17 February 2017

In interviews before his tour of the UK to investigate the experiences of workers and employers in the modern economy, government job tsar Matthew Taylor has warned that businesses are deliberately exploiting vulnerable workers to evade tax.

Speaking to the BBC earlier this week, the former adviser to Tony Blair, who was hired to head-up a new review of employment rights by Theresa May, said: "There is no question … that when self-employment rose, that reduces the tax take to the Exchequer … it is clear to a certain extent what is actually going on is people are creating forms of work for themselves, or businesses are creating forms of work to try to avoid tax."

In an interview with the Guardian, he added that workers "feel miserable and angry" because they lack a voice in the workplace and that it should be a "national goal" to ensure that people "feel like citizens at work and not servants or slaves".

"I think what should drive businesses is efficiency, productivity, innovation - not trying to evade tax," he told the BBC.

"So, if we can make the system one where those incentives are less strong, then that would be an improvement."

"I am hoping that the review will mark a turning point, a point at which as a country we say it is not just the quantity of jobs that matters it is also the quality," he continued.

The Institute of Employment Rights is in full agreement that workers need a stronger voice in the workplace, but strangely Taylor's ideas for reform did not include the one institution that has provided a mouthpiece for workers for centuries: the trade union movement.

His preliminary proposals include allowing workers to check directly with the government whether they are being misclassified as self-employed, putting the onus on recruiters to prove that a contractor is actually self-employed, giving temporary workers the legal right to written terms and conditions within their first week of work to ensure they do not miss out on their rights, allowing variable-hours agency workers to request a permanent job after a certain time period, and forcing companies to publically report how many temporary workers they use.

While these are steps in the right direction, they fall short of providing workers with a true voice in the workplace. Perhaps the largest barrier to true workplace democracy is the imbalance of power between workers and employers. At the start of employment, employers normally offer a worker a predefined wage and conditions, and workers have only the choice to accept or decline, rather than negotiate (and in the age of Universal Credit and punitive benefit sanctions, the choice to decline is rapidly being removed). Once in work, only those who are legally defined as "employees" and have two years of continuous employment under their belt can claim unfair dismissal – and even should a worker take their employer to tribunal for unfair treatment, it will cost them up to £1,200 to do so!

The IER argues that with the power between employers and workers unbalanced, and barriers to access to justice preventing workers from exercising their rights, the only way to provide a 'voice' to workers is to engage in a comprehensive reform of employment law that allows workers to collectively organise and then bargain for better wages and conditions for all people in employment across the economy.

Our Manifesto for Labour Law draws upon a wide evidence-base and international comparisons to provide a framework for this reform. Key proposals include providing workers with a voice in government through the re-establishment of a Ministry of Labour, the promotion of collective bargaining at sectoral and enterprise level so that workers can negotiate for better wages and conditions, a place for workers on company boards, the establishment of a universal definition of 'worker' for all in employment so that all workers are eligible for the full suite of individual statutory rights, and the establishment of a labour inspectorate to ensure the enforcement of employment law.

Click here to read more about our Manifesto for Labour Law