The long-awaited Taylor Report, commissioned by the Government in September 2016 was published today. Among the issues covered by the 115-page report is gig economy employment.
Among other things, the report recommends that firms which control and supervise their workers should pay a range of benefits, including National Insurance, as well as recommending a new category of worker called a ‘dependent contractor’.
Mr Taylor said a key theme was a perception that the gig economy put too much power into the hand of employers: “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.
“One-sided flexibility is where employers seek to transfer all risk onto the shoulder of workers in ways that make people more insecure and makes their lives harder to manage. It’s the people told to be ready for work or travelling to work, only to be told none is available.”
This report follows hot on the heels of the independently produced report from the Social Market Foundation, whose main activity is to commission and publish original papers by independent academic and other experts on key topics in the economical and social fields, with a view to stimulating public discussion on the performance of markets and the social framework within which they operate.
Commenting on both the Taylor Report and the SMF report entitled ‘Rules of Engagement: Reviewing self-employment and employment in the UK’, Crawford Temple, CEO of employment intermediary trade body PRISM, said:
“We needed it to be radical but it’s too high level, which means it’s too timid when tensions in employment status are some of the most pressing social issues of our time.
The report has many high level recommendations but they are just not specific enough. It is therefore difficult to put any value or meaning around them.
Once again the issue of tax has been side-stepped and this will be a critical element in the mix of tax versus rights.
Clearly there is still a lot of detail that needs to be thrashed out. Both employers and workers should be given a clear direction of travel with a view to creating a five-year plan. This will allow everyone to prepare their businesses or working arrangements aligned to any proposed changes.
The PRISM-sponsored report by the Social Market Foundation has been the only report so far to address the thorny tax issue by proposing a ‘Hirers’ NI’ where workers are, in the reports words, ‘dependent contractors’.
The government needs to go further and fast by removing the Employers NI threshold for all workers and reducing the headline rate. This simple step would take away a large financial incentive for employers to ‘force’ zero-hours contracts or limited-hour contracts on workers.
For low paid workers below the auto-enrolment threshold, the employer contributions should be made, once again rebalancing the costs.
Taylor emphasises the complexity of the current system and the importance of effective enforcement. This is something that we have been saying for over two years and is further evidence, if needed, that a structural reform of how the tax system works is required.”
The recent changes to the off payroll in the public sector rules were more complex than they should have been as they were rushed and had to work within current constraints of the tax system. Given a little more time the answer could have been far simpler.”
One of the aims of PRISM is to introduce some form of regulatory framework for umbrella companies to operate in, so we note that in this report, Taylor calls for umbrella companies and other intermediaries in the supply chain to fall within the remit of EAS. Whilst we would broadly welcome this or a similar move, as it would put all intermediaries on a level playing field and remove any rogue elements from the industry, we would obviously need to see any proposals in full before making any final comment.