Given the release of the draft bill ‘A framework for modern employment’ on Monday, and the Autumn Statement on Wednesday, this week has been a busy one in government. And Matthew Taylor, our keynote speaker at a breakfast briefing this week, is delighted to see recommendations from his Good Work Review of Modern Working Practices being brought into the dialogue on future government initiatives.
In his address, Matthew stressed that flexibility is important for the UK labour market but it should not be at the expense of exploiting vulnerable workers. The three key messages he wanted to deliver to government were to provide more certainty to employers and individuals about working rights’ status, giving workers a voice and creating a level playing field for business. He was pleased to see the government has recognised that the status test for tax should also be part of the debate. It was announced in this week’s budget that as part of its response to the Taylor Review, the government will publish a consultation considering options for reform to make the employment status tests for both employment rights and tax clearer.
Whilst it may not be so easy to completely align the status tests for employment rights and tax, the tests must be aligned to some extent to give business and individuals greater clarity and certainty about their rights and the tax they should be paying.
A key point made by Matthew Taylor was that during his review he heard from businesses who adopt good working practices but felt that this negatively affected their competitivity – with competitors who weren’t adopting best practice offering their services as lower rates. A key aim of the recommendations was to communicate that reform is needed to create a level playing field for business. Matthew indicated the Director of Labour Market Enforcement, Sir David Metcalfe, who is responsible for tackling worker exploitation, will have a part to play in enforcing this but employers themselves will need to share that responsibility by developing good working practices for their workers and encouraging those within their supply chains to do so too.
Discussions with Carolyn Brown, head of RSM’s client legal services and an employment partner brought up the issue of worker engagement, and Matthew confirmed that he wants to see more done to give workers a greater voice in the workplace. In his research he found that employee engagement was one of the key drivers of increased productivity, and his recommendation was that internal government of organisations should be opened up to allow the employee voice to be heard. Following the OBR’s downgrading of the UK’s growth forecast to levels not seen since the early 1980’s, it is a point well worth making.
Matthew indicated there would be more views on his recommendations in the government’s white paper on Modern Industrial Strategy for post Brexit 21st century Britain, due to be published on Monday. It will also be interesting to see how the Director of Labour Market Enforcement’s first strategy report, due to be published in Spring 2018, will contribute to the debate.