1Introduction
1.Technological developments, new business models and changes in consumer behaviour are bringing about huge changes to the ways in which people work, and their relationships with their employers. Many businesses now meet their labour needs in different ways—such as through flexible contracts and digital platforms which rely on self-employed workers. This has created new opportunities in Scotland and across the UK, but there are concerns that it has also led to an increase in low paid and insecure employment and has shifted the relationship between many businesses and their labour force.
2.In recognition of the challenges arising from changes to business models and the ways in which people work, the Government commissioned Matthew Taylor, Chief Executive of the Royal Society of Arts, to consider how employment practices needed to adapt to keep pace with modern business models. Following publication of the Taylor review’s report, Good work: the Taylor review of modern working practices,1 the Business, Energy and Industrial Strategy and Work and Pensions Committees considered its findings and produced a joint Report, A framework for modern employment,2 which looked in detail at the issues considered, and recommendations put forward, by the review. The Government has since published its own response to the Taylor review,3 which committed to implementing several of Matthew Taylor’s recommendations, and launched consultations looking at how other recommendations could most effectively be taken forward.
3.This Report seeks to build on that work, and examines the particular needs of Scotland and how the devolution settlement affects the way in which the UK and Scottish Governments respond to these challenges; recognising that—while employment law is reserved to the UK Government—both the UK and Scottish Governments have powers which affect the availability and quality of employment opportunities in Scotland, as shown below.
UK Government responsibilities and powers
- Employment rights and provisions for minimum wages.
- Industrial relations.
- Employment support programmes for those out of work in the short-term.
- Trade and industrial policy.
Scottish Government responsibilities and powers
- Education and training, including the provision of apprenticeships.
- Employment support programmes for disabled people and those at risk of becoming long-term unemployed.
- Economic development.
- Business rates and income tax.4
Our inquiry
4.In the last Parliament our predecessor Committee launched an inquiry into sustainable employment in Scotland, which looked at: how employment differed in Scotland compared to the rest of the UK; how well UK employment law meets the needs of Scotland; whether sustainable employment in Scotland was threatened by unfair employment practices and how these could be tackled, and what ambitions the UK Government should have for employment in Scotland.5 That Committee was unable to complete its work before the snap 2017 General Election, so we decided to reopen the inquiry, focusing on what further action was necessary—following the recommendations of the Taylor review—to combat unfair employment practices in Scotland, ensure employment legislation reflects modern employment practices, and to look at how the UK and Scottish Governments can work together to improve employment opportunities and standards of employment in Scotland Our Report focuses on:
- Employment status and modern employment practices;
- Unfair employment practices;
- Productivity and the UK’s industrial strategy, and
- Devolution and employment support.
5.Across the two Parliaments there have been 10 oral evidence sessions with 48 witnesses—including academics, think tanks, unions, business and sectoral interests, and representatives from the UK and Scottish Governments, as well as Matthew Taylor—and dozens of written submissions have been received.6 We are grateful to all those who have contributed to this inquiry, and helped inform the findings of this Report.
1 Department for Business, Energy and Industrial Strategy, Good work: the Taylor review of modern working practices, 11 July 2017
2 Work and Pensions and Business, Energy and Industrial Strategy Committees, A framework for modern employment, Second Report of the Work and Pensions Committee and First Report of the Business, Energy and Industrial Strategy Committee of Session 2017–19, HC 352, November 2017
3 HM Government, Good Work: A response to the Taylor Review of Modern Working Practices, February 2018
4 Cabinet Office, Devolution settlement: Scotland, accessed January 2018, Scotland Act 1998 (as amended)
5 The full terms of reference for the inquiry launched in the 2015 Parliament are available on the Committee’s website here: Sustainable employment in Scotland inquiry launched
6 A full list of witnesses and written evidence is available on pages 32–36.
2 March 2018