Yesterday the Government made public its response to both the Taylor review of modern working practices and Sir David Metcalf’s Labour Market Strategy. The response to the Taylor Review has been long awaited since the Review was first published close to 18 months after the report was initially published in July 2017.
The Review is an important step for ensuring the employment framework fits the needs of the modern economy. For the tech sector, increased flexibility, platform-based work and technological advances have been part of the reason the tech sector grew 2.6 times faster than the wider UK economy last year. Reforms to modernise the employment framework are essential if the tech sector is to continue expanding and creating meaningful jobs.
Much of the Review and Response is centred around the sharing economy and the issue of ‘one-sided flexibility’, we are glad the Government and Taylor sought to find consensus on the issues that have arisen in this new area of work. The responses both addresses concerns about the balance between the rights of workers and those of business but recognises the value of the sharing economy and the benefits of new flexible working. Whilst the Review is centred on issues arising from the new sharing economy, it is clear that there will be knock-on effects across the UK workforce, namely for small business. techUK supports the recommendations and calls for clearer guidance for employers to implement these new requirements.
From a bird’s-eye view, it is encouraging to note that the Government enacted 51 of Taylor’s 53 recommendations and are acting responsibly to create a modern workplace that meet the needs of the 21st century economy. Some of the new protections for the individual worker in the response include: a new day one statement of rights, e.g. rights to sick and holiday pay, to ensure terms of employment are completely clear to the individual; the right to request a more stable and predictable contract after 12 months; and the closure of a legal loophole that allows employers to pay agency workers less than employed staff – ‘the Swedish Derogation’.
Looking more closely at the Review and Response, there is a clear need to focus on making these recommendations workable for businesses. For example, the threat of quadrupling fines at employer tribunals may be effective for the worst and repeat offenders but for SMEs they will require more detailed guidance and support from government to ensure they are not bundled in with those consciously breaking employment terms. More must be done to ensure these recommendations are transformed into manageable processes that our members can easily enforce. This is particularly important for new and innovative businesses who may be seeking to create new models of employment. It is critical that protections do not stifle the growth of new business models and that regulators work in partnership with rapidly growing businesses instead of simply taking a binary approach to enforcement.
As previously stated, the tech sector expanded over twice as fast as the rest of the UK economy last year and with that is providing innovative new employment models and procedures. Guidance and new requirements must provide greater clarity to ensure employers are able to roll out procedures quickly and not damage job creation. Today’s announcement is a welcome opportunity to update employment frameworks which have not managed to adapt on their own, but government and enforcement agencies must ensure employers are aware of their new responsibilities.