Taylor Review recommends new employment status of ‘dependent contractor’

The Taylor Review, a recently published major investigation into working practices in the United Kingdom, has called for the government to consider a new employment status of “dependent contractor.” The status would apply, for example, to the growing number of people working in the gig economy.

The Review, chaired by Matthew Taylor, chief executive of the Royal Society of Arts and a former adviser to Tony Blair, says that the new employment status is needed to cover “people who are eligible for ‘worker’ rights but who are not employees,” and to distinguish them from “those who are legitimately self-employed.”

dependent contractor bike courier pixabay-1214227Estimates suggest that around 1.3 million people are working in the gig economy in the U.K.
Image: pixabay-1214227

A 116-page report titled Good Work: The Taylor Review of Modern Working Practices, is the culmination of 9 months of fact-finding and opinion-seeking from all sectors of the U.K. labour market.

‘Fact-finding’ refers to the gathering of information and analyzing or ascertaining the data.

Prime Minister Theresa May commissioned Taylor last autumn to explore the landscape of work in today’s modern economy and to address areas of growing concern, such as the gig economy, zero hours contracts, job security, workers’ rights, pay, and employment status.

Changes in the labour market

The Review suggests that the U.K. labour market is evolving into what it calls the “British Way,” characterized by increased flexibility, and new ways of working, such as in the gig economy.

However, it also reminds us that “full-time, permanent work remains the norm.” At 63 percent of total employment, this traditional model continues to dominate the U.K. labour market.

Nevertheless, the report says that because of the changes in the nature of employment, there is a need to:

– tackle exploitation and the potential for exploitation at work
– make the law clearer and help people know and exercise their rights within it
– ensure that what is driving the changes lines up with the nation’s industrial strategy

Gig economy

The gig economy, as typified by people using apps or “digital platforms” like Uber and Deliveroo to sell their labour, is a strong theme throughout the Review.

A recent report from the Chartered Institute of Personnel and Development suggests that around 1.3 million people in the U.K. work in the gig economy, and that it accounts for about 4 percent of total employment.

However, the Review notes that because of the way government surveys are done, it is not clear precisely how many people are working in the gig economy and whether they are doing so on top of other work or are fully occupied in it.

The Review recognizes that while platform-based working “offers welcome opportunities for genuine two way flexibility and can provide opportunities for those who may not be able to work in more conventional ways,” there is also a need to ensure “fairness for those who work through these platforms and those who compete with them.”

It says that dependent contractors “are the group most likely to suffer from unfair onesided flexibility and therefore we need to provide additional protections for this group and stronger incentives for firms to treat them fairly.”

‘If it looks and feels like employment …’

Last year, in a landmark ruling, a tribunal declared that Uber drivers are not self-employed and should have “worker’s” rights such as receiving the national minimum wage and have the right to sick pay.

However, the San Francisco-based firm, who argue that its 40,000 drivers in the U.K. are self-employed because they are free to work where and when they want, have been granted the right to appeal against this ruling.

“Ultimately, if it looks and feels like employment, it should have the status and protection of employment,” says the Taylor Review.

A recently-released survey by PWC found that more people would take up work in the gig economy if employment rights were to increase significantly.