Taylor Review suggests new ‘dependent contractor’ status for gig workers

This week saw the publication of Matthew Taylor’s independent review into modern employment practices, which has been welcomed by most recruitment industry bodies.

Commissioned by Prime Minister, Theresa May, Good work: the Taylor review of modern working practices aims to offer protections for ‘gig economy’ workers with insecure jobs.

There were initial fears that the review would stifle the self-employed and the businesses (such as Uber) that are reliant upon using flexible ‘gig economy’ workers in order to survive.

However, one of the new suggestions put forward by the review is that of a ‘dependent contractor’ category, which would not equal full employee status but would offer workers’ rights such as sick pay, holiday pay, minimum wage, and a new right to request fixed hours with a free pre-employment tribunal process. It has also been suggested this will help to identify the genuinely self-employed from the more vulnerable ‘gig workers’.

Commenting on the review, Recruitment & Employment Confederation (REC) Chief Executive Kevin Green said: “Agency workers play a vital role in our economy and have been central to the success of our jobs market in recent years. This review recognises the importance of flexibility to UK businesses and to the individuals who choose to work this way.

“Workers’ rights aren’t well understood, and we agree that employers need to engage more effectively with all workers regardless of what type of contract they are on. We also agree that more should be done to support workers who want to progress, and we’re delighted to see the specific recommendation that the Apprenticeship Levy should be looked at again so that it works better for people in non-permanent roles. …”

On the recommendation that ‘gig workers’ at organisations such as Deliveroo and Uber should be assigned ‘dependent contractor’ status, Green replied: 

“Gig workers should be given entitlements to holiday pay, pension provision and access to training, bringing them in line with agency workers who are already covered by a comprehensive regulatory framework. A new ‘dependent contractor’ category seems like a sensible proposal, which would help to identify legitimately self-employed workers.”

The Association of Professional Staffing Companies (APSCo) has also responded to the review for which it gave evidence earlier this year. Samantha Hurley, Director of Operations at APSCo, said: “APSCo welcomes the concept of ‘good work for all’ and the Prime Minister’s support for enterprising small businesses.

“APSCo broadly supports the proposal to classify workers as ‘dependent contractors’, who are not employees, but are eligible for workers’ rights such as sick pay, holiday pay, minimum wage, and a new right to request fixed hours, with a free pre-employment tribunal process. In terms of protecting vulnerable workers, this is a sensible suggestion. … For those who aspire towards more stable employment, these recommendations will no doubt be welcome relief. However, as PwC recently reported, only a third of individuals working in this way do so in place of a secure full-time job. For the majority, it is a conscious decision.

“Our one disappointment is that this report focuses heavily on the lower-skilled, lower-paid end of the spectrum, rather than looking at modern employment practices more holistically – with no explicit recommendations around protecting our economy which is driven by high-skilled, well-paid contractors.”

Matthew Taylor’s call for greater transparency on umbrella pay along with plans to police umbrella firms to raise standards was welcomed by the Freelancer & Contractor Services Association (FCSA).

Julia Kermode, FCSA Chief Executive: “In particular I am pleased that the review has concluded that more should be done on transparency of pay, something that I and FCSA have campaigned for tirelessly in recent years. … We also welcome plans for better policing of the umbrella sector, we already rigorously test FCSA Accredited Members for compliance annually and we are continually disappointed by actions of less compliant firms operating dubious schemes that seem to tarnish the whole sector with the same brush. …”