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U.K.’s jobs review kinder to employers than workers

Business is getting off lightly in government-backed study
A U.K. review of the gig economy is kinder to businesses than it should be, writes Carol Ryan. REUTERS/Gonzalo Fuentes

By Carol Ryan

LONDON (Reuters Breakingviews) — A landmark review of Britain’s jobs market has come out kinder to employers than workers.

The government-backed study, proposing better rights for gig workers and changes to tax, hits some helpful notes. It stops short, though, of calling for business to bear more of the cost of a highly flexible workforce. That is a realistic reflection of the United Kingdom’s weaker bargaining power.

The review, headed up by Chief Executive of the Royal Society of Arts Matthew Taylor, was commissioned late last year by Theresa May. The British prime minister, then more secure in her own job, was concerned about working conditions at companies such as Sports Direct and Uber and the quality of work in Britain in general, despite record low levels of unemployment. More prosaically, a trend towards less heavily taxed forms of work is having an impact on government finances.

Many of the report’s recommendations are laudable, including greater clarity around employment categories and new protections for “dependent contractors.” These workers, such as restaurant takeaway couriers for Deliveroo, are most at risk of “one-sided flexibility.”

And calls to tax different types of work more equally support the Treasury’s aborted attempt earlier this year to close a gap in national insurance contributions that make it more attractive, on that score, to be self-employed.

But business has gotten off lightly.

Rather than banning the use of zero-hours contracts that don’t guarantee a minimum amount of work and are now held by 2.8 per cent of those in employment, the report defends the flexibility they offer. Although it recommends a higher minimum wage for hours not guaranteed in a contract, the review stops short of proposing that companies relying heavily on loose work arrangements pay a premium for that labour.

With one of the most flexible labour markets in the world and corporation tax ticking down to 18 per cent by 2020, Britain theoretically has scope to ask companies for more.

But the need to appear as business-friendly as possible on leaving the European Union makes it unlikely that the government will do so in any big way.

The Taylor review kicks off an important debate about the winners and losers from more flexible work arrangements.

For now, it looks like business won’t be picking up the tab.

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