A framework for modern employment Contents

1The Taylor Review of Modern Working Practices

1.In October 2016 the Government commissioned Matthew Taylor to lead an independent review examining “how employment practices need to change to keep pace with modern business models”.2 Matthew Taylor explained his review would consider three broad areas:3

a)whether there is clarity in the rules and legislation pertaining to employment status, including whether legislative changes are necessary;

b)how exploitation in atypical forms of work, including in the “gig economy” might be prevented, ensuring workers receive fair treatment and due rights and protections; and

c)how incentives might be shifted to produce different, beneficial outcomes for workers, companies and the economy.

2.The announcement of the Taylor Review coincided with our predecessor Committees each carrying out inquiries on modern employment practices and their implications.4 Both inquiries were cut short by the 2017 general election, though the Work and Pensions Committee published a short report in May 2017.5 It was clear on reconvening that continuing that work should be a priority for both our Committees.

3.Employee jobs remain the most common form of work in Britain. Other forms of work are increasingly common, however. Five million people—15% of the workforce—are now self-employed.6 This self-employment takes many forms: from entrepreneurs and “one man band” business owners, to consultants and contractors across industries and pay scales. There are 900,000 people on zero-hours contracts, and 1.6 million temporary and agency workers.7 The gig economy employs an estimated 1.3 million people.8

4.The Taylor Review was published in July 2017.9 A Government response is expected in late 2017. In our joint inquiry, we sought to maintain the momentum created by the Taylor Review and to support Government in implementing its most transformative recommendations. In October 2017 the Committees jointly held evidence sessions with both Matthew Taylor,10 and Professor Sir David Metcalf, the Government’s Director of Labour Market Enforcement, to help us decide on next steps.11 We also heard from workers and businesses in the gig economy to examine the challenges both are facing.12 We were particularly keen to understand which changes could be achieved through policy shifts or secondary legislation, which would require primary legislation, and what support we might offer Government in legislating. To this end, we have produced a draft Bill, which contains some suggested legislative changes for the Government to consider.13

2 BEIS, Taylor Review on Modern Employment Practices launches, November 2016. Matthew Taylor is Chief Executive of the Royal Society of Arts.

3 Q354 [Matthew Taylor]

4 Work and Pensions Committee, Self-employment and the gig economy inquiry, May 2017; Business, Energy and Industrial Strategy Committee, The future world of work and workers rights, May 2017

6 ONS, Trends in self-employment in the UK, 2001–2015, July 2016

7 ONS, LFS data for quarter 4 (October to December) 2016

10 Business, Energy and Industrial Strategy and Work and Pensions Committee, Evidence session with Matthew Taylor, October 2017

11 Business, Energy and Industrial Strategy and Work and Pensions Committee, Evidence session with David Metcalf, October 2017

12 Business, Energy and Industrial Strategy Committee, Evidence session with companies and workers, October 2017; Work and Pensions Committee, Evidence session with companies and workers, February 2017. In total we heard from nine workers over three oral evidence panels, and received independent written submissions from a further 25 workers.

13 Michael Newman, Partner at Leigh Day, and Michael Ford QC, Professor of Law at the University of Bristol, acted as Specialist Advisers on our inquiry. We are very grateful for their support.

17 November 2017