The Taylor Review

13th August 2017 (Last Updated December 13th, 2017 16:12)

The Government’s highly anticipated review of modern employment practices by Matthew Taylor was published last month, outlining a number of recommendations which the Prime Minister herself said the Government would take seriously. Hilary Ross, executive partner and head of retail, food and hospitality at DWF, focuses on the hospitality sector and why it is important to have access to a flexible, agile workforce.

The aim of the review was to understand how “good work” could be created for all – described as “fair and decent” and with “scope for development and fulfilment”. Unsurprisingly, then, it took a particularly detailed look at the recent trend of self-employed workers who earn their wage from the so-called gig economy. It also investigated the use of zero-hours, short-hours and agency contracts, as well as flexible working, holiday pay, employment relations and employment tribunal rules and procedures.

The future workforce

We know from our own research just how important it is for the food and hospitality sectors to have access to a flexible, agile workforce. Earlier this year, two-thirds (63%) of senior executives we spoke to in the sector told us that they were concerned about how much harder it will be to recruit the right talent after Brexit. Two-thirds (62%) also said they plan to embrace the gig economy in some way in the next three years, and a further two-thirds (66%) said they are planning to have a section of their workforce working on an agile basis in the coming years.

So what are the key changes put forward in the Taylor review, and what will they mean for your business?

Introducing ‘dependent contractors’

The most significant proposal in the 116 page report was the suggestion that people working for gig economy firms should be treated as ‘dependent contractors’. This new category – which could apply to the likes of Deliveroo drivers and those providing gig economy services to the sector such as cleaning and catering – would sit in between employed and self-employed status, granting these workers more employment rights as a result.

With over a million people working within the gig economy in the UK, it’s no surprise that the Taylor Review sought to ensure greater protection for those working this way. The proposal will have a particularly significant impact on restaurants and food chains who’ve grown used to customers ordering on platforms like Deliveroo. Increased costs to these providers could potentially be passed on to restaurants, rather than consumers, affecting this revenue stream for restaurants.

Formalising zero hours contracts

The economy in some way in the next three years, and a further two-thirds (66%) said they are planning to have a section of their workforce working on an agile basis in the coming years.

So what are the key changes put forward in the Taylor review, and what will they mean for your business?

Introducing ‘dependent contractors’

The most significant proposal in the 116 page report was the suggestion that people working for gig economy firms should be treated as ‘dependent contractors’. This new category – which could apply to the likes of Deliveroo drivers and those providing gig economy services to the sector such as cleaning and catering – would sit in between employed and self-employed status, granting these workers more employment rights as a result.

With over a million people working within the gig economy in the UK, it’s no surprise that the Taylor Review sought to ensure greater protection for those working this way. The proposal will have a particularly significant impact on restaurants and food chains who’ve grown used to customers ordering on platforms like Deliveroo. Increased costs to these providers could potentially be passed on to restaurants, rather than consumers, affecting this revenue stream for restaurants.

Formalising zero hours contracts

The review took an interesting stance on zero hour contracts, but didn’t call for a ban on their use – despite widespread support for Labour’s pledge to do just that. Instead, it called for the Government to develop legislation that allows those employed in this format to request to formalise the reality of their working relationship – in other words, enabling them to be more forward thinking in their scheduling.

With many workers in the industry enjoying the flexibility that comes with zero hour contracts, the challenge, particularly for restaurateurs and pubco’s, will now be to ensure that they can formalise the hours of employees who request to do so in an organised and adept way, which minimizes any disruption.

Stabilising agency workers

The review called for the Government to abolish a legal loophole known as the “Swedish derogation”, which allows agency workers to be paid less than permanent staff doing the same jobs. It also recommended forcing employers to report the number of agency staff on their books, and said that employers should provide agency workers more transparency and information when it comes to rates of pay.

Despite less than 2% of those working in the sector being employed via an agency at present – according to ONS figures – with so many in the industry looking to get their workforce employed on an agile basis in the next few years, these recommendations from the review will become increasingly significant, so employers would do well to make sure they’re aware of them.

Looking to the future

As Brexit tiptoes ever closer, the gig economy and flexible working will play an increasingly important role as restaurants, pubco’s and hoteliers seek to secure their talent pipelines. Whilst the proposals unveiled in the review may not come as a surprise to many in the sector, there is no question that they are important and provide some clarity and guidance on how employment laws could change in the coming months and years.

It now remains to be seen whether Theresa May, with her reliance on the DUP and Brexit-packed parliamentary calendar, will stick to her promise of taking the review seriously and making the changes it calls for anytime soon.