Government response to Taylor Review could have dire consequences for the self-employed - IPSE

Posted On: 
19th February 2018

The government should be extremely careful about pushing people away from self-employment against their will, says IPSE's Policy Development Manager Jordan Marshall

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Seven months after Matthew Taylor published his review into modern work commissioned by the Prime Minister, the government has at last published its response and outlined how it plans to act. It would be churlish to criticise the government for this delay though. Their response has been comprehensive and they are proposing significant reforms to employment law that could have far-reaching affects on the UK’s labour market and our 4.8 million self-employed individuals.

Like us at IPSE, the government is very worried that ‘ambiguity (around employment status) can be used by unscrupulous employers to justify miscategorising their employees as self-employed for their own financial gain’.  

When we gave evidence in front of Taylor and his review panel in 2017, we made the case for a legal definition of self-employment to prevent exploitation. This would give far more certainty for individuals classified as self-employed, and also for those organisations looking to engage individuals on a self-employed basis. We are aware that in some low-paid sectors like cleaning there has been a huge overnight shift from employment to self-employment – this cannot be right.

Disappointingly, the government has decided that defining self-employment in law would be too radical but instead they will look to legislate on the existing employment status tests around ‘employee’ and ‘worker’. This will be fraught with difficulty and will cause fractious debates as the consultation runs until June. Essentially, it seems Taylor and the government believe there should be fewer self-employed people and more ‘workers’, thereby enabling more people to be protected by benefits like holiday and sick pay.

The way they want to put this into law is by downplaying two of the traditional markers of self-employment – being able to reject work and having the ability to send a substitute. Instead they believe the nebulous concept of ‘control’ should be the only real factor under consideration. This is a dangerous path to go down, with the intention of shepherding people away from self-employment into the ‘worker’ category.

The unintended consequences of this approach could be dire. The government should be extremely careful about pushing people away from self-employment against their will. A study by the Department for Business, Energy & Industrial Strategy on the gig economy, published last week, showed the majority of those involved in the gig economy are satisfied with this way of working, with independence and flexibility the characteristics they are most satisfied with. Ending the flexibility of app-based working would hinder more individuals than it helps.

Aside from the big debates around employment law, “quality as well as quantity” was the dominant refrain running through Taylor’s review and the government’s response. This argument goes that while we have very low levels of unemployment in the UK, we have not paid enough attention to the quality of work and whether it is truly satisfying and enriching. IPSE and most commentators agree this is undoubtedly true, and the challenge is now around how we go about defining and measuring ‘good work’. What makes good employment will not necessarily be the same as good self-employment, with the latter much more about autonomy and flexibility rather than stability.

Taylor’s review was clearly an ambitious and very important piece of work which has shifted the political debate. The government has responded in a thorough way, and now needs to get on and solve the very real problems that exist around employment status. They must however be very careful not to do anything that pushes people out of self-employment against their will, hitting our flexible labour market which underpins the UK economy . IPSE will work very closely with government throughout this consultation process, ensuring self-employment is recognised as a positive way of working while the minority being exploited are protected.