13 Jul 2017

The Matthew Taylor review into modern working practices was first announced by Theresa May in the early months of her premiership, signalling her intention to focus on those ‘Just About Managing’, as well as addressing growing concerns about inequalities in the UK labour market – such as the growth of the gig economy and the increasing use of zero-hour contracts.

The fact that May chose to use the launch of the Taylor Review to make her first major speech since the General Election, points to this issue still being close to her heart. However, May’s weakened position was clearly reflected in her speech, with a notable absence of the bold reforms to the jobs market that was promised when the review was commissioned. Whilst May welcomed the Review, stating that her “commitment to change in Britain is undimmed”, there were no firm commitments on what the Government would do with the recommendations.

Business, however, should not take May’s tepid response as a signal that they can rest easy, as the potential impact of the review’s recommendations is far broader than may have been expected. While much of the media coverage focused on the impact to the gig economy – particularly due to the rise of companies such as Uber and Deliveroo – the review’s recommendations would undoubtedly have far wider reaching implications for a range of sectors – particularly retail, social care and agricultural and farming. The proposals on increasing pay for overtime and banning the ‘Swedish derogation’ principle – which allows agency workers to be paid less for the same tasks – will lead to some serious thinking on how companies manage the more flexible elements of their workforce.

The Government has clearly sought to buy itself time with its vague promise to formally respond to the review by the end of the year. May will want to be sure that the recommendations she chooses to adopt are palatable to her backbenchers, particularly given the U-turn her Chancellor had to make on increasing NICs contributions for self-employed people after the Spring Budget – and that was before she lost her majority. In addition, it is fair to say that the response to the report was mixed, with business groups such as the CBI cautiously welcoming the recommendations and the trade unions fiercely criticising it for not going far enough on banning zero-hour contracts or “bogus self-employment”. Labour and the SNP have joined the unions in their criticism of the report, meaning that even if the Government chooses to adopt some recommendations, any legislative reforms will be at risk of Opposition amendment as they pass through the Commons and particularly the Lords.

It seems therefore that whatever May chooses to adopt from the report, she will not be able to please everyone. Our infographic below highlights the potential wider business implications of the review and what could come next.

If you would like to discuss the implications of the Taylor Review and the Government’s response to your business, please contact Laura Swire, Managing Director, Advocacy, lswire@hanovercomms.com.