called for positive proposals to improve policy for the self employed.

Our recent Safety in Numbers Report highlighted the longer hours and shorter holidays faced by many self employed people. It’s not all doom and gloom though, as most of our respondents felt they were sacrifices worth making. In fact most self employed workers have chosen this route, for the chance to chase their dreams.

We’ll be taking a keen interest in the proposals once there is more detail. In particular the difficult balance between welcome improvements to the rights of workers in the gig economy, and ensuring any changes do not put more burden on entrepreneurs already facing uncertainty around private sector IR35 and other potential tax changes.”

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Responses to the announcement

Shadow business secretary, Rebecca Long Bailey, commented that this announcement was “just more words with no real action to improve the lives of the millions of people in insecure work”, adding that the government had “failed to adequately meet even the most basic of recommendations.”

Len McCluskey, General Secretary of Unite the Union, thinks more influence should be taken from the response elsewhere to zero-hours contracts:

However, the author of the review Matthew Taylor, who has previously referred to the concept of banning zero hours contracts as “using a “sledgehammer to crack a nut” seems satisfied that the government have taken onboard his recommendations:

Prime Minister Theresa May said:

“We recognise the world of work is changing and we have to make sure we have the right structures in place to reflect those changes, enhancing the UK’s position as one of the best places in the world to do business.”

The Taylor review

The review centered on the rise in so-called “gig economy” work at companies such as Uber and Deliveroo.

The review was set up to examine the increasing take-up of “gig” working, and to ensure this form of employment – which is often undertaken on a self-employed basis – is fair to all parties.

Taylor has said he was concerned some firms may be employing workers in this way solely to avoid paying tax. A report from the TUC has found that the exchequer could be losing out as much as £4 billion a year because those in less secure work, and in particular their employers, are contributing too little when compared to what would have been paid in tax if the workers were employees.

The review also examines ways in which individuals can establish their “true” employment status, which may enable to them to claim rights such as paid holidays or the ability to claim unfair dismissal. This could involve setting up an online service that looks at specific aspects of someone’s working practices – for example, their typical working hours, their freedom to work for other businesses, and their length of service – to determine whether they were in fact workers or employees of that particular company.

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