PAYROLL INSIGHT
Modern employment practices
Helen Hargreaves MSc FCIPPdip, CIPP associate director of policy and membership, discusses implications of the Taylor review
F or many in payroll, being asked to treat a worker as self-employed rather than an employee on the payroll is an uncomfortable reality. And even for the rest of us who aren’t placed in this difficult position, establishing the correct employment status of a worker is not always straight-forward. So the announcement that the prime =minister had commissioned Matthew Taylor, the chief executive of the Royal Society of Arts, to lead an independent review looking at how employment practices need to change in order to keep pace with modern business models, was welcome. Three expert panel members – Paul Broadbent, Greg Marsh and Diane Nicol – have also been appointed to support the six-month review, bringing together expertise in the labour market, start-up businesses and public policy areas. Launched in October 2016, the Taylor review on employment practices in the modern economy (http://bit.ly/2gINyFk) is tasked with ensuring that our system of employment rules is fit for the fast- changing world of work. Perhaps the most interesting element of the review’s scope for payroll professionals will be security, pay and rights. The UK’s framework of employment protections and entitlements exists to help correct the inherent power imbalance between employers and employees. Rights such as access to paid annual leave and protection from discrimination provide the statutory base line on to which most
employers add further benefits as part of the employment contract. Entitlements such as the national minimum wage, employer pension contributions and parental leave also contribute to wider public policy goals. The inquiry will consider the implications of new forms of work on employee rights and responsibilities – as well as on employer freedoms and obligations. The review will conduct a regional tour interviewing workers in different jobs and types of employment across the country. In particular, the tour will visit areas including Maidstone, Coventry and Glasgow, speaking to workers and employers in sectors such as the gig and rural economies and manufacturing, to fully understand the impact of modern working practices and how different labour markets work. In terms of the longer-term trends, the review will think about a future world of work where many more people may work flexibly, where potential trends in work, such as automation, could make millions of traditional jobs unnecessary and how the tax and welfare system can be properly resourced to reflect this. Commenting on his appointment Matthew Taylor said: “It is very encouraging that the prime minister, in one of her first acts, has asked me to chair an independent review to look into how we can best respond to the rapidly changing world of work so it delivers for ordinary people.
“New forms of employment have many advantages for workers and consumers but there are challenges and risks. We need to approach this issue with an open mind recognising that within our flexible system of employment the same type of contract can have a diverse range of impacts on the people who use them. “That the prime minister has chosen to prioritise the interests of the growing army of people working in new ways sends an important message.” Taylor identifies the six key themes of his review as: ● Security, pay and rights – To what extent: ❍ do emerging business practices put pressure on the trade-off between flexible labour and benefits such as higher pay or greater work availability, so that workers lose out on all dimensions? ❍ does the growth in non-standard forms of employment undermine the reach of policies like the national living wage, maternity and paternity rights, pensions automatic enrolment, sick pay, and holiday pay? ● Progression and training – How can we facilitate and encourage professional development within the modern economy to the benefit of both employers and employees? ● Finding the appropriate balance of rights and responsibilities for new business models – Do current definitions of employment status need to be updated to reflect new forms of working created by emerging business models, such as on- demand platforms? ● Representation – Could we learn lessons from alternative forms of representation around the world, for example the Freelancers Union in New
...tasked with ensuring that our system of employment rules is fit for the fast- changing world of work
| Professional in Payroll, Pensions and Reward | April 2017 | Issue 29 14
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