Taylor report focusses on gig economy and cash in hand workers

A recently published report has been met with mixed reactions on how it will reform our current working practices.  The Matthew Taylor report, Employment Practices in the Modern Economy, reviews areas such as the ‘gig economy’ and makes recommendations on proposals such as stronger incentives for firms to treat workers fairly and a more pro-active approach to workplace health.  Natalie Rawson, Employment Lawyer, here reviews the key areas of the report and explains what it means for employers and employees in the future. 

‘Dependent Contractors’

In his report, Matthew Taylor states that while there has been an increase in the number of jobs under the Conservatives, there has been a fall in the quality of those jobs.  “In essence this comes down to the so called ‘gig economy’,” explains Natalie.  “A number of different Tribunal cases including Uber have highlighted the difficulty in establishing employment rights when defining whether a person is an employee, worker or self-employed.  In the Uber case, the Tribunal found that those working for the company were in fact workers and not self-employed, meaning they are entitled to certain employment rights.” 

In light of these cases, Mr Taylor recommends in his report to change ‘worker’ status to ‘dependent contractor’.  These dependent contractors would not be employees but would be eligible for workers’ rights, and have the option of earning the national minimum wage.  “The important phrase here is that they would have the option of earning the national minimum wage, not automatically be entitled to it,” continues Natalie.  “Their wages would be calculated on certain data, so in the instance of Uber, their workers wages would be calculated by what the average journey would cost versus the capacity per hour.  This has drawn some criticism from opponents who say the report does not go far enough to minimise exploitation in certain industries, as well as adding another level of employment rights, potentially leading to even more confusion in this already tricky area.”

Under the proposals, dependent contractors would be entitled to sick leave and paid holidays, and self employed workers could benefit from maternity and paternity leave if they pay more in national insurance contributions.

Hidden economy reforms

Another prominent area featured in the report was that of cash-in-hand jobs, which tend to be untaxed and therefore labelled as the ‘hidden economy’.  “HMRC figures from last year show that this form of tax avoidance cost the government £4.4billion,” explains Natalie.  “Mr Taylor’s report suggests that to reduce tax avoidance from cash in hand work, people should be paid through credit cards, contactless payments or Paypal.  This area has caused controversy in the past so it will be interesting to see how this develops.”

Enforcement by employers

Zero hours contracts were also reviewed in the report, suggesting that while they should not be banned as a large number of employees prefer the flexibility of a zero hour contract, they will be given the right to request fixed hours instead if they wish. 

“Trade Unions criticise that this does not tackle the problem of job insecurity,” concludes Natalie.  “General Secretary Tim Roache has commented that enforcement of the rights workers already have is a challenge, and this is where government policy should be focussing; putting the welfare and rights of workers ahead of profits.  It will be interesting to see how Mr Taylor’s recommendations develop over the coming months, and the changes this could mean for employer’s to their employment contracts, workforce structure and staff handbooks.” 

If you are looking for employment law advice for your business, you can contact Natalie or another member of the Employment team on 02380 717717 or email natalierawson@warnergoodman.co.uk. 

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.