11 July 2017

By Nicola Countouris, Professor of Law at University College London; and Professor Keith D. Ewing, President of the IER

‘A mountain had gone into labour and was groaning terribly. Such rumours excited great expectations all over the country. In the end, however, the mountain gave birth to a mouse’

(Phaedrus, ‘The Mountain in Labour’)

For some, there were great expectations that PM May’s ‘Independent Review of Employment Practices in the Modern Economy’ could offer something more than heart-warming gestures for the millions of workers employed through casual and intermittent contracts, a million or so of them toiling under the permanent insecurity of a zero-hour contract. Unfortunately, after nine long months of gestation, some drama, and a lot of fanfare, the review produced by Mr Matthew Taylor has come up with some seriously underwhelming, where not counterproductive, recommendations.

Let us take the suggestion that ‘dependent contractors’ – as the report would like to define most gig-economy workers – should be guaranteed the minimum wage and be covered by working time legislation. Helpful as this suggestion may be, it is, in our view, a minute late and quite a few dollars short. It is late because UK labour laws already require employers to grant these minimum labour rights to ‘workers’ that are neither employees nor genuinely self-employed, and have done since 1998.

Unsurprisingly, in October 2016, the London Employment Tribunal decided that ‘Uber drivers’ ought to be considered ‘workers’ and be granted exactly that: paid holidays and the minimum wage. Since that decision, most big players in the so called ‘gig economy’ have either accepted or been forced to grant these rights to their staff. ‘Workers’ are currently entitled to that and much more, including day-one protections against discrimination, the right to organise and bargain collectively, whistleblowers’ protections, and more. There is some mention of these rights in the Taylor report, but it is unclear whether ‘dependent contractors’ would be able to benefit from them.

It is also a few quid short, as guaranteeing paid holidays and the minimum wage (and, in some circumstances, the minimum wage with a ’20% margin of error’) to ‘gig-workers’, is only (a small) part of the many problems arising from the unacceptable levels of exploitation endured by Britain’s growing casual and ‘as required’ workforce. The Taylor Review was expected to address these problems by suggesting the introduction of a ‘right to request’ regular hours and work for all casual workers.

It did so, in respect of both zero-hour workers and temporary agency workers, although this right is subject to a 12-month qualifying period (which the report itself acknowledges would only assist 4.3% of all temporary workers). And it turns out that, well, these workers could already ask their employers to offer them regular hours (there is nothing in legislation currently prohibiting such requests). But employers, according to the report, should also have a right to refuse these pleas, subject to an obligation on their part ‘to consider the request in a reasonable manner’.

Much has been said, but little has been done, about improving working conditions of casual and precarious workers in the UK workforce, many of them employed through sham self-employment contracts. But any government or policymaker serious about this reform agenda had better consider some more robust and effective policy responses. We suggest that the following policy options may be a suitable starting point to enshrine in the statute book a meaningful right to regular work:

1. All work contracts to specify minimum working hours and rates of pay, with ‘overtime’ compensation rates applying beyond those minimum contracted hours (similar to the reforms adopted in New Zealand with the entry into force of the Employment Relations Amendment Act 2016)
2. A right to (and not just a ‘right to ask for’!) fixed and regular employment by reference to the normal/average working week, or by reference to busiest working week (as suggested a few years ago by the Zero Hours Contract Bill, seemingly ignored by the Taylor Review)
3. A statutory minimum working week with sector level collective agreements introducing a reasonable and fair amount of regulated flexibility (popular in a number of European and, to some extent, Scandinavian countries)
4. A combination of the above

Ideally these reforms should not be considered in a vacuum, but in the context of a comprehensive revision of workers’ rights with an extension of fundamental labour standards to all work relations, rebuttable presumptions of employment status, free access to justice, and sector level collective bargaining regaining a central regulatory role under the auspices of a new social contract between unions, employers, and the state (with the latter being involved in a supporting capacity through a new Ministry of Labour and an effective inspection service).

Instead, this report offers an opportunity for exploitative working practices to continue unaffected underneath a very thin veneer of largely cosmetic recommendations (in a 110+ page long report, one can always find some cosmetic recommendations). In fact, it may even encourage some employers to reshape their contractual arrangements along the lines of the newly enfranchised, but conceptually fuzzy, concept of ‘dependent contractor’, that could quickly be used to replace even standard and decent contracts of employment, thus becoming a new regulatory ‘black hole’ whose gravitational pull could steadily suck in the entire universe of employment protection legislation as we’ve known it so far.

So this may not just be, ultimately, a despairing tale about Mountains and Mice, but also a cautionary one about ‘Farmers and Vipers’.