Job Tsar Matthew Taylor has published the findings of his long-awaited independent review into modern employment practices today. The report has called for a new category of worker to be created called ‘Dependent contractors’.

The review was commissioned by Prime Minister Theresa May last year following outcry over the increasing use of zero-hour contracts, temporary work, self-employment as well as the rights of workers in the UK. Taylor was appointed by May to provide recommendations protecting the rights of gig economy workers.

In relation to the staffing industry, Taylor calls on the new Director of Labour Market Enforcement to consider whether the remit of the Employment Agency Standards Inspectorate should be extended to cover policing umbrella companies and other intermediaries in the supply chain. He does not recommend comprehensive licensing for all operators in the staffing supply chain but refers to the power that the Gangmasters and Labour Abuse Authority has, to withdraw a licence if suppliers operating in the sectors within their remit are not complying with the Agency Workers Regulations (AWR).

The Review states that it does not want to stop companies using agency staff but proposes to address situations in which companies use agency workers over a longer period of time as a substitute for effective workforce management. The report states “As such, we believe as well as a right to equal pay, agency workers should have the right to request a direct employment contract with the hirer when they have been engaged with the same hirer for 12 months. According to a survey in 2014/15 by the Recruitment and Employment Confederation (REC), 4.3% of temporary assignments were of length greater than 12 months”.

The report goes on to suggest that “Companies and public bodies should be required to report on the use of zero and short hour contracts and agency work in annual reports, including in their supply chains” and that “the new Director of Labour Market Enforcement should consider whether the remit of The Employment Agency Standards Inspectorate (EAS) should be extended to cover policing umbrella companies and other intermediaries in the supply chain”.

The report also takes a swipe at Swedish Derogation and recommends that the Government should “repeal the legislation that allows agency workers to opt out of equal pay entitlements. In addition, the Government should consider extending the remit of the EAS Inspectorate to include compliance with the AWR”.

Fiona Coombe, Director of Legal and Regulatory Research at SIA commented “the problem is not the Swedish Derogation opt out itself but the way it is implemented and interpreted.”

Recommendations in the report include “Seven steps towards fair and decent work with realistic scope for development and fulfilment”. The first step states that the “national strategy should be explicitly directed toward the goal of good work for all.” 

The second step called on the creation of the new worker category ‘Dependent contractor”. These contractors will be eligible for worker rights such as sick leave and paid holiday. The report says, “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. These should be protected while ensuring fairness for those who work through these platforms and those who compete with them.”

The third step calls  for additional protection for the dependent contractors making tem eligible for worker rights such as sick leave and paid holiday. The new category will likely to cover riders for firms such as Deliveroo and Uber. However, the report did not call for an end to zero-hours contracts. Taylor stated that gig economy employees value their flexibility.

In its fourth step, the Taylor Review stated that the “best way to achieve better work is not national regulation but responsible corporate governance, good management and strong employment relations within the organisation.”

Taylor’s fifth and sixth steps focused on working life and health and well-being. In its seventh step, the report stated that the National Living Wage “needs to be accompanied by sectoral strategies engaging employers, employees and stakeholders to ensure that people – particularly in low paid sectors – are not stuck at the living wage minimum or facing insecurity but can progress in their current and future work.”

However, the Taylor review does not suggest a guaranteed minimum wage for all workers and recommends an opt-in system that removes workers’ right to redress not being paid the minimum wage.

Furthermore, the Taylor Review also called for an end to the cash in hand economy as doing so would raise £6 billion in tax and worker benefits.

Tim Roache, the general secretary of GMB, stated that the report was “a disappointing missed opportunity”.

“Everyone can pay lip service to wanting good quality, well-paid work but employers could offer that right here and now, they simply choose not to,” Roache said. “They won’t decide to do so just because they’re asked nicely. This isn’t a quirk of the system, this is the system – and without regulation this system will inevitably continue.”

The GMB backed a group of drivers who won a landmark case against Uber over employment rights.

The Trades Union Congress also commented on the report, stating that ‘it’s not the game-changer needed to end insecurity and exploitation at work.’

"The best way to achieve better work is not national regulation but responsible corporate governance, good management and strong employment relations within the organisation," Frances O'Grady is General Secretary of the TUC, said.

Unite, a UK-based trade union also commented on the report, "The onus must be on employers, not employees, to prove that the employment status is legitimately self-employed, for example, and we call again for this country to do as New Zealand does and ban abusive zero hours contracts. Without fully resourced enforcement then all we have from Taylor and the government is a dog that is all bark and no bite."

The review also came under fire due to the fact that one of the four panel members involved in the review – Greg Marsh – was an investor in Deliveroo, one of the gig economy companies likely to be most affected by proposed changes to legislation though the Government claims he sold his holding in the company before taking his place on the panel.

Matthew Taylor is set to be a keynote speaker at Staffing Industry Analysts' Executive Forum Europe in October. To register please click here.