In July 2017, the Taylor Review of Modern Working Practices, an independent commission set up by the UK government, issued its report, ‘Good Work’. Its recommendations included clarification of the legal definitions around employment, enhancement of the rights of those working on zero-hour and agency contracts, greater attention to national minimum wage in setting the rates paid to gig workers, and enhanced rights to worker consultation.1
The Adecco Group recently talked to the review’s chair, Matthew Taylor, Chief Executive of the Royal Society for the encouragement of Arts, Manufactures and Commerce, about social protection issues related to the report.
Many of the Taylor Review’s recommendations involve steps that could be implemented relatively quickly. Looking further ahead, what are some of the big systemic changes that countries need to make to address the challenges of universalising social protection across different types of labour relationship?
In the long term, we want to think about a different shape to our tax system and a different and more flexible model of benefits and social protection.
On the first, we need to move away from the system we currently have where we tax labour very differently depending on how it is bought. Were I to have a big garden and employ somebody who is self-employed as a gardener, I’d pay less tax on that person’s labour than I would if that person were employed by a gardening company. There’s no rationale for that. This is not an issue only in the UK. Other countries are looking at it too. We need to get away from the idea that different forms of labour carry different taxes.
We also need a social protection system that is more rational, more fair, and more suited to the modern world. We could, for example, think about the use of new, particularly, web-based ways of enabling people to gain entitlements as they bill for work. Longer term, the Royal Society is arguing for larger changes, such as a universal basic income. In the end, we need a big, overall approach, which brings multiple elements together in pursuit of a different kind of equilibrium. That’s not going to come from nothing. It requires organisations to make the case in advance.
The Taylor Review noted that, in terms of labour flexibility, the UK is somewhere between Europe and the US. What lessons might other countries learn from its experience?
When I go to Europe, I’m not going to impress anyone by saying that Britain is showing some minor willingness to become slightly closer to European expectations in terms of social protection.
On the other hand, I do think that the principles of two-way flexibility and of good work are relevant. Ironically, in a sense, when I go to other countries, I find myself arguing less for the need for social protection and more for the idea that it is possible to have flexibility and combine flexibility with a commitment to social inclusion and fairness.
I also think, though, that requiring employers, in one way or another, to pay for the transferred risk that is involved in people not having guaranteed hours is also a principle that will drive flexibility in the right direction rather than the wrong one.
One trend that’s drawing attention to questions of social protection is the increasing use of digital talent platforms. To what extent has their growth created new social protection challenges, and how far has it revealed challenges that already existed?
It’s probably one-third, two-thirds. Most of this is about issues that we already knew. However, I think platforms have changed the scale of these issues and the speed with which new businesses can emerge and grow.
Related to that, they threaten to generate a race to the bottom in sectors currently characterised by more conventional employment forms. The other day, I was contacted by a company that’s a platform for retail workers who would be self-employed people who go and work in shops. I had to tell them, “Look, as far as I’m concerned, people who work in shops are not self-employed. I think your whole business model is bogus and inappropriate.”
The danger in cases like this is, unless we get the regulatory framework right, maybe the whole retail sector will say, “We don’t need to employ people in shops 35 hours a week but an hour in the morning, an hour at lunchtime, and an hour in the evening. They can sit in coffee bars waiting for our call the rest of the time.”
In February 2018, the UK government responded to the review, accepted many of its recommendations and began consulting on how to implement them. What do you find encouraging about this response, and is there anything you find disappointing?
I wouldn’t say the response was strong or good, but I wouldn’t say it was disappointing. I would call it reasonable. The ultimate assessment depends a lot on what happens as a consequence of the consultations they’re undertaking.
The government recognised that flexibility is not always a good thing. That is new in a British context, where for the last 25 years the underlying logic of labour market reforms has been that it always is. Now the government has said, “No. Flexibility may have benefits for business or job quantity, but there are also issues of fairness, of inclusion, of cohesion, of fiscal sustainability.”
It was also important that the government said: “We should be accountable not just for the quantity of work in the economy, but the quality of work in the economy.” I think these are two very important moments and they shift the nature of the debate.
My judgement about the response, though, will ultimately depend on two areas. One is the idea of some kind of paid top-up for non-guaranteed hours, which the low-pay commissioner’s going to look at. Second is the extension of the right for employees to have independent representation and a right to information and consultation at work. In both those areas, I would have preferred the government to be slightly more committed to action.
I worked in Number 10 myself and I know how hard government is. Rather than going around condemning them or being suspicious of them, my position will be to try to work with people to encourage the government to be reasonably bold in those two areas.