Watch the launch of the Taylor Review of Modern Working Practices with Prime Minister Theresa May.
The starting point for our review has been the strength of our labour market and of the key features of our system of employment regulation, what we refer to as the British way. Record levels of employment, low levels of unemployment, high levels of voluntary flexibility, wages now growing fastest amongst the lowest paid; these facts provide a very positive backdrop – one that would be envied in many other advanced economies – for our consideration of how to improve the quality of work.
With this success in mind let me make clear that the Review team thinks flexibility is a good thing, in fact we need more. Let me underline that getting a job is still the best way out of poverty and path to opportunity. And let me reassure firms and organisations that good employers have absolutely nothing to fear from our proposals. Indeed we explicitly say that what is sometimes called the employment wedge – the costs of taking someone on as an employee - is already big and should not be bigger.
Our national performance on the quantity of work is strong. But quantity alone is not enough for a thriving economy and fair society. We believe now is the time to complement that commitment to creating jobs with the goal of creating better jobs. The Review calls on the Government to adopt the ambition that all work should be fair and decent with scope for fulfilment and development.
Why do we think good work matters?
Because despite the impact of the national living wage and tax credits there will always be people who are in work but finding it hard it make ends meet. Our social contract with those people should include dignity at work and the realistic scope to progress in the labour market.
Because bad work – insecure, exploitative, controlling – is bad for health and wellbeing, something that generates cost for vulnerable individuals but also for wider society.
Because, as many business leaders recognise, low quality work and weak management is implicated in our productivity challenge. Improving the quality of work should be an important part of our productivity strategy.
Because technology – like robotics and machine learning – is going to have a big impact on jobs and the tasks that make up those jobs. As we seize these technological opportunities – as we must – we should do so with the aim of making working lives better, taking away the drudgery and leaving the human contact and creativity that machines can’t provide.
And, finally, because if we want citizens who are engaged, responsible, active, who – to coin a phrase – ‘take back control’ we should encourage those same virtues in the workplace. Our idea of what it is to be a respected citizen should not stop at the office or factory door.
So in our Review we call for a more concerted and determined approach to improving the quality of work in our economy. Our proposals include:
- a new role for the Low Pay Commission exploring how to improve quality and progression in sectors with a high proportion of low paid workers,
- a national framework for employability skills so we can develop the kind of transferable capabilities that can be acquired in formal education and also informal and on the job learning
- recognising and supporting the role that employers can play in promoting health and wellbeing at work
- making it much easier for employees to access rights to independent representation, information and consultation.
But if the ambition for good work is sincere we need also to address those factors which make this more difficult. One of those factors is a lack of clarity. To increase clarity for business and workers we propose
- primary legislation to define the boundary between self-employment and worker status
- moving towards aligning the categories used in tax regulation and employment regulation,
- that the employment status boundary should be defined – as is the tax boundary - in terms of the level of control and supervision experienced by individuals
And we need to address exploitation and the risk of exploitation. Of all the issues that were raised with us as we went around the country the one that came through most strongly was what the report calls ’one-sided flexibility’.
Two way flexibility is great, it can enable more people to work in the way they want when they want across their lifecycle. Indeed this is why we have gone to some lengths to suggest a way to enable platform-based models to continue to offer that flexibility even if the individuals they engage are re-classified as workers.
One sided flexibility is when employers seek to transfer all risk on to the shoulders of workers in ways which make people more insecure and make their lives harder to manage. It is the people told to be ready for work or travelling to work only to be told none is available. It is the people who have spent years working for a company on a zero hours contract but who, without a guarantee of hours from week to week, can’t get a mortgage or a loan. It is the people who feel that if they ever raise legitimate concerns about their treatment they will simply be denied the hours they desperately need. It is these issues that have led us to ask the Low Pay Commission to explore the idea of a higher minimum wage level for those hours which people are asked to work but which are not guaranteed to them. It is also why we have called for a right for people to request fixed hours and permanent contracts along with a requirement that companies disclose how they have responded to such requests. There is nothing wrong with zero and low hours contracts but they should be a means to two way flexibility not a lazy way for those with market power to dump risk on those who lack it.
Finally, we also take seriously the challenge of enforcement. Too often people don’t enforce their rights because they don’t know they have them. So among our proposals we propose a new requirement that all employees and workers should be given essential information about their status, terms and conditions on day one of their employment; we ask HMRC to explore extending their enforcement role for the minimum wage into other core rights principally holiday pay; and we have proposals to make it easier for people to find out and enforce their employment status.
The Review is now complete. It falls to the Prime Minister, Government and Parliament to decide how to respond to our recommendations. In recent days I have spoken about our work to senior politicians in different parties, I have talked with trade unionists and business leaders, I have engaged entrepreneurs and campaigners. Everyone will have their own view and no one will agree with every word of our report, but my hope is that in responding to our proposals those people and the interest they represent can focus primarily on what we agree about. In these challenging times I sense the public would value a sign that we can put aside our differences and focus on a shared commitment to better working lives for our fellow citizens.
From time to time people have asked me what as Chair of the Review I would see as success. While I would be proud to see our recommendations enacted and our strategic proposals fully debated, more than anything I hope this Review will come to be seen as marking the point at which good work becomes an accepted and widely supported national goal.
If the Government and the public come to recognise the vital importance of good work to social justice, economic dynamism and civic engagement then the efforts of the Review team and all who have supported us will have been richly rewarded.